Robert Buckeldee, Managing Director, OTC/Pharmacy Services, Nielsen Europe

SUMMARY: The over-the-counter (OTC) medicines category remains highly attractive with significant growth potential from both developing markets and established European and North American markets. However, the economic downturn has affected usage in several ways, which is troubling for both governmental agencies and manufacturers of the OTC products.

The global market for over-the-counter (OTC) non-prescription medicines remains buoyant, with growth in value sales in 2009 estimated at 4.7%, bringing the value of the category to over $95 bn (source: Nicholas Hall Company).  Much of this growth has been driven by developing markets, with double-digit growth recorded in Brazil, Russia, India and China (BRIC).  Many established mature markets for OTC medicines recorded very modest levels of growth.

As wealth and economic prosperity filters down through the layers in the BRIC markets and consumers find they have more disposable income, categories like OTC medicines will benefit from consumers helping themselves to treat minor ailments and prevent illness.

But as economic woes continue to circle around North America and Western Europe, and governments need to tighten the belt of public spending to help manage record debt levels, spending on healthcare within these developed economies will also come under intense scrutiny.  Only recently, the government in Greece has withdrawn state reimbursement from non-prescription medicines and they will not be the last to make radical changes to their healthcare financing.

The market for OTC medicines in developed Western Europe markets should start to see significant growth over time as consumers are encouraged to take proactive involvement in managing minor ailments and make less reliance on the state for help.

Hands-On Health Care
Against this backdrop, it is important to gauge consumer sentiment towards OTC medicines since the height of global economic uncertainty.  One year ago in March 2009, Nielsen asked consumers around the world whether the global economic crisis would impact their usage of the OTC medicines category.  Close to 50% of consumers globally indicated behavior would change, with one-quarter stating they would use the products less frequently and one-fifth saying they were more likely to use natural and traditional remedies.

Move the clock forward one year after the global economic crisis has affected day-to-day life and the same questions elicit key changes.  Most notably, only one-third (34%) of consumers now indicate the global economic crisis will affect their usage of non-prescription medicines in the year ahead.  A year of experience of the “new world order” has made more consumers realize that self-care is too important to put at risk.

Of those who indicate they will change OTC usage, there are subtle shifts in intentions compared to last year.  The 2010 results show a greater percentage of consumers now plan to visit the doctor more, buy cheaper products, and stop buying the products completely.

Protecting Equity
There are some key regional variations behind these changes.  The notion of visiting the doctor more frequently, and by extension being prescribed medicine rather than buying OTC products, is troubling for governments who need to manage healthcare budgets.

A recent study published by the PAGB in the U.K. —the trade association for manufacturers of over-the-counter medicines and food supplements—estimated that 57 million general practice consultations take place each year to treat minor ailments at a cost of £2bn to the National Health Service (NHS).  Governments need to take positive action to ensure consumers to visit the pharmacy as the first point of care for minor ailments and encourage them to buy OTC medicines.

Of concern to manufacturers of OTC products is the increase of consumers intending to purchase cheaper products or to stop buying them altogether.  Buying cheaper products feeds into an established trend and the growth of store brands and generic products within OTC medicines is proof that consumers increasingly understand the power of the active ingredient, as opposed to the brand.  The issue of dropping out of the category was relatively strong in the U.S., India and South Africa.  Market trends later in the year will determine if this intention is followed-up by action.

Within OTC medicines, supply feeds demand for store brands and generics, not the opposite.  So it is no surprise that the intention to buy cheaper products manifests itself in countries where chains are prevalent or where generics already have a strong foothold.  While market shares for store brand or generic products are generally lower than more mainstream branded grocery categories, the trend is rising and manufacturers need to invest in brand equity to protect sales.

Divergent Growth Strategies for East & West
The OTC medicines category remains highly attractive with significant growth potential from both developing markets and established European and North American markets.  Consumers understand that they can use OTC medicines without breaking the bank of their personal finances.

In developing markets, it is up to manufacturers to sell the benefits of their products to new consumers.  In Europe and North America, strategies will need to involve a more complex partnership with government agencies, healthcare professionals, pharmacists and retailers to encourage consumers to treat minor ailments without resorting to aid from state infrastructure and public finances.

