They are relaunching older prescription brands in the space or taking an inorganic route to beat the slowdown in sales. The industry’s domestic pharmaceutical sales dipped to 5.5 per cent in 2017 — the lowest growth rate in eight years.
“The OTC business is a strategic move for Lupin, and the management recognises gestation period for establishing consumer health care business. We are looking at a business turnover of Rs 3 billion in a five-year horizon. The aim is to build a strong pipeline of brands worth over Rs 1 billion in large categories like vitamins and mineral supplements, gastrointestinal, lifestyle OTC,” said Anil Kaushal, Lupin’s head of consumer business.
Pegged at over $2.7 billion (Rs 188.6 billion) as on 2016, as per Nicholas Hall 2017 report , the Indian OTC market is expected to grow at a CAGR of 9 per cent to cross the $6.5 billion (Rs 441.1 billion) mark by 2026.
While Lupin is a late entrant in the space, peers including Sun Pharmaceutical Industries, and Cipla, among others, have been making a significant investment in this category. “We are growing at a healthy rate,” said Anantha Nayak, CEO of Cipla’s consumer health division. Cipla’s OTC business is held in a separate company, which has private equity firm Fidelity Growth Partners as co-investor.
OTC topical analgesic brand Combiflam Icyhot to India. “Research shows that consumers in India are increasingly self selecting their preferred health care brands and products. Self-medication has grown from 23 per cent to 41 per cent in the past 10 years. With this increased self medication and potential for new OTC regulation, we aim to grow our consumer health care portfolio in mid- to high-double-digits over the next five years,” said Nikhilesh Kalra, general manager, consumer health care, Sanofi, India.
“Our vision is to grow sales to Rs 10 billion by FY20. For the past eight years, we have been growing at 24 per cent, and we hope to continue at the same pace,” said Kedar Rajadnye, the chief operating officer (consumer products division) of Piramal Enterprises.
Last month, the Piramal group acquired Digeplex and associated brands from Shreya Lifesciences, adding to its presence in the Rs130-billion gastrointestinal market.
“Often pharma firms shift products from prescription to OTC when faced with the question of growth. Firms need a wide distribution network, a war chest for advertising and a business mindset like a FMCG to be successful in OTC segment,” said a senior executive from a pharma firm.
Rajadnye said Piramal Enterprises has invested in building a sales force and has a team over of 2,200 personnel. “Our idea is to build strong portfolio of brands, and grow the business through brand refresh and consumer connect,” he added.