Pharma majors cash in on demand for OTC drugs to diversify their revenue streams

Typically, OTC drugs are those that are allowed to be sold without a doctor’s prescription. Countries like the UK , the US, and Australia have clear guidelines for the sale of OTC drugs, but India lacks such regulations. In 2022, India approved a new OTC drug policy, but it was not implemented. The Indian government, in a bid to reduce treatment cost and promote self-care without compromising on safety, set up a committee last year to formulate a fresh OTC drug policy for India.

The Indian OTC drugs market is projected to grow from approximately Rs 55,600 crore in 2024 to Rs 72,800 crore by 2029, at a compound annual growth rate (CAGR) of 5.39%, according to Mordor Intelligence, a market research and advisory firm.

“While self-medication is often seen as convenient and cost-effective, it carries serious risks, such as adverse reactions, dangerous drug interactions, and the worsening of undiagnosed conditions,” Dr Ajay Agarwal, Senior Director of Internal Medicine, Fortis Hospital, Noida, tells Business Today.

Rising OTC drug sales have raised concerns over anti-microbial resistance of medicines. Medicines, including antibiotics, are available easily without prescriptions. “Antibiotics are among the most misused drugs… The misuse of antibiotics contributes to antimicrobial resistance, a global health crisis,” Agarwal says.

Despite health concerns, the increasing popularity of OTC drugs has led to pharma majors seizing the chance to diversify their revenue streams.

WHAT THE LEADERS ARE DOING

LupinLife, consumer healthcare division of pharma giant Lupin, is refining its portfolio and market strategy to meet the changing needs of health-conscious consumers. “Our focus has been on key OTC categories such as gastrointestinal health, vitamins and supplements, with a strong emphasis on women’s and children’s health,” says Anil V. Kaushal, Head of LupinLife Consumer Healthcare. “Staying attuned to the voice of the consumer and leveraging Lupin’s legacy in healthcare, we aim to build enduring trust in the consumer health market,” Kaushal says.

Building on Lupin’s legacy in prescription drugs, the division is aiming to leverage its established trust in the consumer health market. Recent product launches like Softovac Liqui-Fibre, an ayurvedic bowel regulator, is a new take on the liquid laxative category.

Another long-established player in the prescription drug market, Glenmark Pharmaceuticals, is also expanding its portfolio of wellness products. It aims to capture a significant share of the wellness market. “We are improving access to our established OTC brands such as Candid, La Shield (a sunscreen range), and Scalpe,” Alok Malik, President and Business Head–India Formulations at Glenmark Pharmaceuticals Ltd, says.

The German pharmaceutical major, Bayer, is also expanding its consumer health and OTC portfolios. “Over recent years, Bayer has expanded its consumer health and OTC portfolio to meet the evolving needs of the market,” Sandeep Verma, Country Head for India, Bangladesh, and Sri Lanka at Bayer’s Consumer Health Division, says. He says that the company is capitalising on the increasing consumer preference for self-care products.

PERSONAL HEALTH, NEW KID on THE BLOCK

The popularity of social media platforms like Instagram and the boom in the digital marketing ecosystem have increased access to information. The rising popularity of skincare and personal health has led to an increase in demand for easy access of dermatological products. From direct-to-consumer brands to established players, everyone is looking to take a bite into the pie. Glenmark is leveraging its prescription portfolio, particularly in areas such as respiratory, dermatology, and pain management, to build its OTC offerings. Recent product launches in the La Shield range, which includes a sports-specific sunscreen, and Scalpe+ Anti-Dandruff Shampoo, are examples of the company’s efforts to cater to changing consumer needs. “These launches enhance our presence in the consumer health space,” Malik says.

The increasing popularity of personal care products is not limited to urban areas alone. “Companies say that there are significant opportunities in smaller markets across Tier II and Tier III cities, where significant opportunities lie,” says Achin Gupta, Global Chief Operating Officer at Cipla Limited. He adds that the company is tapping into the increasing consumer demand for self-care and preventive health solutions through targeted launches like its skincare brand Rivela Dermascience and WHO-approved oral rehydration salt formulation Prolyte ORS.

FITNESS AND NUTRITION

Companies like Cipla, Mankind Pharma, and Zydus Lifesciences are the leading players in India’s consumer healthcare and OTC markets. “Their wide network presence, led by a large field force and successful brand recognition among medical professionals and patients, have helped them grow in the consumer and OTC segments,” Tausif Shaikh, India Analyst in Pharma and Healthcare at BNP Paribas, says.

Apart from skincare, another area where there is increased consumer interest is nutrition and fitness. Post Covid-19, there has been a rise in awareness about leading a healthy lifestyle. Internet and social media have made it easy to access knowledge sources on micro-nutrients and balanced diets. The focus on physical fitness has also led to an increase in demand for pain relief drugs. Companies are tapping into these categories to cater to the changing needs of consumers.

