Self-Medication Business

Transcription

1 Self-Medication Business ~Implementing Two Strategies~ Developing Business in New Domains and Strengthening Existing March 23, 2006 Taisho Pharmaceutical Co., Ltd.

2 Taisho Pharmaceutical:Sales by Business Consolidated net sales:by business segment (fiscal 2005 forecast) 35% 65% Fiscal 2005 consolidated net sales forecast: billion Self-Medication Business Prescription Pharmaceutical Business

3 Strengthening the Self-Medication Business Two themes: 1. Develop new domains Health and beauty business (New product lineups and sales channels) Switch-OTC drugs, and Western herbs and other new materials 2. Strengthen OTC drugs based on market changes Revision of OTC drugs sales system (new Pharmaceutical Affairs Law) Existing OTC drugs framework may change greatly <Shift in focus from treatment to prevention >

4 The 3 Pillars of the Self-Medication Business Cure Prevention Beauty

5 Today s Presentation 1. Health and beauty business: Livita series New brand (Nourish) New sales channel (mail order and direct sales) 2. Switch-OTC drugs and new Pharmaceutical Affairs Law 3. Existing brands Nutrient drinks (Lipovitan series) RiUP series

6 Health and Beauty Business

7 Sizes of Health-related Markets Prescription pharmaceuticals 6.7 trillion Functional food products 1.5 trillion Foods for Specified Health Use 640 billion Supplements 110 billion OTC drugs 1.2 trillion (includes new quasi-drug products) Dietary products 110 billion Skin-beauty products 60 billion Oral-care products 150 billion Market sizes in fiscal 2004 Prescription pharmaceuticals: Statistical Survey on Trends in Pharmaceutical Production: shipments (monetary basis) OTC drugs: SDI + SRI Supplements, dietary and skin-beauty products: Fuji Keizai Co., Ltd. Foods for Specified Health Use: Japan Health Food & Nutrition Food Association Functional food products, and skin-care and oral-care products: Total Planning Center Osaka Skin-care products 630 billion

8 Positioning of Health and Beauty Business OTC drugs, others Cure Prevention Beauty Health and beauty business (self-care)

9 Expansion of Health and Beauty Business Taisho understands that consumer awareness is changing. The result: They want to be cured of and protected from illness, to lead healthier lives and to always be beautiful Consumers want to be healthier and have a better quality of life.

10 Promoting the Livita Series Strengthen the Livita series: 2 approaches To prevent metabolic syndromes Examples: Glucocare, Cholescare, Natural Care For anti-aging results and good quality-of-life Canton Beauty, Livita Q10 Green Tea Retail store development: Leverage Taisho Pharmaceutical s strengths

11 Outlook for the Livita Series Five new products scheduled for fiscal 2006 To prevent metabolic syndrome Reduce salt consumption in diet (e.g. soy sauce) Natural Care (drink) For anti-aging results and good quality-of-life CoQ10-related products Seven new products scheduled for fiscal 2007 Aiming to quickly achieve net sales of 5 billion for all Livita products

12 New Brand Nourish Mail order sales only Combination of supplements and skin-care products Commercialize through partnership with Toyo Shinyaku Co., Ltd. Containing flavangenol

13 New Sales Channel: Mail Order and Direct Sales Taisho Pharmaceutical Direct Aiming for fiscal 2008 sales of 5 billion Additional biboukassai items New drinks Supplement series, others Drinks 新ブランド新ブランド XX New brands

14 Channel Brand Strategy for Health and Beauty Business Prevent metabolic syndrome Anti-aging results Good quality-of of-life Active lifestyles Beauty New brand Y New brand X Retail store sales Mail order and direct sales

15 Switch-OTC and New Pharmaceutical Affairs Law

16 The Main OTC-switch Active Ingredients in Japan Fiscal year Ingredient (Indication) Lysozyme chloride (Cold remedy) Isopropylantipyrine (Painkiller) Sodium picosulfate (Laxative) Indometacin (Topical anti-inflammatory analgesic) Ibuprofen (Painkiller) Bromhexine hydrochloride (Cold remedy) Miconazole Nitrate (Athlete s foot treatment ) Hydrocortisone butyrate (Topical steroid) Bifonazole (Athlete s foot treatment) Famotidine Cimetidine Ranitidine hydrochloride (H2-blocker) Sodium cromoglicate (Antiallergic agent) Minoxidil (Hair regrowth agent;direct OTC) Nicotine (Smoking cessation) Diphenhydramine hydrochloride (Sedative hypnotic) Amorolfin hydrochloride Butenafine hydrochloride Terbinafine hydrochloride (Athlete s foot treatment) Ketotifen fumarate (Antiallergic agent)

17 Switch-OTC drugs: Japan, US and UK Japan US UK Existing OTC drug area in Japan Prevention of lifestyle-related diseases Smoking Cessation Preventive medicines for allergies - Cholesterol-lowering agents - - Other Products QOL improvement drugs Hair regrowth agents Sedatives Emergency hormone-based contraceptives - Others Migraine - Drugs for labial herpes - External medicines for mouth inflammation - - Note: The indicates that at least one of the effective pharmaceutical constituents for that product has been approved in that country.

