OTC

OTC Pharmaceuticals in
Europe
Industry Profile
Reference Code: 0201-0364

Publication date: December 2009
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Europe - OTC Pharmaceuticals

© Datamonitor (Published December 2009) Page 2
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Market Value
The European OTC pharmaceuticals market grew by 2.7% in 2008 to reach a value
of $38.9 billion.
Market Value Forecast
In 2013, the European OTC pharmaceuticals market is forecast to have a value of

$44.6 billion, an increase of 14.8% since 2008.
Market Segmentation I
Sales of cough and cold preparations generated 17.9% of the European OTC
pharmaceuticals market's value.
Market Segmentation II
Germany accounts for 23.4% of the European OTC pharmaceuticals market's overall
value.
Market Share
Johnson & Johnson accounts for 11.3% of the European OTC pharmaceuticals
market's overall value.
Distribution
Pharmacies and drugstores form a leading distribution channel in the European OTC
pharmaceuticals market, accounting for 73.7% of the total value.

CONTENTS
TABLE OF CONTENTS
EXECUTIVE SUMMARY 3
CHAPTER 1 Market Overview 7
1.1 Market Definition 7
1.2 Research Highlights 7
1.3 Market Analysis 8
CHAPTER 2 Market Value 9
CHAPTER 3 Market Segmentation I 10
CHAPTER 4 Market Segmentation II 11
CHAPTER 5 Market Share 12
CHAPTER 6 Competitive Landscape 13
CHAPTER 7 Leading Companies 17
7.1 Johnson & Johnson 17
7.2 GlaxoSmithKline Plc 21
7.3 Bayer AG 25
CHAPTER 8 Distribution 29
CHAPTER 9 Market Forecasts 30
9.1 Market Value Forecast 30
CHAPTER 10 Macroeconomic Indicators 31

CONTENTS
CHAPTER 11 Appendix 32
11.1 Methodology 32
11.2 Industry Associations 33
11.3 Related Datamonitor Research 33

CONTENTS
LIST OF TABLES
Table 1: Europe OTC Pharmaceuticals Market Value: $ billion, 2004-2008 .....................9
Table 2: Europe OTC Pharmaceuticals Market Segmentation I: % Share, by Value, 2008

.........................................................................................................................10
Table 3: Europe OTC Pharmaceuticals Market Segmentation II: % Share, by Value, 2008
.........................................................................................................................11
Table 4: Europe OTC Pharmaceuticals Market Share: % Share, by Value, 2008...........12
Table 5: Key Facts: Johnson & Johnson ........................................................................17
Table 6: Key Financials: Johnson & Johnson .................................................................20
Table 7: Key Facts: GlaxoSmithKline Plc .......................................................................21
Table 8: Key Financials: GlaxoSmithKline Plc ................................................................24
Table 9: Key Facts: Bayer AG ........................................................................................25
Table 10: Key Financials: Bayer AG .................................................................................28
Table 11: Europe OTC Pharmaceuticals Distribution: % Share, by Value, 2008 ..............29
Table 12: Europe OTC Pharmaceuticals Market Value Forecast: $ billion, 2008-2013.....30
Table 13: Europe Exchange Rate, 2004-2008..................................................................31

MARKET OVERVIEW
CHAPTER 1 MARKET OVERVIEW
1.1 Market Definition
The OTC pharmaceuticals market values the total sales of traditional medicines,
cough and cold preparations (tablets, mixtures, lozenges, topical remedies, inhalers),
vitamins and minerals (multi-vitamins, single minerals, single vitamins, tonics),
indigestion preparations (tablets, powders, mixtures), analgesics (Paracetamol, other
analgesics, Ibuprofen, Aspirin), and other OTC healthcare products including;
medicated skin products (anti-bacterial, acne treatments, anti-fungal, other medicated
skin products, disinfectants), topical OTC medicines (anesthetic products, anti-itch
products, antibiotic creams/gels), plasters & bandages (adhesive bandages/plasters,
first aid tape, gauze pads/rolled gauze, other tape or bandage, liquid bandages), first
aid kits and other OTC healthcare products (anti-smoking aids, rectal medications,
eye/ear drops, sleeping aids, and motion sickness) at retail selling price (RSP) and
include any applicable taxes. Any currency conversions used in the creation of this
report have been calculated using constant annual average exchange rates.
The global figure comprises the Americas, Asia-Pacific and Europe.
For the purpose of this report the Americas comprise Argentina, Brazil, Canada,
Chile, Colombia, Mexico, Venezuela, and the US.
Asia-Pacific comprises Australia, China, Japan, India, Singapore, South Korea and
Taiwan.
Europe comprises Belgium, the Czech Republic, Denmark, France, Germany,

Hungary, Italy, Netherlands, Norway, Poland, Romania, Russia, Spain, Sweden, the
Ukraine and the United Kingdom.
1.2 Research Highlights
The European OTC pharmaceuticals market generated total revenues of $38.9 billion
in 2008, representing a compound annual growth rate (CAGR) of 3.1% for the period
spanning 2004-2008.
Sales of cough and cold preparations proved the most lucrative for the European
OTC pharmaceuticals market in 2008, generating total revenues of $6.9 billion,
equivalent to 17.9% of the market's overall value.
The performance of the market is forecast to decelerate, with an anticipated CAGR of

2.8% for the five-year period 2008-2013, which is expected to lead the market to a
value of $44.6 billion by the end of 2013.

