GSK targets consumers, chemist chains with tailored products

The world’s leading over-the-counter healthcare products maker will tailor brands for local consumers.

GSK’s key brands include Nicabate, Panadol, Macleans, Sensodyne and Otrivin

The world’s leading over-the-counter healthcare products manufacturer plans to tailor more of its global brands for Australian consumers and push its products through the big box chemist chains.

GSK Consumer Healthcare has emerged as a key division of GlaxoSmithKline’s pharmaceutical empire following the creation of a consumer healthcare joint venture with Swiss drug maker Novartis, completed this year.

After the merger with Novartis, the consumer healthcare business is set to account for about a quarter of GSK’s global revenues and Australia has emerged as a priority market for the new group, which has set up its Asia headquarters in Singapore.

“It has huge potential. We will be investing in terms of people, the business, and advertising disproportionately here to maximise our growth potential within Australia,” the head of GSK Consumer Healthcare for Asia-Pacific, Middle East and Africa, Zubair Ahmed, told The Australian after a recent visit to Australia.

“If you look at the OTC business, at data coming out of Australia, the overall consumer healthcare business has doubled in size over the past 10 years — it is now worth close to $9bn.

“You have a large ageing population. Consumers’ knowledge and self-education is pretty high, and per capita spend on healthcare in Australia is pretty high.”

GSK, whose key brands include Panadol, Macleans, Sensodyne and now Otrivin after the Novartis deal, has been tailoring versions of its global brands for the local market for several years.

Five years ago it developed Panadol Osteo for the targeted treatment of osteoarthritis, which affects 60 per cent of those over 65 years old. “Osteo is our single biggest SKU (product) in Australia an d it was developed and launched in the Australian market,” Mr Zubair said. “We will look at gaps in the consumer profile and formulate products.

“The brands will be global, but the formulation and packaging will be different.”

Targeted pain products have been controversial. The competition regulator has successfully taken court action against Reckitt Benckiser, the manufacturer of Nurofen, for making misleading representations about its Nurofen specific pain products.

GSK was also criticised by Health Minister Sussan Ley earlier this year for increasing the cost of Panadol Osteo when it was removed from the Pharmaceutical Benefits Scheme.

Mr Zubair said Australia was “ahead of the curve” globally in the rollout of big box pharmacy outlets. The biggest player, the Chemist Warehouse group, is capturing an increasing market share of the pharmaceutical, healthcare and cosmetics industries with discounting and promotions. In August pharmacy brands Terry White and Chemmart joined forces to fight the Chemist Warehouse retail juggernaut.

Mr Zubair said GSK would continue to put more product through the big box chains.

“We have to follow where the business is. It will become increasingly important for us. It helps us in dealing with a large chain — it is much more manageable,” he said.

“The trend will continue, as we saw with the grocery stores. The role of the corner store will always be there but it will not be the big-basket shopping. In some of the emerging markets we are finding the shoppers have developed a relationship with the pharmacist, who knows the customer.”