SUMMARY: No matter where consumers live, healthcare is important. But where they live often determines how minor ailments are treated. While Europeans put their trust in the neighborhood pharmacist, North Americans rely more on the advice of doctors. In countries where healthcare infrastructures and economies are evolving, opportunities exist to lessen the considerable burden consumers currently put on doctors and help governments reduce their healthcare expenditure.

The sore throat and cough that accompany the onset of a cold usually sends the typical American to his local drug store to purchase a preferred over-the-counter remedy, chosen because of past experience with the product. Rarely—if ever—is the pharmacist consulted, and almost never is a doctor called for such a common malady. But in Europe, consumers have been taught that pharmacists are an important source of health care information and they are likely to be consulted almost as frequently as a doctor, according to a new global study by The Nielsen Company.

Surveying more than 27,000 consumers in 54 countries, Nielsen has benchmarked the incidence of 17 common minor ailments—all of which can be treated with non-prescription medicines—as well as how consumers typically deal with them. Globally, respondents suffered from an average of almost four (3.9) such ailments in the last 12 months. The most common ailments: headaches, endured by 44% of respondents, followed by cold (38%) and cough (34%). A hearty 13% suffered from none of the 17 conditions listed.

Latin Americans are most prone to suffering from minor ailments (4.73 out of 17) while consumers in Asia Pacific are least prone (3.48 suffered). On a country basis, the Dutch suffered least from these ailments, with an average of 2.47 followed by the Japanese and the Chinese. At the other end of the spectrum, consumers in South Africa have the highest levels of incidence at 5.47 followed by Philippines and New Zealand.

Consult the Doctor or Pharmacist?
Having established the level of incidence by country for each of the 17 ailments, Nielsen’s study explored whether the consumer would seek advice from either a doctor or a pharmacist in helping them with their ailment. Respondents were presented with four options:

1. Every time I suffer
2. Only when I experience symptoms I have not had before
3. Only when the symptoms are more severe than normal
4. Never

Consumer responses varied significantly across the ailments, and between doctor and pharmacist. Analysis of those who said they would never seek the advice of a doctor or pharmacist highlights the gap that still exists with consumers with respect to seeing the pharmacist as a point of care, rather than a retailer of products. For all the ailments (except hangover), a higher proportion of consumers said they would never seek advice from a pharmacist relative to the proportion who would never seek advice from a doctor. This gap, however, is generally lower in Europe, where the pharmacist has been promoted as a key part of the primary healthcare system in a number of countries, and generally higher in Latin America where the doctor remains embedded in the mindset of consumers as the place to go for advice.

Across the categories, a high percentage of flu sufferers will always seek advice from doctor and pharmacist, but generally speaking, consumers mostly seek advice for these minor ailments from a doctor and/or a pharmacist only when symptoms are more severe than they would normally experience. This finding indicates that for the vast majority of consumers suffering from these minor ailments, there is a willingness to work through the ailment without professional advice, either through routine self-medication with non-prescription medicines or other traditional remedies, or by letting the body self-correct. This finding further reinforces the need for manufacturers to drive brand equity within the self-medication sector, and build loyalty with their suffering consumers.

A more detailed analysis of two most common ailments shows strong regional differences. The headache ailment is the most commonly suffered globally, and it follows that the analgesics category is the largest in sales globally with over $9.5 billion of sales in 2008, according to OTC industry expert Nicholas Hall & Company. The cough ailment is the third most commonly suffered, but consumers are much more likely to engage with either a doctor or pharmacist for this ailment than with a headache.

On the global level, 34% of headache sufferers will never seek advice from a doctor about the ailment, compared to 44% who will never seek advice from a pharmacist—a 10 point gap in favor of the doctor. Similarly for coughers, there is a 13 point gap in favor of the doctor. When these gaps are viewed regionally, the gap narrows considerably in Europe to only 2% and 4% respectively. And the gap broadens significantly in Latin America to 24% and 26% respectively.

The many campaigns run by European governments and healthcare providers to position the pharmacist as a point of primary care are paying off, and consumers are more engaged with the pharmacist than in other parts of the world.

Interestingly, North America is similar to Latin America in terms of the doctor/pharmacist gap, but this can be attributed to the wide availability of non-prescription medicines that can be purchased without any pharmacist intervention. The role of the pharmacist in relation to minor ailments has been lessened through this process.