MARKET OVERVIEW
1.3 Market Analysis
The European OTC pharmaceuticals market grew at a steady rate for the period
spanning 2004-2008. However, the rate of growth for this market is expected to
decelerate in the forthcoming five years.
The European OTC pharmaceuticals market generated total revenues of $38.9 billion
in 2008, representing a compound annual growth rate (CAGR) of 3.1% for the period
spanning 2004-2008. In comparison, the German and French markets grew with
CAGRs of 0.7% and 2.2%, respectively, over the same period, to reach respective
values of $9.1 billion and $4.6 billion in 2008.
Sales of cough and cold preparations proved the most lucrative for the European
OTC pharmaceuticals market in 2008, generating total revenues of $6.9 billion,
equivalent to 17.9% of the market's overall value. In comparison, sales of analgesics
generated revenues of $5.8 billion in 2008, equating to 14.9% of the market's
aggregate revenues.
The performance of the market is forecast to decelerate, with an anticipated CAGR of

2.8% for the five-year period 2008-2013, which is expected to lead the market to a
value of $44.6 billion by the end of 2013. Comparatively, the German market will
decline with a compound annual rate of change (CARC) of -0.2% and the French
market will grow with a CAGR of 2.1%, over the same period, to reach respective
values of $9 billion and $5.1 billion in 2013.

MARKET VALUE
CHAPTER 2 MARKET VALUE
The European OTC pharmaceuticals market grew by 2.7% in 2008 to reach a value
of $38.9 billion.
The compound annual growth rate of the market in the period 2004-2008 was 3.1%.
Table 1: Europe OTC Pharmaceuticals Market Value: $ billion, 2004-2008
Year $ billion € billion % Growth
2004 34.4 23.5

2005 35.5 24.3 0.00%
2006 36.6 25.0 3.00%
2007 37.8 25.8 3.40%
2008 38.9 26.6 2.70%
CAGR, 2004-2008: 3.1%
Source: Datamonitor DATAMONITOR
Figure 1: Europe OTC Pharmaceuticals Market Value: $ billion, 2004-2008
$ billion % Growth
45 4.0%
40 3.5%
35 3.0%
30
% Growth
2.5%
$ billion
25
2.0%
20
1.5%
15
10 1.0%
5 0.5%
0 0.0%
2004 2005 2006 2007 2008

MARKET SEGMENTATION I
CHAPTER 3 MARKET SEGMENTATION I
Sales of cough and cold preparations generated 17.9% of the European OTC
pharmaceuticals market's value.
Sales of analgesics generated a further 14.9% of the market's value.
Table 2: Europe OTC Pharmaceuticals Market Segmentation I: % Share,

by Value, 2008
Category % Share
Cough and cold preparations 17.90%

Analgesics 14.90%
Traditional medicines 14.50%
Indigestion preparations 11.60%
Vitamins and minerals 8.70%
Other 32.50%
Total 100.0%
Figure 2: Europe OTC Pharmaceuticals Market Segmentation I: % Share,

by Value, 2008
Cough and cold

preparations
17.9%
Other
32.5%
Analgesics
14.9%
Vitamins and
minerals
8.7% Traditional
Indigestion medicines
preparations 14.5%
11.6%

MARKET SEGMENTATION II
CHAPTER 4 MARKET SEGMENTATION II
Germany accounts for 23.4% of the European OTC pharmaceuticals market's overall
value.
The United Kingdom accounts for a further 14.5% of the total market value.
Table 3: Europe OTC Pharmaceuticals Market Segmentation II: % Share,

by Value, 2008
Geography % Share
Germany 23.40%
United Kingdom 14.50%
France 11.80%
Italy 9.90%
Rest of Europe 40.40%
Total 100.0%
Figure 3: Europe OTC Pharmaceuticals Market Segmentation II: % Share,

by Value, 2008
Italy
9.9%
France
11.8%
Rest of Europe
40.4%
United Kingdom
14.5%
Germany
23.4%

MARKET SHARE
CHAPTER 5 MARKET SHARE
Johnson & Johnson accounts for 11.3% of the European OTC pharmaceuticals
market's overall value.
GlaxoSmithKline Plc accounts for a further 8.4% of the regional market's value.
Table 4: Europe OTC Pharmaceuticals Market Share: % Share, by Value,

2008
Company % Share
Johnson & Johnson 11.30%

GlaxoSmithKline Plc 8.40%
Bayer AG 6.90%
Other 73.40%
Total 100.0%
Figure 4: Europe OTC Pharmaceuticals Market Share: % Share, by Value,

2008
Johnson &
Johnson
11.3%
GlaxoSmithKline
Plc
8.4%
Bayer AG
6.9%
Other
73.4%

COMPETITIVE LANDSCAPE
CHAPTER 6 COMPETITIVE LANDSCAPE
The OTC pharmaceuticals market will be analyzed taking manufacturers of OTC

drugs as players. The key buyers will be taken as pharmacies, general stores and
supermarkets, and manufacturers of active pharmaceutical ingredients (API) as the
key suppliers.
The European OTC pharmaceutical market is highly fragmented, with the top three
players holding 26.6% of the total market by value. The market consists of
manufacturers of OTC drugs as players, and distributors such as pharmacies and
supermarkets as buyers. These distributors have less buyer power than the large
supermarkets, due to their smaller operational size.
However, certain buyers integrate backwards in this market; for example in the UK,
Boots has diversified into the development and manufacturing of drugs such as
"Ibuprofen"; which increases pressure on market players, and thus buyer power at
the same time. Suppliers include manufacturers of active pharmaceutical ingredients
(API). Furthermore, these ingredients are most often supplied to pharmaceutical
companies under contractual arrangements, increasing switching costs and
enhancing the power of suppliers.
Market entry is considered more difficult as some OTC manufacturers invest in new
product development which involves high product development costs. The need to
obtain approval for products from the regulatory authorities also creates barrier for the
new entrants in this market. Prescription drugs are the main substitute, but the threat
they pose is weak as they are often only used in situations where no adequate OTC
remedy exists.
Rivalry is strong, with increasing consolidation among the market players leading to
bigger companies and more competition. However, the market growth in the
European OTC drugs market mitigates rivalry somewhat, which is assessed as a
moderate force.
The European market will be analyzed by considering the distributors of drugs,

including pharmacies, general stores and supermarkets, as buyers. The pharmacies
and drugstores form the most important distribution channel for OTC drugs in this
market. These distributors have less buyer power than the large supermarkets, due to
their smaller operational size.
Moreover, large pharmaceutical companies with recognized brands wield

considerable power over smaller pharmacies and drug stores, thus reducing the
buyer power. Retailers often exert significant power in supply chains, however,
consumer preference for wide availability of self-medication options forces buyers in
this market to stock OTC pharmaceuticals.

