OTC Drugs Market: Global Market, Consumer Behaviour & Covid-19 Pandemic
Global pandemic has stressed out people to be more concerned towards their health and keep up social distancing to take precautions against the covid-19 spread. One of the key positive changes observed in this pandemic is the “Self Care” by individuals. It has created global awareness among people towards taking self-health measures and be cautious about maintaining their health. According to our analysis, the global consumption for masks and hand sanitizers is estimated to grow over 674% and 240%, respectively, in the year 2020 compared to 2019. The mandatory usage of face masks and hand sanitizers in public places & offices by governments in many countries has also supported the health measures and awareness to fight against this pandemic. Due to the pandemic, people were asked to stay at home and allowed only limited visits to clinics or hospitals if a severe illness persists. Self-care has also supported the OTC drugs market, where consumers are more resilient to the health systems and prefer OTC drugs over (Prescription) Rx drugs. The changing attitude of people towards family and own health and prioritizing day-to-day care of their health have profoundly impacted the demand for OTC drugs globally.
OTC drugs are the first line of defense when the illness is not severe and symptoms are known to the patient or caretaker at home. Consumers prefer OTC drugs that are more accessible and have a trusted brand image. For minor ailments, the customer believes in OTC medicines without consulting doctors or going to clinics or hospitals or directly asks the pharmacists. OTC drug manufacturers advertise their products through different media like television, newspaper, etc., to promote the quality and usage against diseases and awareness towards the diseases. These OTC drugs also get promoted through word-of-mouth marketing. Using OTC drugs also saves time, has a cost advantage, and avoids unnecessary hospital visits. Therefore, it is essential for OTC drug manufacturers to follow all the regulatory guidelines in manufacturing and distribution according to respective countries or regions.
During the pandemic, the focus on increasing immunity against the Covid-19 virus has resulted in the significant growth in demand for vitamins, minerals, and supplements OTC drug products. Among the product types, in 2020, vitamins, minerals and supplements are estimated to account for the highest market share, followed by OTC drugs for cough, cold, and flu product types. Weight loss & dietary products, OTC drugs have seen significant growth in demand over the last 5 years from the developed countries. However, increasing health consciousness and maintaining weight among the mass population as a changing lifestyle in developing economies have boosted the market.
In the pandemic, the online retail market for OTC drugs has also increased by over 140%, where the customers are more informed and use technology to receive the products through online distribution channels. Online retail also helped customers be safe at home by not going out to retail pharmacy shops to risk the covid-19 infections. Lifestyle has also changed during the pandemic. The workplace environment and continuous pressure to adapt and adjust to changing lifestyle while working from homely living space, having addictive products to stay awake for longer hours on the job, etc., have caused stress to the people resulting in psychosomatic disorders like frequent headache, common cold, backache, allergy, acidity, chronic fatigue, etc. This has also supported the preference of OTC drugs as self-medication to overcome these disorders by the customers.
Based on the region, in 2019, the North American market accounted for the highest market share of the OTC drugs market, followed by Asia-Pacific, Europe, and others. By countries, United States is estimated to dominate the global OTC drugs market with a market share of 26.38% in 2020 with a CAGR of 6.23 % during 2020-2025. Compared to other regions, North America has the highest rate of switches from Rx to OTC drugs, and also the household expenditure is the highest for OTC drugs products (~USD 442 per year as of 2019) in the United States. According to CHPA, the country has approx. 54,000 pharmacies and more than 750,000 retail outlets that sell OTC products. In Europe and Japan too, the switching approvals of Rx to OTC drugs have increased. It is expected that in these regions, there would further increase in the number of switches of Rx drugs to OTC drugs in the coming years to promote self-medication and to promote more use of in-vitro diagnostics and OTC medicines.
The OTC drug market share is fragmented in regions and there is intense competition between local and international players. Some of the key players in this market are Johnson & Johnson, Pfizer Inc, Sanofi SA, GlaxoSmithKline PLC, Abbott Laboratories, Dr. Reddy’s Laboratories, Takeda, Novartis, Bayer Ag, Mylan NV, Reckitt Benckiser Group PLC, Boehringer Ingelheim GmbH, Teva Pharmaceutical Industries Ltd., Sun Pharmaceutical Industries Ltd., etc. among others.