Consolidating markets: Q&A with GSK Consumer Health’s Brian McNamara
Drug Store News on Sunday caught up with Brian McNamara, region head of Europe and the Americas of the recently christened GSK Consumer Healthcare, representing the joint venture between GlaxoSmithKline and Novartis to talk about what a consolidating OTC market means for the industry, and how GSK will be coming to market.
Drug Store News: What does a consolidating OTC market mean for the industry?
McNamara: The recent deals re-enforce the attractiveness of consumer health care and the widely held belief that it is an area poised for continued growth. With manufacturers and retailers continuing to consolidate, the question is how this actually drives value for the consumer and shopper. I strongly believe that in these combinations, there is huge potential to drive winning outcomes for consumers and shoppers.
The first thing we need to deliver as a result of these deals is a step change in the pace of innovation. We need to bring products to market that are differentiated and fulfill unmet consumer needs as quickly as possible. All you have to do is take a look at the success of some of the recent Rx-to-OTC switches in the United States — such as Flonase Allergy Relief, Nasacort 24 Hour, Nexium 24 and Allegra — just to name a few. The success of these switches show there is a real demand for differentiated solutions that address everyday health issues.
Second, beyond accelerating the pace of innovation, industry consolidation should lead to organizations that have improved capabilities in such areas as consumer insights. Further, there is major opportunity to better collaborate with our retail partners and leverage the value inherent in the data and insights they have on consumers and shoppers.
And finally, we’re all aware of the cost pressures faced by the U.S. healthcare system and the tremendous role that self-care can play in easing that burden. Industry consolidation always brings with it promises of greater efficiency and streamlined operations. But the end game should be improved insights and accelerated innovation, leading to better value for our consumers and customers.
DSN: What does the new GSK/Novartis joint venture GSK Consumer Healthcare bring to the industry, and when will the new OTC company be fully operational?
McNamara: The new GSK Consumer Healthcare, which was formed in March, is now one of the world’s largest consumer healthcare businesses, and a leading player in over-the-counter medications and specialist oral care globally. We’re now integrating our operations and continuing to serve our customers. In North America, we have a great portfolio of leading brands, in addition to the best capabilities and best talent from each company.
And, most importantly, the new GSK Consumer Healthcare is focused on helping more people do more, feel better and live longer. That purpose is why we’re in business and it’s no different for retailers and service providers, which makes us all completely aligned. Our shared purpose gives me a lot of confidence that we can do great things to improve the lives of consumers.
DSN: What does this mean for retail trade partners? How is this transition being navigated?
McNamara: As we launch the new GSK Consumer Healthcare, we realize that it’s an incredible opportunity to build a new company that does things better than each of its predecessors.
In our ongoing, proactive conversations with our trade partners and a survey of some key leaders at our retail partners, we know there are three key areas where our industry can do better in terms of supporting our retail customers.
The first is supply chain excellence. The new GSK Consumer Healthcare also will benefit from an increased capacity and flexibility in our manufacturing network. Like many of our industry peers, both GSK and Novartis have faced supply challenges in the past few years. And while our industry has made progress in recent years, we still have a long way to go. Our No. 1 priority is providing safe and efficacious products to our consumers, which means we must be able to deliver these products to our retail partners at the right time and cost. We realize that this is the foundation of trust between the consumer, the retailer and the manufacturer. At GSK Consumer Healthcare, we’re committed to creating an industry leading supply chain.
The second area is driving truly differentiated, consumer-focused innovation — and this means beyond Rx-to-OTC switch alone. Innovation can’t mean only ‘switch.’ We also have to be careful as manufacturers not to confuse ‘proliferation’ with ‘innovation,’ and to stay committed to investing in big, breakthrough ideas that drive real value for consumers. This requires better consumer insights, faster-moving research and development organizations and better communication with health authorities.
Finally, despite the fact that we’re getting bigger, we need to be more nimble, flexible and responsive than ever as we work together with our retail partners. In today’s rapidly evolving healthcare landscape, the retailer has become the key day-to-day healthcare partner for consumers. In order for us to collaborate more effectively, it’s critical that we don’t get buried in our own bureaucracy, and that we improve how we work with retailers to deliver value to the consumer.
DSN: What are the key OTC categories for the new joint venture? How will GSK Consumer maintain its leadership role in those categories?
McNamara: We have not announced the structure of the new company yet. However, the new GSK Consumer Healthcare has a well-balanced portfolio and a broad geographic footprint. By combining our OTC and fast moving consumer goods capabilities and expertise, we bring significant scale and opportunities for accelerated growth — bringing to market brands our consumers love and innovating in ways that really improve lives.
We are now one of the leading OTC companies in the world, holding strong positions in specialist oral health, pain, skin health and family nutrition. Our portfolio includes such leading brands as Sensodyne, Theraflu, Polident, Nicorette, TUMS and Excedrin. With a heritage of more than 160 years, our brands are successful in more than 100 countries, showing our passion for quality and innovation backed by trusted science.
DSN: And what might we see coming down the pike in terms of switch activity?
McNamara: There is clearly a consumer need for new, differentiated solutions for everyday health issues. This will be a key area of focus for the new GSK Consumer Healthcare.
For example, this spring we completed the RX-to-OTC switch of Flonase Allergy Relief. And to date, it’s been highly successful, driving category growth and offering an estimated 50 million people suffering from allergies a new solution.
By empowering the consumer with more OTC choices like Flonase, it creates an environment where they can manage their health conditions themselves, while also creating an opportunity for drug stores to serve as important educators and partners that help manage these conditions.