“LupinLife’s commitment to science-backed, consumer-centric solutions is also reflected in brands like Corcium (a coral calcium and D3 supplement), and VimPro (a dietary protein, vitamin and mineral supplement), catering to the rising demand for nutraceuticals and fitness supplements,” Lupin’s Kaushal says.  

The global nutraceuticals market is projected to grow at a 7.8% CAGR from 2023 to 2030, reaching a valuation of approximately $650 billion by 2030, while the Indian market is expanding at a double-digit CAGR, according to market research platforms Grand View Research and Market Research Future. In FY24, Cipla Health Ltd (CHL), a wholly-owned subsidiary of Cipla, crossed Rs 1,000 crore in revenue, driven by its presence in key wellness segments, including soar throat and cough relief, pain recovery, and nicotine replacement therapy. These product categories played a significant role in the company’s overall performance. CHL also acquired the brand Endura Mass, designed to address consumer needs for weight gain and muscle building. In keeping with the trend, Bayer’s consumer health division has also grown significantly in recent years. In the third quarter of 2024, sales increased by 5.7% (foreign exchange and portfolio adjusted) to €1,413 million, (approximately Rs 12,770 crore). Bayer’s product offerings, including Saridon Woman, Saridon Head & Body, and Bepanthen, aim to address common health issues like menstrual pain and skincare. Supradyn, a multivitamin, is designed to combat fatigue.

“With 96% of Indians acknowledging a lack of essential micronutrients, Supradyn is designed to provide the energy boost needed,” Verma of Bayer says.

However, doctors are uneasy about the increased consumption of these drugs. “While OTC multivitamins are commonly used, taking them without professional guidance can be problematic. Many individuals opt for them for preventive purposes without understanding the proper dosage or potential interactions with other medications,” says Dr. Ajay Agarwal. “The overuse of these supplements can lead to unnecessary health risks, particularly when used in combination with other treatments without consulting a healthcare professional,” he says.

ALL SUNSHINE?

India’s OTC drug market is facing significant regulatory challenges in the absence of a formal legal framework for these widely used medications ranging from paracetamol tablets to cough suppressants. Fewer regulatory constraints allow companies to respond to changing habits, quicker. “There is a trend towards preventive health, and we have aligned our strategy to meet the demand for self-care products,” Joy Chatterjee, Vice President of Sales and Marketing at Mankind Pharma, says.

While prescription drugs are clearly categorised under specific schedules in the Drugs Rules, 1945, OTC drugs remain undefined. This has led to uncertainty in their manufacturing, marketing and sale, creating confusion within the industry. Although discussions have taken place within the Drugs Consultative Committee (DCC) and the Drugs Technical Advisory Board (DTAB), progress has been slow. Experts believe that a well-defined regulatory framework could ease the burden on India’s healthcare system, reduce out-of-pocket expenses for patients and encourage responsible self-medication practices. While nutrition and personal health seem appealing as categories, these segments are already saturated.

“Nutritional supplements, pain, and gastrointestinal categories are also appealing, but seem well penetrated,” Vishal Manchanda, Senior Vice President–Institutional Research at Systematix, says. Challenges in entering such markets include tackling varying regulatory requirements, facing strong local competition from established players, and raising consumer awareness about OTC products, particularly in regions where trust in such products might be lower.

CONCERNS ABOUT PUBLIC HEALTH

In addition to the regulatory and market saturation challenges, the OTC sector in India faces several other issues. A key concern flagged by the Central Drugs Standard Control Organisation (CDSCO) is the lack of consistency in quality control standards, which can lead to variations in the potency and safety of products. According to doctors Business Today spoke with, many OTC drugs, including supplements, are not subject to the same clinical trials as prescription medications, raising questions about their effectiveness and potential side effects.

The rise of self-medication also brings risks of misuse and overuse, contributing to concerns about antibiotic resistance, adverse drug reactions, and long-term health consequences. Another challenge is the fragmented distribution network, particularly in rural areas, where access to genuine OTC products is limited.

These factors, along with a lack of consumer education, create complexities for both manufacturers and consumers, making it difficult for the sector to develop responsibly. From a public health perspective, many drugs marketed as non-prescription fall in the grey area, leading to inconsistencies in how they are sold and used. Industry associations and pharmacists have long advocated for the creation of a separate category for OTC drugs, which could include an approved list of OTC ingredients and clear guidelines for fixed dose combinations.

“A study in the Journal of Pharmaceutical Research found that 74.2% of respondents used OTC multivitamins, and 57.1% did so without consulting healthcare professionals. Worryingly, 45.6% took these supplements for preventive purposes, even when no medical condition warranted their use,” Dr Agarwal says. Experts believe that public awareness campaigns should highlight the dangers of self-medication, emphasising the importance of professional medical advice. 

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