While physically over-the-counter (OTC) medicine packaging may mirror the prescription drug market, with continued strong demand for plastic primary pharmaceutical and blister packs, the underlying trends are being driven through packing innovations, competitive strategies and regulatory demands.

In 2016, the US alone reported sales of $45.8bn^[1] for non-prescription drugs, including $9.1bn of cough, cold, allergy and sinus medications and $4.8bn of pain relievers. And with the market growing at a CAGR of over 6% globally^[2] from now until 2020, there is a huge opportunity for manufacturing and packaging firms to capitalise.

Changing market dynamics

OTC makers and the services which support them are also mimicking the prescription drug industry, affected by many of the same regulatory challenges and accessibility hurdles: growing healthcare costs, ageing populations and demand for more affordable healthcare services. But continued M&A activity is also affecting the OTC space.

A number of mega-mergers have consolidated the consumer healthcare industry over the past few years. Bayer bought Merck & Co.’s OTC business – including the billion dollar Clarityn brand^[3] – in 2014 for $14.2bn,^[4] and the following year GlaxoSmithKline and Novartis formed a consumer healthcare joint venture through an asset swap deal.^[5]

Though the OTC space has been relatively subdued since, disappointing financial figures among some of the big players in 2017^[6] has awoken M&A speculation and the industry looks poised for another reshuffle. Both Pfizer and Merck KGaA could soon divest their consumer healthcare businesses,^[7] while Novartis may sell its stake in its joint venture to GSK. Once the growth opportunities from countries such as China^[8] are factored in, 2018 is shaping up to be a dynamic and potentially lucrative year for the OTC industry.

Innovations in packaging

There is increasing focus on patient compliance and safety, especially for OTCs as they do not come with the regime guidance of a health professional. Convenient packaging systems to administer OTCs is also being looked at as a differentiator – Reckitt Benckiser’s introduction of tube packaging for its Strepsils throat relief lozenges^[9] alongside traditional blister-packs being an example.

Sustainability is also a driver. Consumers want reduced waste while manufacturers want to improve environmental footprints and lower supply chain costs. Keystone Folding Box, for example, recently redesigned its child-resistant blister-packs for OTCs using 100% recyclable paperboard and no additional plastic.^[10] And a Sanofi Pasteur and Campak collaboration has reduced packaging volume by 50% and eliminated the need for PVC blisters in its product ‘Compact Box.’ The venture also claims to have a 30% improvement in distribution costs.

The 2017 Pharmapack awards showcased some of these innovations in both primary and secondary packaging design and 2018’s award ceremony will highlight further advances being developed by the industry.

Marketing moments

With as many as 300,000 product lines available over-the-counter in the US,^[11] the need for a consumer healthcare product to stand out on a retailer’s shelf has never been greater.

Regulations may still be stricter than with most consumer products – labels must be clear for easy identification by patients, tamper-evident and childproofing features are mandatory for many products, and serial numbers and expiry dates must be on display – however, packaging still plays a major marketing role for OTCs, which is not the case with prescription drugs.

Packaging offers a medium for brand promotion and spur-of-the-moment consumer sales, and is therefore being increasingly explored as a differentiator among OTC players. Bayer has demonstrated the importance of packaging marketing with a number of its OTCs. Oval-shaped bottles with raised logo grips made its Aspirin and Aleve brands stand out both visibly and by touch.^[12] Shamrock-shaped packaging has also differentiated Bayer’s Aspirin brand in a highly competitive market.^[13]

Serialisation and counterfeit OTCs

Global regulations are being implemented to reduce the risk of fake medicinal products entering the supply chain. The US’s Drug Supply Chain Security Act (DSCSA) brought in track and trace measures for drugmakers and packagers, the latest requiring unique serialisation numbers and bar codes on the smallest saleable unit of a pharmaceutical product.[14] Similar serialisation rules come into force in Europe early 2019 through the EU’s Falsified Medicines Directive (FMD).

Both explicitly focus on finished formulation prescription drugs, but OTC makers should not expect this to stay the case and packaging firms cannot afford to be caught off guard when regulations do arrive. (Even with years of warnings, many Rx manufacturers and packagers were unprepared for the DSCSA’s ruling to the extent that the FDA granted a one year reprieve to those which missed the November 2017 deadline).

Already there are exceptions for certain non-prescription medicines within the FMD; where there is evidence that an OTC is at risk of being counterfeited, the product falls on a ‘black list’^[15] and is required to undergo the same serialisation measures as prescription medicines: a 2-D barcode and an anti-tampering device (ATD) on the packaging.

And these exceptions are only going to increase as the sale of counterfeit OTC drugs in the market becomes more problematic. According to reports,^[16] counterfeit drugs account for around 10% of the global market, and 1% in the developed world, with falsified OTCs increasingly entering the space.

One example is a haul by French customs of over 2.4 million counterfeit drugs, half of which were packets of OTC pain relief medicine containing sugar in place of aspirin.^[17] Whether this demonstrated increased counterfeit activity or increased regulatory vigilance is debatable, but either way OTC makers must prepare themselves for future regulation.

And for more on this subject, the Serialisation, Track & Trace symposium 2018 takes place on February 7 as part of Pharmapack 2018 with case studies on serialisation implementing projects being presented by speakers from GS1, ISPE France, OPEN-SCS, Fareva, Jekson Vision, WIPOTEC-OCS, Antares Vision, OPTEL GROUP, and Adents.