Released on = April 16, 2007, 4:01 am

Press Release Author = Bharat Book Bureau

Industry = Marketing

Press Release Summary = OTC Pharmaceuticals - Market Report 2005 estimates that, in
2005, the total UK over-the-counter (OTC) pharmaceuticals market will be worth
£2.1bn at retail selling prices (rsp), a rise of 3.7% on 2004.

Press Release Body =
OTC Pharmaceuticals - Market Report 2005

OTC Pharmaceuticals - Market Report 2005 estimates that, in 2005, the total UK
over-the-counter (OTC) pharmaceuticals market will be worth £2.1bn at retail selling
prices (rsp), a rise of 3.7% on 2004. Over the past 5 years (2001 to 2005), growth
in the market has been somewhat erratic, with annual increases ranging from a high
of 7.6% in 2002 to a low of just 0.9% in 2004.

The UK market for OTC pharmaceuticals is heavily dependent on the prescription
pharmaceuticals market. Most OTC products were previously prescription-only products
and were subject to the high degree of regulation and scrutiny, coupled with the
significant investment in both time and money, that creates such substantial
barriers to market entry. In addition, the time spent as a prescription product
generates significant brand recognition and, in some instances, brand loyalty from
customers. As a result, many (although not all) competitors in the OTC
pharmaceuticals market are manufacturers of prescription pharmaceuticals, such as
GlaxoSmithKline (GSK) and Bayer. Others, such as Reckitt Benckiser and Johnson &
Johnson, have more diversified interests.

Since 2003, the Government has been heavily promoting self-medication through a
number of initiatives, as well as through legislation, public education and the
restructuring of NHS services towards more patient-centred care and facilitating
self-care by the patient. In addition, a more streamlined delisting process is
facilitating the entry of new products into the OTC market, while a relaxation of
regulations is permitting a greater variety of retail outlets to sell such products,
with the effect of improving access to the general public.

However, from the industry\'s perspective, greater competition from new products and
different retail outlets - particularly supermarket chains - together with the
abolition of resale price maintenance (RPM) in 2001, has led to significant price
cutting. In turn, this has created an increasingly price-sensitive market, with
profits being significantly squeezed.

A number of factors, including increasing competition and price sensitivity, will
serve to limit growth in the OTC pharmaceuticals market, despite positive government
encouragement and the entry of many new products. Key Note forecasts that future
annual growth in the market will rise year on year from 4.5% in 2006 to 6.5% by
2010. However, if the Government were to take certain actions, such as limiting the
availability of free prescriptions, market growth could alter significantly.

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