As the year 2010 begins, Euromonitor reflects on healthy lifestyles as important contributors to the future performance of OTC healthcare.
Governments to carefully manage their health expenditure budgets in years to come
Public health policy is anticipated to become the focal point in many countries. Not only governments need to prepare for future pandemics, but also have to adopt basic measures to face a higher prevalence of chronic diseases threatening to deplete their already diluted healthcare budgets. Treatments for chronic diseases rise amid high costs of drugs, health practitioners and home care.
The challenge is how to deal with an increasing number of people demanding accessible long-term medical care. The Human Development Report 2009 published by the United Nations lists Norway, Australia, Iceland, Canada, Ireland and The Netherlands as the countries with the highest government expenditure on health. For the majority of these countries, this expenditure will continue to rise due to an ageing population.
The National Health Expenditures (NHE) in the US will represent an estimated 20% of the GDP in 2018, up two percentage points from 2009 according to the US Department of Health & Human Services. In Australia, government health expenditure is anticipated to be slightly above 4% in 2010 according to the Department of Finance and Administration.
Similarly, an excerpt from the “Population ageing and government health expenditure” published by The Treasury of New Zealand states that “The average 30-year-old New Zealand male currently receives about $900 of health care per year from the government health care system; the average 90-year-old male receives about $16,000 of care. The number of 30-year-old males is likely to increase by about 20% over the next 25 years, while the number of 90-year-old males will increase by 150%. The apparent implication of such numbers is that population ageing is about to put substantial upward pressures on government health expenditures.”
Consumers forced to take a more proactive approach on their health
As financially-strapped governments seek ways to cut their costs, there is a rising speculation that they will move quickly into setting up comprehensive health education programmes to teach people on how to achieve a healthy lifestyle within their reach. Nutritional deficiencies, unhealthy diets and sedentary lives continue to add up cases of obesity and chronic disease across the globe. Many governments face difficulties carrying the financial burden of providing an acceptable medical care to cover even the most pressing health necessities of their citizens.
But the time has come for people to begin taking control of their health with adequate disease prevention goals. Bad habits of tobacco smoking, alcohol consumption and unhealthy diets, the major culprits for the rapid rise of chronic diseases, will be discouraged at even faster rates. This may sound as not so good news for the tobacco and alcohol drinks industries, yet moderation in alcohol and indulgent food consumption can remain as a feasible option since many people will not give them up easily.
Health education now becomes a pivotal force in a government’s efforts to reduce healthcare costs. Education needs to start with children and teenagers, the most vulnerable population likely to embrace unhealthy junk food and sedentary habits of watching television or playing video games for long periods of time.
Adults also need their good share on health education. They need to be reminded on how tobacco, alcohol and fatty foods are bad for them. Long-time habits are hard to break, but not impossible to change one step at a time.
In the UK the Department of Health manages the campaigns “5 a day” to promote healthy diets, along with the new “Let’s Get Moving (LGM)” public health campaign to motivate people in physical activity. The Department of Health and Ageing in Australia implemented comprehensive public health campaigns including “Get Set 4 Life” aimed at children and “Agedcare Australia” for the elderly people. Alternatively, Health Canada put into practice the “It’s Your Health (IYH)” programme to promote health and good nutrition to Canadians. The Japanese Ministry of Health, Labour and Welfare (MHLW) just extended its national health campaign “Kenko Nippon 21” to support health through good nutrition, diet, exercise and smoking cessation. Lastly, Indian local authorities sponsored the “No Toilet, No Bride” campaign as an effort to curb diseases stemming from lack of sanitation in Northern India.
The OTC industry will support healthy lifestyles
Health education campaigns will not only rely on governments, but also on the industries it affects. In the case of the OTC industry, a governmental push for people assuming responsibility on their health could translate into brighter prospects for self-care and self-medication. Governments spend precious financial resources to treat minor ailments not immediately requiring a visit to a health practitioner, and that could be easily treated at home.
At this point is when OTC companies can build a marketing strategy based on health tips on how to treat minor ailments or prevent chronic diseases, in combination with an adequate array of products readily accessible. Social media will become one of the most important advertising venues used by the industry to educate young people on healthy lifestyles and products to help achieve well-being. Euromonitor will analyze marketing and advertising trends in OTC healthcare in an upcoming article.
Retail sales of vitamins and dietary supplements will keep growing with the support of public health initiatives on nutrition, health and wellness. Euromonitor projects constant retail sales topping US$76 billion at the end of 2014. The governments want to see more people healthy, and the industry will contribute and benefit from this. Leading a healthy lifestyle implies paying special attention to nutrition requirements and holistic approaches using herbal/traditional products. In spite of upcoming stricter regulation on
vitamins and dietary supplements in regions like Western Europe, North America and Asia, this will not prevent people from complementing their diets with these products.
In 2006, the Council for Responsible Nutrition (CRN), a US-based trade group representing leading companies in vitamins and dietary supplements, introduced the “Life…Supplemented” campaign to help Americans achieve a healthy lifestyle. The programme includes a combination of a healthy diet, supplements and exercise. In 2010 CRN just joined forces with Vitamin Angels, a global non-profit organization, to supply vitamins and dietary supplements to impoverished people in several developing countries. So the future reach of these companies not only includes the US, but also other countries that could eventually help support future sales growth. This is a good example on how the industry takes a leading and proactive approach to promote their products, and indirectly supports public health policy.
The Consumer Health 2010 edition to be published next week will provide an insight into the latest trends shaping the OTC healthcare industry.