However, OTC drugs are much more important to the business of a pharmacy than a
supermarket and as a result buyers' switching costs can differ slightly in this market.
In some countries, buyers integrate backward; for example in the UK, Boots has
diversified into the development and manufacturing of drugs such as "Ibuprofen"; but
this is not common. However, when such an integration takes place, it increases
pressure on market players, increasing buyer power at the same time. Overall buyer
power is moderate.
Suppliers to the OTC pharmaceutical market are mainly manufacturers of Active

Pharmaceutical Ingredients (API). Market players require a wide range of specialized
ingredients, which maintains supplier power. However many large pharmaceutical
companies have operations in chemical manufacturing. For instance, Teva
Pharmaceuticals manufactures a number of API products. Merck & Co also has its
own chemicals division.
Smaller pharmaceutical companies do not have the sufficient infrastructure to

manufacture chemical ingredients themselves, as they lack expertise and therefore
are often heavily reliant upon API manufacturers. Although some chemical
manufacturers only supply to pharmaceutical companies, many also supply to
numerous industries and develop chemicals for food ingredients, animal feed and
ceramic material manufacturers, reducing their dependence on revenues gained from
pharmaceutical supply.
APIs are most often supplied to pharmaceutical companies under contractual

arrangements, increasing switching costs and enhancing the power of suppliers.
Overall supplier power is strong.
The European OTC drugs market involves a high level of specialization and expertise
with high upfront investment costs, making the market difficult to enter. The main
costs are incurred from extensive clinical trials. Some OTC manufacturers invest in
new product development which involves high development costs from extensive
clinical trials. Despite this, smaller firms are prevalent in the market and can still
achieve efficiency through collaborations with larger firms which allows them to
benefit from increased funds (in the form of collaborative revenues), creating more
innovation and research opportunities.
The most realistic entry method would be as a small generic drug firm; a much less
costly business model than developing branded drugs. In developing countries, over
the counter drug manufacturers are much more likely to be generic firms and
traditional medicine manufacturers. In these countries regulation of prescription drugs
is not always distinguished from OTC drugs. However, in countries such as the UK,
for a medicine to be granted OTC status, it must have a wide safety margin and be
effective.

Europe has a regulatory body that approves drugs for use, the European Agency for
the Evaluation of Medicinal Products (EMEA). There are opportunities for new
companies in over-the-counter drugs with the strong growth of the market. This is
being fostered by an ageing population and by a global trend toward self medication.
There is also strong growth potential in developing markets due to the liberalization of
distribution channels and increasing awareness of health issues in these regions.
In the pharmaceutical industry, product recalls can damage brand image and issues
over the safety of drugs can impact end users decision to purchase OTC drugs,
lowering switching costs. Even in this market where some products are highly
important to the end user, customer preferences can have a strong pull-through on
manufacturers. However, it is unusual for an OTC drug to be withdrawn from the
market due to safety issues although there have been a few instances.
Drugs often become over the counter by switching from a prescription drug which can
increase consumer confidence in the product. Overall the threat of new entrants is
moderate.
Prescription drugs offer an obvious substitute to OTC pharmaceuticals, but these are
normally suited to treating more serious ailments, and thus largely fail to encroach
into the OTC market. Moreover most pharmaceutical companies produce both OTC
and prescription drugs, which diminishes any threat from this particular substitute.
Many consumers now use alternative medicines, like homeopathy but often in
conjunction with conventional medicine, thereby making them less threatening, and
more complementary.
Sustained use of alternative medicines instead of scientific preparations is often

linked with adherence to an alternative lifestyle, philosophy or political belief system,
like environmentalism. Thus, while there is niche demand for such products, the
majority of the populace is unlikely to view alternative medicines as a viable
alternative to OTC pharmaceuticals. Overall the threat from substitutes is assessed
as weak.
The OTC pharmaceutical market is witnessing increasing consolidation leading to

bigger companies and more competition. For example, Pfizer completed the
acquisition of Wyeth, an OTC pharmaceutical major, in October 2009. Most of the
leading firms are large multinationals, and their wide geographic spread reduces
rivalry. However, these firms have typically high fixed costs, as drug research and
development requires continued investment.

Exit barriers are fairly high as most companies that manufacture OTC drugs are
focused on the pharmaceutical market and are similar to one another. However,
some personal care companies operate in the OTC drugs market or even in
prescription pharmaceuticals meaning that exit barriers are lowered for these
companies. For example, Reckitt Benckiser owns the Nurofen and Strepsils brand
after acquiring Boots Healthcare International and is also primarily involved in the
production and distribution of household cleaning and personal care products.
In this market, manufacturers can differentiate by demonstrating a drug that has a

greater clinical benefit than another and also through a strong brand image. For
example, Ibuprofen is a popular painkiller but Nurofen is the best known brand which
has achieved strong sales. Sales growth has been sustained by innovation and
extensions to the product, for example the production of Nurofen fast relief. The
growth in this market mitigates rivalry somewhat. Overall, rivalry with respect to the
OTC drugs market is moderate.

