The Global Market For Over The Counter (Otc) Drugs was valued at USD 117 billion in 2015. The market is estimated to be worth USD 125 billion by the end of 2016. Considering the historical trend and possible future developments, the market is projected to reach a value of USD 169 billion by 2021, recording an expected CAGR of 6.23% over the forecast period of 2016-2021.
OTC medications don’t need a doctor’s prescription. This convenience of the consumer, enables the direct purchase of medicine, and is the prime driving force accelerating the growth of the OTC drug markets across the world. Moreover, certain factors have been instrumental in the growth of the OTC drugs market the last 10-15 years. These factors are the increasing awareness about- 1) medications required for minor health issues that do not need a visit to the doctor,2) the savings enabled by the use of OTC drugs in the healthcare industry, affordability, innovation of drugs, 3) high acceptance and adoption in the emerging markets and the switch by major pharmaceutical companies from Rx to OTC with an objective to invest less and earn more. Companies such as Pfizer, Johnson & Johnson, Sanofi, GSK and others, have increased their focus on OTC drug development to benefit from this promising market.
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However, the high possibility of substance abuse happens to be a major setback for 100% switch from Rx to OTC drugs. This is the biggest restraining factor hindering the growth of the OTC drugs market. Along with this restraint, a lack of awareness among the rural population in the developing and underdeveloped economies and, complications involved in taking wrong medications due to incorrect self-diagnosis, are working against the growth of the market.
The global OTC drugs market is segmented into two different categories; by product type and geography. On the product forefront, the market is segmented into different categories such as analgesics, cough, cold and flu products, dermatological products, gastrointestinal products, vitamins, minerals, weight-loss products, sleep aids, ophthalmic products, smoking cession aids and other products. Among these, dermatological products, cough, cold and flu products, vitamins, minerals and supplements, analgesics and gastrointestinal products, have more than 50% of the market share. An interesting fact about these top performers is the indirect proportionality between their sales volume and revenue generation. For example, skin products are sold least in volume, but contribute the most to the market, whereas, in the case of vitamins, minerals and supplements, the sales volume is high and the contribution to the market is the least, mainly because of their low pricing.
Geographically, the OTC drug market is segmented into five different regions comprising North America, Europe, Asia-Pacific, Middle East and Latin America. The Asia-Pacific and Latin America markets are set to record the highest market growth in the near future. Emerging nations like India are expected to rank at the top ten in the global OTC drug market. India is expected to record high exponential growth in the coming years. The market in Central Europe countries are expected to grow faster than the Western European countries, because of the increasing adoption rates.
The market in North America, currently at a mature stage, is expected to record a decline in growth rate during the forecast period. In fact, it is estimated to be dominated by the generic prescription medicine. Nearly 92% prescribed medication will be generic. This will be the result of the expected high patent cliff in the United States pharmaceutical, over the coming five years.
Leading companies in the global OTC market are Johnson & Johnson, Novartis, Bayer, Sanofi, Pfizer, PGT Healthcare, GSK, Boehringer Ingelheim and Takeda. Other than these, many big and small companies are trying their hands in this business. A major change in the market is expected to result in emergence of four new OTC drug companies as the market toppers in 2016 and that change is Sanofi’s acquisition of BI’s CHC division (exc. China). This deal will put Sanofi in the topmost position in terms of ranking, followed by Bayer, GSK and Johnson & Johnson.
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