Drug makers branching out to over-the-counter, nutraceuticals segments

So far, the Indian nutraceuticals market has primarily been dominated by FMCG companies

With the prescription market staring at a patent cliff and price regulations, major drug makers such as Ranbaxy, Abbott, GlaxoSmithKline (GSK), Cadila Healthcare and Lupin are increasingly foraying into the nutraceuticals and over-the-counter (OTC) segments. These companies are launching products in categories such as mother-and-child care, weight management, dietary supplements and even cardiac care. These products involve huge margins, and experts say these segments are expected to witness rapid growth because of life-style related diseases and consumers turning health-conscious.

So far, the Indian nutraceuticals market, pegged at about $2 billion, has primarily been dominated by fast-moving consumer goods (FMCG) companies such as Nestle and Danone.

However, pharmaceutical firms believe with the kind of distribution networks and reputation they have, they would be able to capture the market soon.

While Elder Pharma continues to lead the pack in this segment, other drug makers such as Lupin, Torrent and Cadila Healthcare are also spreading their wings. “Nutraceuticals is a segment of interest for Lupin and we are looking at how we could tap into this opportunity, specifically with growing demand coming in from urban centres,” said Shakti Chakraborty, Lupin Group president for India and CIS. The company, which currently has a small product portfolio in the segment, is planning to expand through innovations and strategic in-licensing agreements globally.

 

Zydus Nutriva, a division of Cadila Healthcare, which started operations a few years ago with just two products in its kitty, is expanding to include a range of nutraceuticals products spanning segments such as weight management, dietary supplements and diabetes management. The group has also forayed into the OTC segment with a separate entity called Zydus Wellness. Zydus Wellness, owner of brands such as Ever Yuth, Sugar Free and Nutralite, is considering acquiring more brands or a suitable OTC entity soon. The subsidiary of Cadila Health has earmarked Rs 500 crore for the buyout.

While companies such as Abbott and GSK already have a good hold on the nutraceuticals and OTC market in India, others such as Ranbaxy are also planning to expand. In a recent interview with Business Standard, Ranbaxy chief executive and Managing Director Arun Sawhney had said the company was looking to build the OTC side of the business to grow in markets such as India, Russia and Romania.

According to Ikon Marketing Consultants, the domestic nutraceuticals market is poised to grow five-fold by 2020 this decade. “The market is growing at a healthy double-digit rate and may touch the Rs 19,500-crore mark this financial year,” Ikon said in a research report.

Experts say growth of the nutraceuticals market in India can largely be attributed to increased affluence, lifestyle diseases and a change in the consumer perception and mindset. In addition, increase in awareness about extra supplements among consumers, increasing health consciousness and rising healthcare costs are also aiding the growth of the nutraceuticals market.

Major companies in the segment are Amway, Dabur and Himalaya Herbal Healthcare.