LEADING COMPANIES
CHAPTER 7 LEADING COMPANIES
7.1 Johnson & Johnson
Table 5: Key Facts: Johnson & Johnson
Address: One Johnson & Johnson Plaza, New Brunswick, New

Jersey 08933, United States
Telephone: 1 732 524 2455
Fax: 1 732 2140332
Website: www.jnj.com
Financial Year-End: December
Ticker: JNJ
Stock Exchange: New York Stock Exchange
Source: Company Website DATAMONITOR
Johnson & Johnson (J&J) engages in the manufacture of health care products, and
provides health care related services for the consumer, pharmaceutical, and medical
devices and diagnostics markets. It is a holding company and has over 250 operating
companies that conduct business worldwide.
The company operates predominantly through three segments: consumer,

pharmaceuticals, and medical devices and diagnostics.
J&J's consumer segment develops and markets products for baby care, skin care,
oral care, wound care and women's health care. It also offers nutritional and over-the
counter pharmaceutical products. These products are distributed to individual
consumers, wholesalers or directly to independent and chain retail outlets. The
company offers baby care products through the Johnson's baby line of products. The
company markets the body wash and bath additives products under the brand name
AVEENO. The body wash products include positively radiant, daily moisturizing body
wash, advanced care body wash 10 OZ and skin relief body wash. Bath additives
include daily moisturizing foaming bath, daily moisturizing body wash, stress relief
foaming bath and shower and bath oil.
The company markets deodorants under the brand name Bebe. It also offers the
soaps under the brand name Purpose, Vendome and Ambi.
The major brands offered by J&J in skin care include Aveeno, Clean & Clear,
Johnson's adult, Neutrogena, RoC, Lubriderm, Beijing Dabao Cosmetics, and
Vendome product lines. The Oral Care products are offered under the Listerine and
Reach brand names. Major brands in the women’s health franchise are the Carefree
Pantiliners and Stayfree sanitary protection products.

LEADING COMPANIES
The product lines of nutritional and over-the-counter include Splenda, No Calorie

Sweetener; Tylenol acetaminophen products; Sudafed cold, flu and allergy products;
Zyrtec allergy products; Motrin IB ibuprofen products; and Pepcid AC Acid Controller
from Johnson & Johnson Merck Consumer Pharmaceuticals.
The pharmaceutical segment produces and markets products in the following

therapeutic areas: anti-infective, antipsychotic, cardiovascular, contraceptive,
dermatology, gastrointestinal, hematology, immunology, neurology, oncology, pain
management, urology and virology. These products are distributed directly to
retailers, wholesalers and health care professionals.
The major brands marketed by the segment include Remicade (infliximab) for the
treatment of Crohn’s disease, ankylosing spondylitis, psoriasis, psoriatic arthritis,
ulcerative colitis, and use in the treatment of rheumatoid arthritis; Topamax
(topiramate), approved for adjunctive and monotherapy use in epilepsy, as well as for
the prophylactic treatment of migraines; and Procrit (Epoetinalfa, sold outside the US
as Eprex), to stimulate red blood cell production.
J&J also offers Risperdal oral (risperidone) for treatment of the symptoms of
schizophrenia, bipolar mania and irritability, Risperdal Consta (risperidone), a
longacting injectable, and Invega TM (paliperdone) Extended-Release tablets, for the
treatment of schizophrenia; Levaquin (levofloxacin) and Floxin (ofloxacin), both in the
anti-infective field.Furthermore, the company offers Concerta (methylphenidate HCl)
for the treatment of attention deficit hyperactivity disorder; Aciphex/Pariet, a proton
pump inhibitor comarketed with Eisa; and Duragesic/Fentanyl Transdermal (fentanyl
transdermal system, sold outside the US as Durogesic), a treatment for chronic pain
that offers a novel delivery system.
The medical devices and diagnostics segment offers a wide range of products used
principally in the professional fields of physicians, nurses, therapists, hospitals,
diagnostic laboratories and clinics. The products are distributed to wholesalers,
hospitals and retailers. The segment offers Cordis’ circulatory disease management
products; DePuy’s orthopaedic joint reconstruction, spinal care and sports medicine
products; Ethicon’s surgical care and women’s health products. It also offers Ethicon
Endo-Surgery’s minimally invasive surgical products; LifeScan’s blood glucose
monitoring and insulin delivery products; Ortho-Clinical Diagnostics’ professional
diagnostic products and Vistakon’s disposable contact lenses. The distribution to the
health care professional markets is undertaken both directly and through surgical
supply and other dealers.
The international business of J&J is conducted by subsidiaries located in 56 countries

outside the US.

LEADING COMPANIES
The research facilities of J&J are located in the US, Belgium, Brazil, Canada, China,
France, Germany, India, Japan, the Netherlands, Singapore and the UK. The
company and its subsidiaries operate 147 manufacturing facilities. Of these, 61 are
located in the US, 35 in Europe, 16 in the Western Hemisphere (excluding the US)
and 35 in Africa, Asia and Pacific. In the US, eight facilities are used by the consumer
segment, 12 by the pharmaceutical segment and 41 by the medical devices and
diagnostics segment.

LEADING COMPANIES
Key Metrics
J&J generated revenues of $63.7 billion in the financial year (FY) ended December
2008, an increase of 4.3% over 2007. The company's net income totaled $12.9 billion
in FY2008, an increase of 22.4% over 2007.
During FY2008, the pharmaceutical segment recorded revenues of $24.6 billion, a

decrease of 1.2% over FY2007.
The medical devices and diagnostics segment recorded revenues of $23.1 billion, an
increase of 6.4% over FY2007.
Europe accounted for 26.3% of the total revenues in FY2008. Revenues from Europe
reached $16.8 billion in 2008, an increase of 7.3% over FY2007.
Table 6: Key Financials: Johnson & Johnson
2004 2005 2006 2007 2008

