OTC sales are a shot in the arm for retailers seeking a rapid relief Is OTC the panacea we all seek, or will the sector reel under attack from a multiple disease called EDLP? Successive governments have been trying to ease the strain on the NHS by encouraging the public to self-medicate for minor ailments ­ after all, buying our own aspirin means fewer headaches for overworked doctors as well as more cash for the Treasury. And the shift away from prescriptions has proved good therapy for grocery retailers, too. Growth in over the counter medicines on the general sales list ­ those which don't require approval by a pharmacist ­ continue to rise in spite of counter government moves which seem designed to put a brake on the sector. Last year pack sizes of analgesics, such as paracetamol, aspirin and ibuprofen, were limited to a maximum of 16 tablets in an effort to discourage dangerous stockpiling of medicines at home. The move cut not only overdose rates ­ paracetamol overdoses reduced by half, according to latest research published in the Lancet ­ but sales volumes as well. Far from poisoning the OTC trade, though, the new regulations fortified it. Many grocers and convenience stores found themselves benefiting as purchasers returned more frequently to replenish their bathroom cabinets. Meanwhile, overall market value rose because manufacturers argued that smaller blister-pack sizes meant extra costs and therefore higher prices. Other factors beyond control of government or retailers also helped boost the market ­ not least last winter's flu epidemic which pushed up sales of remedies such as Lemsip, helping Reckitt Benckiser lift first quarter profits 20% to £67m. Healthier returns With today's busier, stressful lifestyles, OTC remedies offer a more convenient, one-stop option for the treatment of minor aches and pains ­ and the grocery retailer is today's destination shop. The most commonly used OTC medicines are headache remedies and analgesics. According to BMRB International's 1999 Target Group Index survey, 83.9% of adults questioned had used them in the 12 months prior to the survey, 57.9% had used cold or influenza remedies, 48.9% had used throat lozenges or pastilles, and 40.9% had used indigestion and stomach remedies. The total market for pharmaceuticals in the UK was estimated to be worth £9.05bn in the year 2000, with a growth of 8.3% from 1999. OTC medicines accounted for 17.7% of this (source: Key Note Report) and with the grocery cold and flu market sector worth £44m with 17% year on year growth (source: Information Resources), the sector is looking robustly healthy. Thanks, doc Recent research from the Proprietary Association of Great Britain (PAGB) suggests that GPs are also boosting sales by recommending OTC products to their patients. While elderly people tend to resist self-medication, preferring a visit the doctor's surgery for a consultation and free prescription, most under 65s have full confidence in their ability to treat themselves. And as the forty- and fiftysomethings move into their sixties and seventies, sales of OTC remedies are surely set to rise. That's not to say there aren't concerns. A recent RAC survey found widespread confusion about which remedies are safe to take while driving, and there have been reports that a small minority of people may have become addicted to medicines bought over the counter. "OTC medicines, when used properly, are completely safe," says Sheila Kelly, PAGB executive director. "However, they should not be used for more than a few days at a time without consulting a doctor or pharmacist for advice. All packs of OTC medicines clearly state this on the label. The vast majority of people read and follow these instructions and it is obvious that those people claiming to have a problem with addiction are ignoring that advice." In conjunction with a number of independent experts, the PAGB is undertaking research into misuse. Faith healing? Meanwhile, tried and trusted remedies continue to sell well in grocery outlets. Warner Lambert's cough medicine Benylin is still the best-selling grocery cough brand (AC Nielsen) and sales of the old panacea aspirin ­ for a while sidelined by stronger, new pain relievers like ibuprofen ­ are fighting fit, following publicity about its role in preventing second heart attacks. Despite the availability of cheap own brands, top-strength branded "max" and "power" variants of familiar brands are proving increasingly popular, with Lemsip Max Strength doubling its sales over the past year. Alternative remedies are also gaining in popularity. The herbal medicine and homeopathy market doubled during the five years to 1998 (source: Industry Sector Analysis). Although herbal and natural medicines still make up only a relatively small part of the market, it's a sector of increasing interest to the consumer. A Mintel survey recently showed public attitudes towards alternative medicines are becoming more favourable and most mainstream manufacturers are keeping a close eye on the trend. The price of relief While consumer confidence in branded remedies remains high, own-labels have become the focus for competitive price wars between grocery retailers. Asda, for example, boasts the cheapest aspirin at a penny a pill. But so long as retail price maintenance survives, EDLP will not impact on well known brands. According to Lemsip brand manager Sally Ditcher, "consumers have a poor understanding of product ingredients and how they work" and will therefore prefer to choose a brand they know and trust, whatever the price. The branded OTC sector's natural defences, though, may be under attack. On October 16 a seminal court hearing on price fixing is set to get pulses racing with multiple retailers arguing that there is no case for retail price maintenance in OTC, while manufacturers maintain that scrapping RPM would lead to some suppliers going out of business and even create a public health hazard, as promotion concentrates on raising volume sales. If, as Asda suggests, though, its removal would save consumers £300m a year, there would be a huge cheer from the 13% of Britons who, according to a Consumers' Association survey, said they had not bought a medicine at some point because it was too expensive (Industry Sector Analysis, 1998). Whatever the outcome in October, with increased pressure on the government to delist a wider range of remedies, increased research development, and an accelerating consumer trend towards self-medication, the OTC sector looks set for a very healthy future. {{Z SUPPLEMENTS }}