The Take-Away
Pharmacists in North America tend to be viewed as retailers, while in Europe they are viewed as a go-to for minor ailments. These views are fairly solid in consumers’ mindsets in their respective regions. But the real opportunity lies in Latin America, where evolving healthcare infrastructures and economies provide a chance to educate consumers to use the pharmacist as a point of primary care and advice. This will lessen the considerable burden consumers currently put on doctors in the region for advice about minor ailments and by extension help governments reduce their healthcare expenditure.

Consumers tend to want to treat minor ailments on their own, and the pharmacist can play an important role in helping consumers do that by helping them understand which medication might be best for what ails them. Additionally, manufacturers of OTC products need to understand the dynamics in each region and tailor marketing efforts to fully capitalize on growth opportunities. In the U.S., that may mean marketing direct to consumers; in Europe, marketing towards pharmacists may be more effective.

On November 12-13, I took part in a Washington D.C., hearing organized by the FDA on how pharmaceutical companies can use the Internet and social media to communicate with consumers. The hearing was a source of excitement in the healthcare industry – the FDA received more than 800 requests for 350 seats.

Over two days, more than 60 speakers – representing pharmaceutical companies, agencies, research firms, search and social media websites along with consumer organizations – shared their thoughts on how companies can responsibly engage consumers online, as well as questions and areas that need clarification from FDA.

Despite the variety of industries and agendas represented, I was surprised by the amount of consistency in the presentations and recommendations. Through the two days of the hearing, a few key themes emerged:

• No one can ignore the explosive power of social media.
  Several speakers shared great data about how often the Internet is used as a source for healthcare information. With patients, caregivers and doctors alike going online for healthcare information, it simply is not an option for pharmaceutical companies to remain separated from this discussion.
• No one company can be expected to monitor the whole of the Internet.
  In our Nielsen BuzzMetrics dataset of health-specific CGM sites, we collected an average of 83,000 messages per day over the past six months. This volume will only continue to grow, and no one can expect to monitor all of it.
• Pharma is ready to listen, but confusion persists.
  Most pharmaceutical companies would like to listen and even respond to consumer feedback online. However, there is confusion among pharmaceutical companies about how and when it is appropriate for them to engage with consumers online, and what responsibilities they have in doing so. This confusion often results in companies holding back on engaging in social media and sometimes even in listening to what their consumers are saying online.
• Adverse events are a red herring.
  Companies that have not done social media listening often have a fear that they will see a high volume of adverse events in online consumer conversation. (And for pharmaceutical companies, there is a requirement that these events are followed up and reported to the FDA.) In fact, the number of adverse events in online discussion is very low and manageable within the reporting systems that pharmaceutical companies already have in place.

This last point was the basis of my testimony at the hearing. In 2008, Nielsen analyzed online healthcare discussion to define the number of adverse events and found that just 4 of 500 messages contain adverse event information, and only 1 of those messages contained all of the criteria that are required for AE reporting.

For me, the key takeaway from the FDA hearing was this: More and more consumers are online looking for information on their health. Some of the information they find online is good, but some is not, and it’s not always easy to tell the difference. Right now anyone can contribute to the online health discussion except the pharmaceutical companies, who are waiting for guidelines from the FDA about how to engage online in an appropriate and responsible way.

There was a sense of hope among attendees at the hearing that the FDA will provide new guidelines on the Internet and social media relatively soon. When that happens, not only do we empower the pharmaceutical companies to interact with consumers online, but we give them a sense of duty to contribute to the conversation in a responsible way. Of course it’s not appropriate for pharmaceutical companies to get involved in every consumer discussion about healthcare online. But where these companies can contribute value to the discussion, let’s empower them to do just that.

Like many of my colleagues in the pharmaceutical/healthcare field, I look forward to watching and participating as the discussion continues to unfold.

• Download a healthcare-focused whitepaper authored by Melissa Davies: Listening to Consumers 101, How Marketers Can Leverage Consumer-Generated Media

Just as the offline conversation about health care reform is growing in the U.S., we are watching the online discussion grow and evolve as well. In the past month, health care reform discussions have increased by more than 1,000 percent, outpacing the online talk surrounding Swine Flu and the government’s “Cash for Clunkers” program.

President Obama is keenly aware of the important role that bloggers play in sharing information about health care reform. On July 20, the President called for bloggers to help drum up support for his health care bill, causing another jump in online conversation in the days that followed. The White House has also been using Twitter to get the message out to the public. Of the 24 tweets that have been sent out in the last two weeks, 14 have been about health care reform.

