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  1. Analysis
February 28, 2007

Packaged for Life

What are the dynamics driving the over-the-counter pharmaceutical market? Christian Saclier of Novartis talks cost, customers and clean environments with Huw Kidwell.

By Michael Cushine

HW: What is the dynamic in the over-the-counter pharmaceutical area?

CS: It is ultimately about the consumerisation of the business. OTC products are extremely challenging in terms of competition. Formulations and actives rarely change, although a few products switch from Rx to OTC each year.

“Convenience and portability are becoming very important, and to meet this need there are spray applicators for cold treatments.”

Because many different companies are selling the same kind of active with similar claims, packaging is a very important part of the consumer experience. This is why there is so much interest in the development of OTC packaging.

What strategies is Novartis developing to drive OTC sales?

Everything is related to consumer trends such as globalisation, the fast pace of life and career women, for example.

We are using consumer feedback to determine what people want from products and what they consider impractical. We are increasing the efficiency and attractiveness of primary and secondary packaging while improving convenience, ease of use and portability.

Basically, we are improving our products by directly addressing the basic market trends.

Are there any recent product launches that illustrate this?

Lamisil Once is a breakthrough treatment for athlete’s foot. Because we really wanted to convey how much better this improved treatment is, we produced a package with a high shelf impact.

We have also recently launched Nicotinell gum in a 12-count blister pack. The new packaging is easier to use and more prominent on the shelf.

What are the next trends in product administration and presentation?

Convenience and portability are becoming very important, and to meet this need there are spray applicators for cold treatments. Also, in the US some OTC cough and cold medications are being sold as a dissolvable strip. The regulations are more complex than dissolvable breath freshener strips, which are regulated as a food. However, I expect dissolvable wafer / strip OTC medications to be released in Europe very soon.

Another big development is in the area of devices for administering OTC medication by pump-spray inhalation of lyophilised powders or droplets, and we are currently working on this application.

How will the OTC product market develop in the future?

We are definitely going to work more closely with the marketing team to identify consumers’ needs and what drives their purchasing habits.

“Everyone is moving towards greater convenience.”

Everyone is moving towards greater convenience and practicality, but some of these projects have led to an increased use of materials. This is of great concern because of sustainability – we have to make sure that we, as packaging engineers, do not create excessive waste. Although we can develop sophisticated products, bringing true benefits, consumers are becoming more worried about the environment and a complex package could work against a product’s popularity.

Could refills for dispensing systems reduce waste?

Yes, these are definitely a possibility and it is something the company has considered. However, there are potential problems, such as contamination and hygiene. We will have to observe similar systems that have been introduced in the food and cosmetics markets to determine if this would be a success for us.

Another challenge is the regulations relating to child-resistant primary packaging and how this would work with a refillable packaging system. Also, concerns have been raised about the possibility of consumers using an OTC refill with the incorrect dispenser, which could affect the dosage. There are a lot of issues to be addressed before refills can be launched onto the OTC market.

How does pharmaceutical packaging compare with other industries?

“A big development is in the area of devices for administering over-the-counter medication by pump-spray inhalation.”

The food industry works on much bigger volumes, giving it greater economies of scale. The pharmaceutical industry deals with smaller product volumes, which makes it more difficult to introduce new packaging systems, as the tooling costs are much greater. As a highly automated industry, pharmaceutical packaging has been slow to change its manufacturing process.

What new materials are big in pharmaceutical packaging?

There is nothing really innovative at the moment, except using fewer materials, and we are already making lighter, more efficient packaging.

We are starting to look into polylactic acid (PLA), which could offer some potential. It is made from recycled corn and is considered biodegradable. However, there are some controversies surrounding it.

What are the pharmaceutical industry’s main challenges?

As a pharmaceutical company, we have to meet very high-quality standards and comply with numerous regulations, both pharmaceutical and environmental. This puts us under a kind of double pressure, unlike other industries.

Although we are working with pharmaceutical products, which have to be registered and so on, we are also trying to reduce our development times and costs by being smarter about the kind of products we introduce to the market.

What we want to do when we build a packaging pipeline is make sure that we are working on the right product, which has the right value for the consumer. To me, packaging is part of a total innovation that we sell to the consumer. It is rare to have a standalone packaging innovation, and even if you do, it may not be sustainable.

“As a highly automated industry, pharmaceutical packaging has been slow to change its manufacturing process.”

I don’t believe we should be innovating for the sake of innovation; it should come as a consumer proposition and include considerations about branding and formulation. And we should not expect packaging to solve all of our market issues.

We have to be careful about matching packaging innovations to suitable products, brands and markets if these products are to be a success.

The role of packaging innovation in marketing products to consumers will always be important for a number of reasons. Protecting children is one concern, but it must also be suitable for older or disabled people to use.

In addition, there is a whole raft of considerations and regulations to be taken into account when marketing an OTC product. The material used should not interact with the product and should, hopefully, be recyclable and inexpensive to produce.

However, from a purely aesthetic point of view, packaging can be attractive and is a valuable selling tool. A case in point is the Chinese OTC market, which is expected to be worth $3.5bn over the next five years. It is important for us to consider how this expanding market will affect the OTC industry and to work out what packaging the Chinese consumers will require.

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