Revenues 47,348.0 50,514.0 53,324.0 61,095.0 63,747.0
Net Income 8,180.0 10,060.0 11,053.0 10,576.0 12,949.0
Profit Margin 17.3% 19.9% 20.7% 17.3% 20.3%
Total Assets 53,317.0 58,864.0 70,556.0 80,954.0 84,912.0
Total Liabilities 21,504.0 20,154.0 31,238.0 37,635.0 42,401.0
Employees 109,900 115,600 122,200 119,200 118,700
All in $ millions, except for employee numbers and margins
Source: Company Filings DATAMONITOR
Figure 5: Revenues & Profitability: Johnson & Johnson
Revenues Net Income Profit Margin
70,000 21.0%
60,000 20.0%
Profit Margin (%)
50,000
US$ Millions
19.0%
40,000
18.0%
30,000
17.0%
20,000
10,000 16.0%
0 15.0%
2004 2005 2006 2007 2008
Year

LEADING COMPANIES
7.2 GlaxoSmithKline Plc
Table 7: Key Facts: GlaxoSmithKline Plc
Address: 980 Great West Road, Brentford, Middlesex, TW8 9GS,

United Kingdom
Telephone: 44 20 8047 5000
Fax: 44 20 8047 7807
Website: www.gsk.com
Financial Year-End: December 31
Ticker: GSK
Stock Exchange: London Stock Exchange
GlaxoSmithKline (GSK) is a healthcare company specialized in the discovery,

development, manufacturing and marketing of pharmaceutical and consumer health-
related products. The company has operations in about 114 countries, with products
being sold in over 150 countries. Its principal R&D facilities are located in the UK, the
US, Japan, Italy, Spain and Belgium. Its products are currently manufactured in about
37 countries. The major markets for the company's products are the US, the UK,
France, Germany, Italy and Spain.
The company operates through two business segments: pharmaceuticals

(prescription pharmaceuticals and vaccines) and consumer healthcare [over-the-
counter (OTC) medicines, oral healthcare and nutritional healthcare].
The pharmaceuticals segment offers products for eight main therapeutic areas:
respiratory, central nervous system (CNS), anti-virals, metabolic, vaccines,
cardiovascular and urogenital, anti-bacterials, and oncology and emesis. For
respiratory therapy, GSK offers: Seretide/Advair, a bronchodilator and an anti-
inflammatory inhaler; Flixotide/Flovent and Becotide/Beclovent, inhaled steroids for
the treatment of inflammation associated with asthma and COPD (chronic obstructive
pulmonary disease); Serevent, a bronchodilator to treat asthma and COPD; Ventolin,
to treat bronchospasm and Flixonase/Fionase and Beconase, for the treatment of
perennial and seasonal rhinitis. The company markets the following products in CNS
therapy area: Seroxat/Paxil and Paxil CR, for the treatment of major depressive
disorder; Wellbutrin, an anti-depressant; Imigran/Imitrex, for the treatment of migraine
and cluster headache; Lamictal, for the treatment of epilepsy and bipolar disorder;
and Requip, for Parkinson's disease and restless legs syndrome (RLS).

LEADING COMPANIES
GSK's major products in the anti-virals area include: Combivir, Ziagen, Trizivir,
Epzicom/Kivexa and Lexiva/Telzir for HIV treatment; Zeffix, for the treatment of
Hepatitis B; and Valtrex, for episodic genital herpes. GSK offers the following
products for metabolic therapy area: Avandia, an insulin-sensitizing agent;
Avandamet, an insulin resistance that decreases glucose production; Avandaryl, an
insulin resistance and pancreatic insulin production stimulant; and Bonviva/Boniva,
for the treatment of osteoporosis.
The company markets about 30 vaccines across the globe. Its major vaccines include
Infanrix, a vaccine against diphtheria, tetanus and pertussis; Infanrix penta/Pediarix,
for protection against hepatitis B and polio; Infanrix hexa, for the protection against
Haemophilus influenza Type B; Boostrix, for the protection against pertussis; Fluviral,
a seasonal flu vaccine; Priorix, a measles, mumps and rubella vaccine; Typherix, a
vaccine for typhoid fever; Varilrix, a vaccine against varicella or chicken pox; Priorix-
Tetra, for the prevention of measles, mumps, rubella and varicella (MMRV); and
Mencevax, to prevent meningitis and Rotarix, for pediatric immunization. GSK's
hepatitis vaccines include Havrix for protection against hepatitis A; Engerix-B for
protection against hepatitis B; Twinrix, combined hepatitis A and B vaccine; FENDrix,
for the prevention of Hepatitis B in patients with renal insufficiency including high-risk
groups such as pre-hemodialysis and hemodialysis patients.
In the cardiovascular and urogenital therapy area, GSK offers Coreg, for treating
patients with mild, moderate and severe heart failure, heart attack or hypertension;
Levitra, for male erectile dysfunction; Avodart, for benign prostatic hyperplasia;
Arixtra, for the prophylaxis of deep vein thrombosis; Fraxiparine, for prophylaxis of
thromboembolic disorders; and Integrilin, for the prevention of early myocardial
infarction. In the anti-bacterials and anti-malarials therapy area, the company markets
Augmentin, for respiratory tract infections; Augmentin ES-600, to treat children with
recurrent or persistent middle ear infections; Augmentin XR, for pneumonia or acute
bacterial sinusitis; Ceftin/Zinnat, an oral antibiotic; Malarone, an oral anti-malarial.
GSK offers the following products for oncology and emesis therapy: Zofran, to
prevent nausea and vomiting associated with chemotherapy and radiotherapy for
cancer; Hycamtin, treatment for ovarian, cervical and small cell lung cancer; Bexxar,
for patients with CD20 follicular, non-Hodgkin's lymphoma; and Arranon (nelarabine),
for patients with T-cell acute lymphoblastic leukemia and T-cell lymphoblastic
lymphoma. GSK also markets Betnovate and Cutivate, anti-inflammatory steroid
products; Relafen, a non steroidal anti-inflammatory drug and Zantac, for the
treatment of peptic ulcer disease, and gastric acid related disorders.