Online discussion about health care reform – like offline discussion – is highly polarized. YouTube chronicles of recent protests at various public town hall meetings (which have been at the top of the list for most-cited videos in the last week), may have created an assumption that most citizens are strongly against the reform. However, in the past week there has been a slightly larger Web presence of those in support of reform, although the split is fairly narrow and is similar to other national polls on the topic. The bottom line is that the conversation is growing on both sides of the debate, as the following chart shows.

Much of the conversation centers around sharing the latest information on the health care reform debate, with both sides adding their own spin and attempting to debunk myths and misconceptions. The discussion is also highly charged, with some bloggers engaging in one-on-one arguments that degenerate to insults and name-calling. Some of these conversations are taking a very ugly turn, as we have seen them do in person as well.

While the health care reform conversation is taking place continues to grow in online political blogs and forums, it does not represent a significant share of conversations occurring on health care sites. Although patients may have the most at stake in health care reform, the conversations about this reform tend to be more political in nature and are less prominent in health forums and communities.

As the debate rages, consumers are increasingly turning to the official White House Web site to understand the key issues. In the last month, unique visitors to the health care pages of Whitehouse.gov have increased 390 percent, from 41,000 unique visitors in June 2009 to 201,000 in July. The administration has also established a site specifically dedicated to debunking the health care reform myths, www.whitehouse.gov/realitycheck.

Where do you stand?

According to the survey, half of respondents said that better healthcare infrastructure is the top social issue that they believe corporations should tackle, followed by fighting diseases such as HIV/AIDS, malaria, TB and cancer (38%) and education and adult literacy (30%).  Furthermore, 86 percent identified “countering terrorism” as a CSR initiative that should be taken up by corporate India.  Environmental protection is now expected and no longer identified as a CSR initiative by respondents.

More than half of respondents felt that corporations are honest toward their CSR activities, while one-third are skeptical of the motivations behind CSR, believing them to be simply publicity stunts.

“The public’s expectations of companies are on the increase as stakeholders see the significant impact they are having in various spheres, be it in educations, healthcare infrastructure or environmental conservation.  Their confidence in organizations undertaking socially beneficial projects is greater than their confidence in other channels that try to bring about positive social change,” said Vatsala Pant, associate director, consumer research at Nielsen.

The Nielsen Corporate Image Monitor is an annual survey of 1,800 people from a range of occupations in the top seven metropolitan areas.  Stakeholders range from the general public to media and policy makers.

The Pew Internet & American Life Project today released the results of its latest survey into how and when Americans use the Internet to gather health information. In The Social Life of Health Information, Pew reports that Americans are turning to an increasingly broader array of online and offline resources in their search for health information.

Highlights from the report include:

• 83 percent of online adults have looked on the Web for health information. (Since 2002, Pew Internet Project surveys have consistently found that 75-83 percent of Internet users look online for health information.)
• Half of online health inquiries are done on behalf of someone else, such as a family member or friend.
• 57 percent of e-patients say that their most recent online health inquiry had an impact on their own healthcare or the way they care for someone else.
• 60 percent of e-patients say they or someone they know has been helped by following medical advice or health information found on the Internet (a significant increase from 31 percent in 2006).

This survey also finds that the Internet does not replace healthcare professionals — a finding that echoes results of Nielsen’s 2008 study into the online and offline resources that people use as part of the healthcare decision-making process. Instead, e-patients take the health information they find online and use it to inform their offline conversations with healthcare professionals, family and friends.

As is always the case, Pew Internet Project’s latest report is a fascinating look at our online behavior, and I am looking forward to the chance to dive further into the data.

The FDA announced yesterday that it is launching a Transparency Task Force, charged with “making useful and understandable information about FDA activities and decision-making more readily available to the public in a timely manner and in a user-friendly format.” The task force will seek public input on how the FDA can be more transparent, including identifying “new technologies for informing the public.” To this end, there will be a public meeting on June 24, 2009, to solicit recommendations.

The FDA created a Transparency Blog to provide updates on the task force’s activities. Though they will be moderated, comments will be allowed on the new blog, and there are parameters around what will be posted (they are reasonable parameters that don’t appear to limit the scope of discussion). Although the FDA recently tipped its hat to Web 2.0, certainly there is much for the agency to learn about social media and all of the communications opportunities it represents.

