Five changes could boost OTC growth

Five changes could boost OTC growth
Martin Wood says the OTC industry in the UK needs to "think outside the box"

3 December 2018 - Deborah Wilkes

Five changes could make OTC products more attractive to consumers, both in terms of communicating their benefits and ease of purchase, according to Martin Wood, founder of Martin Wood Insight, who says the OTC industry in the UK "needs to think outside the box".

Wood, who spent 23 years with market researcher IRI, says OTC companies "need to be ahead of the curve on plastics and free-from". He tells OTCToolbox that the industry "sometimes seems insulated from rapidly-changing consumer attitudes to the environment and provenance of substances ingested".

"Where is the recyclable/plastic-free OTC packaging?" he asks. "What steps are being taken to address the demands of vegetarians and vegans regarding non-active medicine ingredients?"

The community centre revolution

The second suggestion from Wood is that OTC companies should be at the "forefront of the community centre revolution". The shopping mall model is disintegrating, he says, and we are increasingly seeing community hubs focus once again on healthcare and education rather than shopping.

Changes to primary healthcare, observes Wood, include the consolidation of general practitioner surgeries in larger neighbourhoods. These surgeries often have a dedicated pharmacy nearby, he says, as well as other specialist healthcare providers – such as chiropodists, dentists and alternative therapists – and sports and fitness centres.

Wood says this shift offers retail opportunities for vitamins, minerals and supplements (VMS), sports-nutrition products, specialist medical devices, dental care lines and other OTC products.

He also says there may be enhanced demand in some areas for socio-demographic or ethnic treatments such as Traditional Chinese Medicine (TCM) products.

"Medicine manufacturers and retailers can be at the forefront of helping to set the agenda and make self-medication an integral part of the local community experience," maintains Wood.

New approach to convenience

The third suggested change is all about a "new approach to convenience".

"Today’s consumer, particularly those of the millennial generation and younger, buys in, and lives for, the moment," comments Wood. "With security of employment, housing and pensions a pipe dream for most – and food and experiences bought as consumed – the opportunity for healthcare products is to package and price health solutions for immediate relief or treatment." 

Wood notes that the OTC industry has always focused on convenience, as treatments are often bought in response to immediate need rather than in advance or in anticipation. "Yet the distribution of OTC medicines has hardly changed," he says.

According to Wood, the OTC industry could adapt ideas from the food-to-go market as well as the initiatives of supermarkets, big beauty retailers like Boots, and the burgeoning high street independents.

Wood points out, for example, that there has been a "step change" in the way shops are arranged to deal with different missions. "Even small supermarkets recognise that people just buying lunch need their own fixture, product range, communication and payment channel," he says. "But pharmacies have largely not evolved or even changed."

He acknowledges there is "less scope for radical change" in those pharmacies still dependent on National Health Service (NHS) prescriptions. However, he says "people coming in to self-medicate for now – the convenience consumers – need separate treatment".

Consumer-focused regulators

Wood's fourth suggested change involves greater consumer focus at the UK's Medicines and Healthcare products Regulatory Agency (MHRA).

Wood acknowledges that many constraints experienced by the OTC industry are "necessarily down to legislative restrictions". However, he feels that it "sometimes suits the OTC industry to hide behind regulations as a reason for not innovating".

"It is no surprise the companies with the best track record of product and communication development based on consumer needs are those more distant from the prescription pharmaceutical world," says Wood, citing RB and the major supermarkets as examples.

"But it is also true that a consumer-based regulatory body would help shift the emphasis away from the white coat brigade," he adds.

Ditch the term OTC

The fifth change suggested by Wood is to "ditch the term OTC".

Companies and industry associations around the world use a wide range of terms to describe medicines and medical devices that are available without a prescription, including consumer healthcare, non-prescription, OTC, self-care and self-medication. Wood's preferred term is consumer healthcare products or "CHP if we have to have an acronym".

"What could be more old-fashioned than over-the-counter?" he asks. "When I was a child many decades ago the idea of buying stuff by asking for it at a counter was already quaint."

"What we call things matters," he says, "and OTC doesn’t work. We need to keep the technical definitions of pharmacy (P) and general-sale list (GSL) for non-prescription medicines as they are required by legislation but OTC when applied to product or channel is confusing, meaningless, superfluous and has got to go."

Click here to contact Martin Wood by email.

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