LEADING COMPANIES
GSK's consumer healthcare segment markets OTC medicines, oral healthcare and
nutritional healthcare products. The company’s principal OTC medicines include
Panadol, a paracetamol/acetaminophen analgesic; smoking control products,
including Nicorette, NicoDerm, NiQuitin CQ and Nicabate;Tums, a calcium-based
antacid; Citrucel, a therapeutic bulk fiber laxative; Contac, for the treatment of colds;
and Abtei, vitamins, minerals and herbal supplements; Abreva, for the treatment of
cold sores; and FiberChoice, daily fiber supplements. GSK offers a range of oral care
products such as toothpastes and mouthwashes under the Aquafresh, Odol,
Sensodyne and Macleans brand names; and toothbrushes under the Aquafresh and
Dr Best brands. In addition, denture care products are available principally under the
Polident, Poligrip and Corega brand names. Under the nutritional healthcare
products, the company offers Lucozade, energy and sports drinks; Ribena, a
blackcurrant juice-based drink, and Horlicks, a milk-based malted food and chocolate
drinks.
On April 2009, GSK launched alli (orlistat 60mg), a non-prescription product for
weight loss which is available in pharmacies across Europe.

LEADING COMPANIES
Key Metrics
GSK generated revenues of $44.7 billion in the financial year ended December 2008
(FY2008), an increase of 7.2% compared to previous year. The company’s net
income totaled $8.4 billion in fiscal 2008, a decrease of 11.7% compared with 2007.
The consumer healthcare segment accounted for 16.3% of the total revenue
generated by the company in FY2008. The consumer healthcare segment recorded
revenues of $3.9 billion in FY2008, an increase of 11.7% compared to previous year.
OTC medicine accounted 49% of the total revenue generated by the consumer
healthcare segment in FY2008. OTC medicine sales increased 8.2% to $1.9 billion in
fiscal 2008 as compared with 2007. Sales in Europe accounted for 31.4% of the total
revenue generated by OTC medicine in FY2008.
Table 8: Key Financials: GlaxoSmithKline Plc
2004 2005 2006 2007 2008

Revenues 36,677.6 39,749.7 42,621.7 41,687.6 44,689.9
Net Income 7,171.8 8,605.1 9,889.7 9,568.6 8,445.4
Profit Margin 19.6% 21.6% 23.2% 23.0% 18.9%
Total Assets 42,106.0 49,912.8 46,894.0 56,895.6 72,292.7
Employees 100,019 100,728 102,695 103,483 99,003
Figure 6: Revenues & Profitability: GlaxoSmithKline Plc
50,000 25.0%
45,000
40,000 20.0%
Profit Margin (%)
35,000
US$ Millions
30,000 15.0%
25,000
20,000 10.0%
15,000
10,000 5.0%
5,000
0 0.0%
2004 2005 2006 2007 2008
Year

LEADING COMPANIES
7.3 Bayer AG
Table 9: Key Facts: Bayer AG
Address: 51368 Leverkusen, Germany

Telephone: 49 214 303 3000
Fax: 49 214 307 1985
Website: www.bayer.com
Financial Year-End: December
Ticker: BAYN
Stock Exchange: Frankfurt
Bayer is the holding company of the Bayer Group which includes approximately 320
consolidated companies worldwide. The group offers a range of products, including
ethical pharmaceuticals and other healthcare products, agricultural products, and
polymers. It operates in Asia Pacific, Europe, North America, Latin America, Africa,
and Middle East.
The business operations of the group are organized into three business subgroups:
HealthCare, MaterialScience, and CropScience.
The HealthCare subgroup researches, develops, manufactures, and markets

products for the prevention, diagnosis, and treatment of diseases in human beings
and animals. The healthcare business subgroup includes the pharmaceuticals and
consumer health reportable segments.
The pharmaceuticals segment develops, produces, and markets prescription

pharmaceuticals. These are used for the treatment of hypertension, cardiovascular
diseases, infectious diseases, cancer and multiple sclerosis, and for contraception.
The segment includes the operations of Bayer Schering Pharma.
Bayer Schering Pharma is engaged in manufacturing prescription medicines. It also

provides its products and services in the markets of diagnostic imaging,
hematology/cardiology, oncology, and primary care (anti-infectives, men's healthcare,
cardiovascular and metabolic diseases). It provides its products and services in the
markets of specialized therapeutics (drugs for treating diseases of the central nervous
system) and women's healthcare (contraception, menopause management, and
gynecological therapies).
The consumer health segment develops, produces, and markets over-the-counter

(OTC) medications, diagnostic products, nutritional supplements for humans and
animals, veterinary medicines and grooming products for animals. The OTC
pharmaceutical brands include Aspirin, Aleve, Bepanthen/Bepanthol and Supradyn.

LEADING COMPANIES
The consumer health segment comprises three global divisions: animal health,
consumer care, and medical care. The animal health division is headquartered in
Germany, while consumer care and medical care are based in the US.
The animal health division manufactures products for farm animals and companion
animals. The consumer care division provides non-prescription medicines and vitamin
products. The medical care division is primarily engaged in providing blood glucose
monitoring devices and contrast agent injection systems.
The MaterialScience subgroup is a supplier of high-performance materials such as

polycarbonates and polyurethanes and innovative system solutions used in a range
of products. Its customers include the automotive and construction industries, the
electrical/electronics sector, and manufacturers of sports and leisure articles,
packaging, and medical equipment. The material science business subgroup includes
the materials and systems reportable segments.
The materials segment develops, produces, and markets high-quality plastics