In the category of government agencies setting a good example of transparency, we have already witnessed the CDC’s use of multiple social media tools to share information with the public during the swine flu crisis earlier this year. Twitter, YouTube and the CDC’s own Web site were all part of the agency’s outreach efforts and helped the CDC provide a calm voice of reason as public fears mounted.

Will the FDA follow the CDC’s lead and begin to leverage social media to make itself more transparent to the public? Taking it a step further, will the lessons learned through this process lead to more definitive guidance on how pharmaceutical companies can and should engage in social media? We look forward to finding out.

My colleague Pete Blackshaw recently hosted a conference call through Nielsen Online’s Social Media and Advocacy Round Table, focused on how brands can leverage the power of consumers’ contributions to the online community. In the call, Scott Wilder, Small Business Online Communities manager for software publisher Intuit, described listening to customer feedback through Intuit’s call center and realizing that customers thought their problems were unique, and that they felt alone in trying to deal with these problems. The solution: Intuit created an online community to help users connect to one another. The company then took it a step further, tapping individuals from the community as “credentialed authors” who can serve as discussion moderators within their areas of expertise.

How is this relevant to healthcare? We know from our Buzz research that patients — like Intuit’s customers — often feel alone with their condition, and come online looking to connect with others “like me.” The online community already is home to influential patients in many different disease categories who are highly informed about their condition, experienced with different treatment options and respected within their communities. When these influencers share their personal experiences with different medications, their online peers listen. Could there be a credentialed role for some of these influential patients, like the model of Intuit’s online customer community?

Case study: In GSK’s alli discussion forums, weight loss experts with different areas of expertise serve as community moderators. According to the site, the moderators are “compensated for their time but the opinions are their own.” GSK is very direct with visitors to the forum that “what you and we can say about alli and how to use it is restricted by Federal laws and regulations,” meaning that comments must be reviewed before they are posted and that some information shared on the site will need to be reported to the FDA.

I fully recognize that OTC is a different world from prescription treatments, so alli does not face the same types of restrictions that many other brands will. But consider this: In EyeonFDA’s recent interview with Dr. Jean Ah Kang of the FDA/DDMAC about pharmas and Web 2.0 (see my earlier blog post on this topic), Dr. Kang notes that a pharmaceutical company might enlist a consumer to act on behalf of the brand to communicate information within the online community. A brief mention, yes, but it’s not off the radar for the FDA.

Has the time come for pharma companies to bring some of these influential individuals into the fold? There will be challenges, to be sure. And, as Intuit’s Scott Wilder noted, one size does not fit all — it will take some experimentation to find the best solution for any company and its customers. But, as Wilder also noted, the benefits in engaging customers and providing the answers and information they need can be well worth the investment.

Last week brought an exciting new development for pharmaceutical companies interested in social media: blogger Mark Senak (EyeonFDA.com) posted an interview with an official from the FDA/Division for Drug Marketing, Advertising and Communications (DDMAC) about pharmas and Web 2.0. Until now, there has been so little mention of social media and the like from the FDA that many pharma companies have come to assume that Web 2.0 is strictly off-limits. The conversation that was started this week — though by no means the final word on whether and how pharmas can engage in social media — is a good starting point to help change that perception.

The big takeaway: The FDA does not prohibit pharmaceutical companies from engaging in social media. This is sure to bring a sigh of relief from brand managers who have wanted to take advantage of Web 2.0 but have been afraid of getting shot down by the FDA or by their own legal teams, who have understandably been very conservative on the issue in the absence of clear guidelines from the FDA. The important thing for pharmas to remember is fair balance in all communications, according to Dr. Jean Ah Kang, Special Assistant to Tom Abrams at DDMAC in charge of Web 2.0 policy development; like in other communications, information about a drug’s efficacy must be balanced with information on its risks.

The FDA won’t yet share its thinking on a process for further defining how pharmas should interact with the social media environment, other than to “recognize that this medium is here to stay.” I have had several conversations recently with clients who are ready to move beyond social media listening and are wondering how they can engage in the environment. Could the FDA’s simple acknowledgment be enough to open the door to a world of change and opportunity for pharmaceutical companies? We will be watching to see.