CHPA leadership talks state of the industry
In preparation for the Consumer Healthcare Products Association’s 2015 Annual Executive Conference being held in Bonita Springs, Fla., this month, Drug Store News sat down with both Scott Melville, CHPA president and CEO, and Patrick Lockwood-Taylor, CHPA chair and VP personal health care, North America, for Procter & Gamble.
To view the full OTC Trends Report, click here.
Low-cost solutions
Patrick Lockwood-Taylor, CHPA, P&G
DSN: What is the state of the OTC industry for 2015?
Patrick Lockwood-Taylor: First, what we’re finding is 20 million Americans are now newly insured. And what we see is they're coming into the healthcare system just as we're reaching an acute shortage of primary care physicians. ... The second big megatrend is an aging population. By 2030, 20% of the U.S. population is going to be 65 years or older. So a newly insured, aging population, looking for effective, safe, low-cost healthcare solutions — that's where OTC obviously comes in.
DSN: You mentioned the influx of newly insured patients and the shortage of primary care physicians. Can you talk about one other trend we are seeing — the transference of the health care burden from payers to the consumer?
Lockwood-Taylor: Employee out-of-pocket expenses on health care [have increased] 40% just in the past three years. Consumers are worried. According to IRI, half of all Americans are concerned about paying for health care as they grow older. They see the shift of cost burden to them. They're doing the math. They're extrapolating forward and they're worried.
DSN: As these strategic shifts progress, what is the role of CHPA in helping to navigate these shifts?
Lockwood-Taylor: Let's start with consumers. First CHPA has a responsibility to educate consumers on OTCs, what they are, the conditions they cover, the benefits of usage, how they offer very high value as low-cost alternatives to prescriptions and to PCP visits, to share more about the safety and efficacy profile. ... Another area for us to work to is payers and providers, [who] are not always recommending the lowest cost and equally effective treatment. We need to do more work with payers and providers to get them more integrated in the process of educating [and directing] consumers to OTC.
Poised for greatness
Scott Melville, CHPA
DSN: What is the state of the over-the-counter industry for 2015?
Scott Melville: I can tell you it's an exciting and dynamic time to be involved with the business of OTC medicine. ... Over the past year or so [there] has been really an unprecedented level of transactions across our membership. We've seen mergers, acquisitions, joint ventures, portfolio rationalization. ... And that's good news, I think, for the industry because people are looking to get into the industry, or to expand if they're already in it. That's a strong sign of health for our industry. We're very engaged and poised to play an even greater role in our nation's evolving healthcare system as it continues to move toward a more value-based system.
DSN: What is CHPA focused on this year with all of those dynamics in play?
Melville: There's a lot on our plate right now, but from a very high level, we're in the middle of a good first draft of what our future healthcare system will look like, how it s accessed and how it's going to be paid for. We really think that plays right into our industry s sweet spot. But I think we as an industry — and certainly as an association — have to do a better job of letting stakeholders and policy makers know about the value proposition that OTC medicines provide. If we do that well, it is foundational to everything else that we do. So we're focused on quantifying and communicating that value ... that for every dollar a consumer spends on an OTC medicine, it saves the healthcare system $6 to $7.
DSN: What is CHPA doing on the legislative front?
Melville: The FSA issue continues to be one of our top priorities — if not our top priority — from a legislative perspective. ... We're hopeful that with two years left in the presidents administration and a congress that is likely to start moving legislation and sending it to him, that this will be at the top of the list for the kind of common sense reforms that President [Barack] Obama has said that he'd be willing to consider.
Another issue that we're very concerned about and very active on is educating consumers on safe use, safe storage and safe disposal of medicines. ... We're going to spend a lot of time in 2015 working with our brethren in the prescription industry, both pharma and the generic associations, and with the biotechnology industry and association, and with our retail partners [on this issue].