granules, sheet, and film. The materials segment comprises the polycarbonates
(PCS) and the thermoplastic polyurethanes business units (TPU). The PCS business
includes polycarbonates, polycarbonate blends, polycarbonate films, and
polycarbonate sheets. Makrolon is the best-known brand within Bayer
MaterialScience. Other products in the portfolio of the PCS include the high-heat
resistant Apec and various Makrolon-based blends such as Bayblend and
Makroblend. The TPU develops and sells a wide variety of resins and films which are
mainly used in the manufacture of shoes and clothes. The group has a total of eight
TPU resins and films production facilities around the world; four of which are located
in the Asia Pacific, two in Europe, and two in North America. The TPU resins are sold
under Desmopan, Texin, and Utechllan brands.
The systems segment develops, produces, and markets polyurethanes for a wide
variety of applications and coating and adhesive raw materials. It also produces and
markets inorganic basic chemicals. Polyurethanes are used primarily in the
automotive, construction and electrical/electronics industries, and also in a number of
specialty applications.
The CropScience subgroup is engaged in making products for crop protection and
non-agricultural pest control. The subgroup also has major activities in seeds and
crop plants with genetically optimized properties. It includes the crop protection and
environmental science and bioscience reportable segments.
The crop protection segment develops, produces, and markets a portfolio of

fungicides, herbicides, insecticides, and seed treatment products to meet a range of
regional requirements.

LEADING COMPANIES
The environmental science develops, produces, and markets a range of products for
the green industry, garden care, non-agricultural pest, and weed control, plant
biotechnology, and conventional seeds. Its major products include K-Othrine, Merit,
Premise, Racumin, Bayer Advanced, and Bayer Garden. Bioscience offers an
integrated portfolio of high quality seeds, trait technologies and high performance
crop protection products. The bioscience segment's major products include
Nunhems, Arize, InVigor, and FiberMax.
Besides the healthcare, material science, and crop science business subgroups, the
operations of the Bayer Group are supported by the service companies Bayer
Business Services, Bayer Technology Services, and Currenta.
Bayer Business Services is the Bayer Group's international center for IT-based
services. It provides its services in four areas: IT infrastructure and
telecommunications; procurement and logistics; human resources and executive
personnel services; and finance and accounting. The services range from
consultancy to the handling of entire business processes.
Bayer Technology Services is engaged in process development and in process and

plant engineering, construction and optimization. This company also develops
technology platforms that contribute to the efficiency of Bayer's operating units. Bayer
Technology Services offers integrated solutions along the life cycles of facilities,
processes and products.
Currenta offers services for the chemical industry including utility supply, waste
management, infrastructure, safety, security, analytics, and vocational training. This
service company is a joint venture between Bayer and laxness. It operates the
chemical park sites in Leverkusen, Dormagen, and Krefeld-Uerdingen, in Germany.

LEADING COMPANIES
Key Metrics
Bayer generated revenues of $48.2 billion in the financial year (FY) ended December
2008, an increase of 1.6% over FY2007. The company's net income totaled $2.5
billion in FY2008, a decrease of 63.5% over FY2007.
The consumer health segment (including OTC medicines) recorded revenues of $6.9
billion in FY2008, an increase of 3.6% over FY2007.
Europe, Bayer's largest geographical market, accounted for 44.2% of the total
revenues in the FY2008. Revenues from Europe reached $21.3 billion in FY2008, an
increase of 1.4% over FY2007.
Table 10: Key Financials: Bayer AG
2004 2005 2006 2007 2008

Revenues 43,543.4 36,143.7 42,369.9 47,387.4 48,167.3
Net Income 882.3 2,336.8 2,462.7 6,893.4 2,515.3
Profit Margin 2.0% 6.5% 5.8% 14.5% 5.2%
Total Assets 55,316.7 53,733.5 81,782.5 75,178.9 76,836.7
Employees 113,000 82,600 106,000 106,200 108,600
Figure 7: Revenues & Profitability: Bayer AG
60,000 16.0%
14.0%
50,000
Profit Margin (%)
12.0%
US$ Millions
40,000
10.0%
30,000 8.0%
6.0%
20,000
4.0%
10,000
2.0%
0 0.0%
2004 2005 2006 2007 2008
Year

DISTRIBUTION
CHAPTER 8 DISTRIBUTION
Pharmacies and drugstores form a leading distribution channel in the European OTC
pharmaceuticals market, accounting for 73.7% of the total value.
Supermarkets and hypermarkets account for a further 14.6% of the total market's
value.
Table 11: Europe OTC Pharmaceuticals Distribution: % Share, by Value,

2008
Channel % Share
Pharmacies / drugstores 73.70%

Supermarkets / hypermarkets 14.60%
Convenience stores 4.60%
Other 7.00%
Total 100.0%
Figure 8: Europe OTC Pharmaceuticals Distribution: % Share, by Value,

2008
Other
Convenience 7%
stores
4.6%
Supermarkets /
hypermarkets
14.6%
Pharmacies /
drugstores
73.7%

MARKET FORECASTS
CHAPTER 9 MARKET FORECASTS
9.1 Market Value Forecast
In 2013, the European OTC pharmaceuticals market is forecast to have a value of

$44.6 billion, an increase of 14.8% since 2008.
The compound annual growth rate of the market in the period 2008-2013 is predicted
to be 2.8%.
Table 12: Europe OTC Pharmaceuticals Market Value Forecast: $ billion,

2008-2013
Year $ billion € billion % Growth
2008 38.9 26.6 2.70%

2009 39.9 27.3 2.80%
2010 41.1 28.1 2.80%
2011 42.2 28.8 2.80%
2012 43.4 29.7 2.80%
2013 44.6 30.5 2.80%
CAGR, 2008-2013: 2.8%
Figure 9: Europe OTC Pharmaceuticals Market Value Forecast: $ billion,

