CHPA conference highlights need for new avenues
The 2018 CHPA Annual Executive Conference, held last week at Turnberry Island north of Miami made news, provided the OTC industry with actionable insight, reorganized leadership, expanded its scope and honored one of its own. On the content side, the conference focused on the how to leverage disruption for innovation and growth.
There was a strong recurring theme throughout the conference; the OTC industry truly needs new growth avenues.
One of the staple industry presentations, IRI’s Changing Competitive and Retail Landscape, clearly showed slower growth and industry disrupters. The U.S. OTC industry reached $44 billion in revenues in 2017 (compared to the Rx market of $451Bn.) but recorded an anemic 5-year low 2.4% growth even with the strong flu season’s tailwinds. Even perhaps more surprising, U.S. OTC market growth outpaced Rx growth which came in at a recent low of 1.2%. Several ongoing growth trends — store-brand products, lack of major Rx-to-OTC switches and fewer innovative new products—all contributed. Meanwhile, brand owners had to continue to adjust to other unrelenting challenges, with drug chains visits dropping 6% and e-commerce’s share, now at 17% of consumer healthcare sales led by VMS and Weight Management, increasing. If the huge U.S. flu season impacting 10-12% of the country or over twice the 2016 rate hadn’t occurred, 2017 would have been a tough year for most conference attendees.
IRI did provide a roadmap for growth or at least focus areas. The overall trends point towards three core consumer groups providing growth potential: millennials, Boomers and Hispanics. And the go-to-market norms will be further disrupted by the continued growth of “click and collect” and the refinement of voice activation purchasing.
Within the CHPA vision and mission, CEO Scott Melville outlined several new CHPA initiatives and a new organizational structure. Notably, the trade group will now welcome non-Rx Medical Devices while reorganizing into three councils covering OTC Drugs, Supplements and now, Medical Devices. On the ongoing meeting front, the general Marketplace Exchange will be transitioned into two focused meetings: Marketing and Supply Chain.
Meanwhile, the industry’s long-desired Monograph Reform does seem to be gaining some traction in a difficult political environment. In a CHPA leadership discussion, Barbara Kochanowski, CHPA’s senior vice president of regulatory and scientific affairs, was quite positive about Food and Drug Administration commissioner Scott Gottlieb’s openness with the Policy Roadmap initiative providing clearer rules and a publicly available dashboard for tracking FDA progress on various issues. CHPA also is supporting a return for OTC eligibility within health savings accounts while continuing the industry’s long-standing consumer communication goals of safe usage, storage and disposal of OTCs.
CHPA also saw a changing-of-the-guard with the election of the CEO of Clarion Brands, Gary R. Downing replacing Jeffrey Needham, Perrigo executive vice president and president of U.S. consumer healthcare. Clarion is a Swander Pace Capital company and Downing brings 30+ years of domestic and international OTC experience. Lastly, the CHPA’s highest honor, the Ivan Combe Award was bestowed on John Hendrickson, the retiring CEO of Perrigo.
Ed Rowland is a Drug Store News Contributing Editor covering global issues. As the principal of Rowland Global LLC (www.rowland-global.com) he believes in the promise of global business and supports companies in their strategy, tactics and execution of international growth initiatives.
There was a strong recurring theme throughout the conference; the OTC industry truly needs new growth avenues.
One of the staple industry presentations, IRI’s Changing Competitive and Retail Landscape, clearly showed slower growth and industry disrupters. The U.S. OTC industry reached $44 billion in revenues in 2017 (compared to the Rx market of $451Bn.) but recorded an anemic 5-year low 2.4% growth even with the strong flu season’s tailwinds. Even perhaps more surprising, U.S. OTC market growth outpaced Rx growth which came in at a recent low of 1.2%. Several ongoing growth trends — store-brand products, lack of major Rx-to-OTC switches and fewer innovative new products—all contributed. Meanwhile, brand owners had to continue to adjust to other unrelenting challenges, with drug chains visits dropping 6% and e-commerce’s share, now at 17% of consumer healthcare sales led by VMS and Weight Management, increasing. If the huge U.S. flu season impacting 10-12% of the country or over twice the 2016 rate hadn’t occurred, 2017 would have been a tough year for most conference attendees.
IRI did provide a roadmap for growth or at least focus areas. The overall trends point towards three core consumer groups providing growth potential: millennials, Boomers and Hispanics. And the go-to-market norms will be further disrupted by the continued growth of “click and collect” and the refinement of voice activation purchasing.
Within the CHPA vision and mission, CEO Scott Melville outlined several new CHPA initiatives and a new organizational structure. Notably, the trade group will now welcome non-Rx Medical Devices while reorganizing into three councils covering OTC Drugs, Supplements and now, Medical Devices. On the ongoing meeting front, the general Marketplace Exchange will be transitioned into two focused meetings: Marketing and Supply Chain.
Meanwhile, the industry’s long-desired Monograph Reform does seem to be gaining some traction in a difficult political environment. In a CHPA leadership discussion, Barbara Kochanowski, CHPA’s senior vice president of regulatory and scientific affairs, was quite positive about Food and Drug Administration commissioner Scott Gottlieb’s openness with the Policy Roadmap initiative providing clearer rules and a publicly available dashboard for tracking FDA progress on various issues. CHPA also is supporting a return for OTC eligibility within health savings accounts while continuing the industry’s long-standing consumer communication goals of safe usage, storage and disposal of OTCs.
CHPA also saw a changing-of-the-guard with the election of the CEO of Clarion Brands, Gary R. Downing replacing Jeffrey Needham, Perrigo executive vice president and president of U.S. consumer healthcare. Clarion is a Swander Pace Capital company and Downing brings 30+ years of domestic and international OTC experience. Lastly, the CHPA’s highest honor, the Ivan Combe Award was bestowed on John Hendrickson, the retiring CEO of Perrigo.
Ed Rowland is a Drug Store News Contributing Editor covering global issues. As the principal of Rowland Global LLC (www.rowland-global.com) he believes in the promise of global business and supports companies in their strategy, tactics and execution of international growth initiatives.