Panorama Faramceutico’s editorial team look at how the ongoing COVID-19 pandemic stands to affect Brazil’s over the counter (OTC) market segment during and after the COVID-19 pandemic.*
The OTC segment represents more than 40 percent of the self-service market in pharmacies. As it covers items with exclusive sale in the pharma channel, the management of this category should be an increasingly decisive strategy for the sector’s sustainability. Here we present six reflections on this market, presented by Rodrigo Kurata, director of Consumer Health at IQVIA Brazil, during the IV Workshop Retail Farma Brasil, held on the 24th June 2020.
1 – Reassessment of category management
Whether it is a physical store or e-commerce, category management should be revaluated according to the current situation. “The sales dynamic reflects the consumption profile of the population during the pandemic period. Prevention and basic health care segments show strong growth in the year,” says Kurata.
For the executive, it is important to reassess the portfolio offered in retail, whose role must be clear for each point of sale, always considering the behaviour of the shopper for joint decision making between the links in the pharmaceutical chain.
2 – Pricing and mix: the key to business
The consumer health segment is essential within the shopper’s health journey. This market registered a growth of 11.7 percent in sales in the first four months, mainly due to the high stocking in March and the increase in consumption of products related to self-service, an average of 8.5 percent in the last five years.
In 2019, the segment gained added value with the insertion of more sophisticated products and some categories with a higher price. “Pricing and mix have become key factors for the evolution of the business, since there is a trend of trade down for most of the main categories of the market”, analyzes Kurata.
3 – Macronavigation in the store
The rankings of the pharmacy areas take into account the large groups of categories in the store floor plan view. It is important to understand how each subcategory behaves in order to take the best actions. For this, IQVIA carried out a new segmentation, forming the macro journey of consumer purchases in order to diagnose trends in consumer health.
The OTC / MIPs segment is divided into two groups:
Relief of symptoms and treatments: includes all medicines for pain, fever, flu, cold, skin treatment, circulatory problems and eye care; as well as first aid products, such as dressings.
Prevention and maintenance: includes vitamins, tonics and stimulants, medicines for anxiety and mood, balance of intestinal flora, collagen and dietary fibre.
4 – Growth in prevention
From January to April this year, there was a strong acceleration in the prevention segment, with a 461 percent growth acceleration rate. The drugs for symptom relief had an increase of 130 percent in demand. “However, in the period from May 2019 to April 2020, the group of symptom relief and treatments showed a 5.2 percent drop in revenues, while the area of prevention and maintenance continues to rise a lot, even after storage, with high 37.9 percent,” states Kurata.
5 – Rising vitamins, minerals and supplements (VMS)
The VMS segment showed the greatest historical increase in the first quarter (30 percent) and seems set to maintain the high level of post-pandemic demand. “VMS growth is driven by low price brands,” explains Kurata.
According to him, products related to the situation of COVID-19 had a substantial increase in penetration and tend to become stronger, such as vitamins for prevention and increased immunity, tranquillizers and products for articulation.
6 – Stages of resumption and the management of the “new normal”
General indicators point to a reformulated normal that will demand a new model of the links in the pharmaceutical chain. Check out the steps:
A – Resume
Segments little impacted by COVID-19 have a more immediate return. For this it is necessary to pay attention to some aspects:
- More assertiveness: reduction of points of contact between consumers and products
- Virtual image – 1st impact: this first impression defines the relationship that comes afterwards and needs to be worked on well
- Financial constraint, focusing on the essential: with the economic crisis, cutting the non-essential is the most appropriate behaviour. So some repositioning, whether in price, image or communication, may be necessary
B – Rethinking
Some segments will need to take a step back to regain consumer confidence and promote overhauls at the point of sale.
C – Reinventing
In some segments, there will be a need for profound changes throughout 2021, with relevant innovations in portfolios and services.
* This is a translation of an article originally published June 29th 2020 in Panorama Famaceutico here (Portuguese).