2008-2013
$ billion % Growth
46 2.82%
45 2.81%
44 2.80%
43 2.79%
% Growth
42 2.78%
$ billion
41 2.77%
40 2.76%
39 2.75%
38 2.74%
37 2.73%
36 2.72%
35 2.71%
2008 2009 2010 2011 2012 2013

MACROECONOMIC INDICATORS
CHAPTER 10 MACROECONOMIC INDICATORS
Table 13: Europe Exchange Rate, 2004-2008
Year Exchange Rate ($/€)
2004 1.24208
2005 1.24296
2006 1.25466
2007 1.36986
2008 1.46325

APPENDIX
CHAPTER 11 APPENDIX
11.1 Methodology
Datamonitor Industry Profiles draw on extensive primary and secondary research, all
aggregated, analyzed, and cross-checked and presented in a consistent and
accessible style.
Review of in-house databases – Created using 250,000+ industry interviews and

consumer surveys and supported by analysis from industry experts using highly
complex modeling & forecasting tools, Datamonitor’s in-house databases provide the
foundation for all related industry profiles
Preparatory research – We also maintain extensive in-house databases of news,

analyst commentary, company profiles and macroeconomic & demographic
information, which enable our researchers to build an accurate market overview
Definitions – Market definitions are standardized to allow comparison from country to

country. The parameters of each definition are carefully reviewed at the start of the
research process to ensure they match the requirements of both the market and our
clients
Extensive secondary research activities ensure we are always fully up-to-date with
the latest industry events and trends
Datamonitor aggregates and analyzes a number of secondary information sources,

including:
- National/Governmental statistics
- International data (official international sources)
- National and International trade associations
- Broker and analyst reports
- Company Annual Reports
- Business information libraries and databases
Modeling & forecasting tools – Datamonitor has developed powerful tools that
allow quantitative and qualitative data to be combined with related macroeconomic
and demographic drivers to create market models and forecasts, which can then be
refined according to specific competitive, regulatory and demand-related factors
Continuous quality control ensures that our processes and profiles remain focused,
accurate and up-to-date

APPENDIX
11.2 Industry Associations
Association of the European Self-Medication Industry

7 Avenue de Tervuren * B-1040 Brussels, Belgium
Tel: 32 2 735 51 30
Fax: 32 2 735 52 22
http://www.aesgp.be
11.3 Related Datamonitor Research
Datamonitor Industry Profiles
Global OTC Pharmaceuticals

OTC Pharmaceuticals in Hungary
OTC Pharmaceuticals in Asia-Pacific
OTC Pharmaceuticals in Germany
OTC Pharmaceuticals in the United Kingdom
OTC Pharmaceuticals in Italy
OTC Pharmaceuticals in Belgium
OTC Pharmaceuticals in the Netherlands
OTC Pharmaceuticals in Spain
OTC Pharmaceuticals in the United States
OTC Pharmaceuticals in Canada

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Europe - OTC Pharmaceuticals

Market Value Forecast

In 2013, the European OTC pharmaceuticals market is forecast to have a value of

Europe - OTC Pharmaceuticals

CHAPTER 1 Market Overview 7

1.1 Market Definition 7

1.2 Research Highlights 7

1.3 Market Analysis 8

CHAPTER 2 Market Value 9

CHAPTER 3 Market Segmentation I 10

CHAPTER 4 Market Segmentation II 11

CHAPTER 5 Market Share 12

CHAPTER 6 Competitive Landscape 13

CHAPTER 7 Leading Companies 17

7.1 Johnson & Johnson 17

7.2 GlaxoSmithKline Plc 21

CHAPTER 9 Market Forecasts 30

9.1 Market Value Forecast 30

CHAPTER 10 Macroeconomic Indicators 31

Europe - OTC Pharmaceuticals

11.2 Industry Associations 33

11.3 Related Datamonitor Research 33

Europe - OTC Pharmaceuticals

Table 1: Europe OTC Pharmaceuticals Market Value: $ billion, 2004-2008 .....................9

Table 2: Europe OTC Pharmaceuticals Market Segmentation I: % Share, by Value, 2008

Table 4: Europe OTC Pharmaceuticals Market Share: % Share, by Value, 2008...........12

Table 5: Key Facts: Johnson & Johnson ........................................................................17

Table 6: Key Financials: Johnson & Johnson .................................................................20

Table 7: Key Facts: GlaxoSmithKline Plc .......................................................................21

Table 8: Key Financials: GlaxoSmithKline Plc ................................................................24

Table 9: Key Facts: Bayer AG ........................................................................................25

Table 10: Key Financials: Bayer AG .................................................................................28

Table 13: Europe Exchange Rate, 2004-2008..................................................................31

Europe - OTC Pharmaceuticals

CHAPTER 1 MARKET OVERVIEW

1.1 Market Definition

The global figure comprises the Americas, Asia-Pacific and Europe.

Europe comprises Belgium, the Czech Republic, Denmark, France, Germany,

1.2 Research Highlights

The performance of the market is forecast to decelerate, with an anticipated CAGR of

Europe - OTC Pharmaceuticals

1.3 Market Analysis

The performance of the market is forecast to decelerate, with an anticipated CAGR of

Europe - OTC Pharmaceuticals

CHAPTER 2 MARKET VALUE

Table 1: Europe OTC Pharmaceuticals Market Value: $ billion, 2004-2008

Year $ billion € billion % Growth

2004 34.4 23.5

CAGR, 2004-2008: 3.1%

Source: Datamonitor DATAMONITOR

Figure 1: Europe OTC Pharmaceuticals Market Value: $ billion, 2004-2008

Source: Datamonitor DATAMONITOR

Europe - OTC Pharmaceuticals

CHAPTER 3 MARKET SEGMENTATION I

Sales of analgesics generated a further 14.9% of the market's value.

Table 2: Europe OTC Pharmaceuticals Market Segmentation I: % Share,

Cough and cold preparations 17.90%

Source: Datamonitor DATAMONITOR