18 Revision of OTC Sales System and Its Effect Bill to Amend Pharmaceutical Affairs Law 1. Provide information and establish an advice framework, corresponding to degree of risk Three categories of drugs groups A, B and C according to degree of risk 2. Specialists engaged in sales of drugs 3. Infrastructure to provide appropriate information and offer advice 4. Enforcement date: Risk categories to be specified in April 2007 Merits and demerits for Taisho s OTC drugs business Increase in number of retail stores that can handle drugs, including switch-otc drugs Increased costs across the whole industry to establish the infrastructure to provide information However, Taisho has already started to respond, and is the industry frontrunner

19 Promotion of Switch-OTC Drugs New sales system for switch-otc drugs Pharmacists will be obliged to provide information about highrisk OTC drugs (Group A) Appropriate involvement of specialists Role of OTC drugs will change as medical costs increase (Interim Report on Role of OTC drugs in Self-Medication, Ministry of Health, Labour and Welfare, November 2002) Trend in approval of switch-otc drugs Activities of the Pharmaceutical Society of Japan Activities of Japan Self-Medication Industry (JSMI)

20 Switch-OTC Drug Compounds Continue to aggressively secure candidate compounds for switch-otc drugs There are many compounds for which Taisho has already applied for approval, or which are undergoing clinical trials Switch-OTC drugs compounds comprise: 1Compounds which strengthen existing brands (e.g. cold remedies) 2Compounds which open up new domains (e.g. drugs to prevent lifestyle-related diseases or improve lifestyles)

21 Self-Medication Business OTC drugs, others Future switch-otc drugs Cure Prevention Beauty Health and beauty business (self-care)

22 Strengthening Existing Brands

23 Lipovitan D: Current Status and Future Strategies

24 Reasons for Market Contraction 1. Decline in user numbers (35% of respondents to a July 2005 survey said they had consumed a nutrient drink in the past 3 months, compared with 46% in a July 2003 survey) Decline in number of young people who start to drink nutrient drinks Less-taxing lives (e.g. decline in overtime hours) 2. Shift to health foods and health drinks Diversification of preferences Change in consumption patterns Nutrient drinks + health drinks

25 Nutrient Drink Strategies 1 1. Strengthen one bottle sales One-bottle sales routes are robust (e.g. convenience stores, station kiosks) Ensure consumers can buy when and where they want, in the volume they want Bulk sales channels (pharmacies and supermarkets) are still underdeveloped. There is room to expand one-bottle sales. Open up efficient sales channels Expressway kiosks Vending machines with high daily sales

26 Nutrient Drink Strategies 2 2. Increase number of users Promote sales to first-time consumers: Lipovitan D Jack Free sampling of 400,000 bottles in 5 major cities Strengthen Lipovitan series To recover from many types of tiredness

27 Nutrient Drink Strategies 2-1 Low-calorie drinks Drinks for women Drinks for tired business people Drinks for tired sportspeople Drinks for certain sales channels

28 Nutrient Drink Strategies 2 2. Increase number of users Promote sales to first-time consumers: Lipovitan D Jack Free sampling of 400,000 bottles in 5 major cities Strengthen Lipovitan series To recover from many types of tiredness Target loyal customers Implement new customer-retention strategies, including giveaways to selected applicants and applicants who are heavy or continuous users Develop drinks to meet needs other than recovering from tiredness

29 Meet Other Needs Meeting needs other than recovering from tiredness Desired benefits of nutrient drinks (2005) To recover from temporary tiredness To recover quickly from colds As a nutrition- or vitamin-related supplement To recover from chronic tiredness To prevent tiredness worsening To prevent tiredness To keep well throughout the day To increase physical strength To keep healthy To refresh oneself To recover physical strength after illness To feel better To overcome drowsiness To maintain energy and concentration To recover from or prevent mental tiredness To alleviate or prevent shoulder stiffness or backache Survey size: 1,000 respondents Only benefits selected by 10% or more respondents are shown

30 Nutrient Drink Strategies 3 3. Strengthen Livita and ALFE Target hitherto untargeted needs for nutrient drinks To prevent lifestyle-related diseases Develop products to meet women s needs The nutrient drink market is not yet mature. There are still various possibilities to expand sales.

31 RiUP Series To ensure consumers continue to use this series we must continuously launch new products 1. Combination drugs 2. Additional formulations 3. High-concentration drugs Data collected on minoxidil over the past 6 years since RiUP was launched is unrivalled by other companies. We will use the sales expertise of retail stores with good sales to strengthen the product series, for women as well as men.

32 Summary of Business Partnerships

33 Policy Concerning Business Partnerships Strengthen businesses by a variety of means, especially by partnerships with other companies, including companies outside the industry, as well as by acquiring businesses and brands Provide products and services that meet a variety of consumer needs Create new businesses through synergies between Taisho and companies outside the industry with different corporate cultures Taisho Share marketing expertise Introduce new materials Manufacturers outside the industry Pharmaceutical manufacturers Manufacturers outside the industry

34 Business Partnerships with Other Companies Toyo Shinyaku Co., Ltd. Name of joint venture: TAISHO ACTIVE HEALTH Co., Ltd. flavangenol -related products to be sold under Nourish brand by mail order and direct sales New products in Livita series (e.g. Natural Care) Yomeishu Seizo Co., Ltd. Equity-based alliance: increased equity interest from 6.6% to 14.5% Joint development of new products Greater efficiency in sales Personnel exchanges

35 Conclusion The self-medication market is entering a period of change: Taisho will seize the business opportunities provided by the various changes taking place. Taisho will develop business in new domains and further strengthen existing businesses to remain the frontrunner in the self-medication industry.