The market for over-the-counter (OTC) products is growing faster than the Rx market and currently accounts for around 13% of the global pharmaceutical market. Unlike Rx drugs, pricing is unrestricted and the products can be marketed directly to consumers.
The percentage of OTC products is generally higher in growth markets than in mature markets, often due to the fact that consumers in those markets have less access to advanced healthcare and reimbursement systems. In these circumstances, OTC products may replace Rx drugs. In more developed markets, demand for OTC products is driven by a growing interest in self-healing, wellness and improved quality of life.
OTC products are commonly sold via retail channels such as pharmacies, drugstores or supermarkets directly to consumers. This makes it comparable to regular retail business with broad advertising and trade channel promotions. In the OTC segment the value is in brand names and consumers are very loyal to well-known brands to solve their health problems. Recommendation and reputation are very important in this market and therefore it takes time and promotional effort to build good brand names.