Importance of Convergence in the Pharmaceutical Market


In recent years, convergence has been playing a significant role in the growth of the pharmaceutical market and applies to several aspects of the market, including cosmecutical, nutraceutical, veterinary and the over the counter (OTC) markets. The need for convergence is attributed to high competition within the market as well as to the declining economy. These aspects underline the need for collaboration between various sectors which will enable organizations to invest into other lucrative areas.

To date, there are several convergences within this sector and these comprise the convergence of prescription drugs to OTC products and the convergence of food-based products with health and medical products. While convergence is assisting the pharmaceutical industry to develop and expand further, it also presents certain challenges like counterfeiting and the regulatory outlook.  

Combination of Food-based Products with Medical or General Health Benefits  

The combination of food-based products with medical or general health benefits is one form of convergence. The nutraceutical sector includes several top markets, including pharmaceuticals and food and beverage. In 2011, the global nutraceutical market was estimated to be worth $149.5 billion, followed by the US, Europe and Japan, accounting for almost 93% of the global nutraceutical demand.

Leading pharmaceutical companies are challenged with multiple patent expirations and they compensate for such declining pipelines via new revenue streams. However, the nutraceutical, cosmeceutical, veterinary and OTC markets could present an opportunity to increase infrastructure investment.

Issues and Challenges within the Convergence of Health and Food-based Products

Despite being a lucrative combination, several challenges exist within the convergence of health and food-based products. For instance, vast research and development budgets when compared to the functional food and beverage players mean that there are some pharmaceutical firms which are already playing in these sectors with varying levels of success. However, pharmaceutical companies that are venturing into these sectors face certain difficulties. Also, consumer packaged goods companies are highly experienced in developing consumer products and are already dominating the fields with their competitive record of marketing products directly to consumers.

Conversion of Prescription Drugs to OTC Products

The conversion of prescription drugs to OTC products may be one of the biggest opportunities for pharmaceutical companies. Patent expirations combined with an increasing number of pharmaceutical companies drive the market growth in this sector. For common conditions like fungal infections, hay fever, indigestion and other easily treatable illnesses, patients self-prescribe and often rely on their pharmacists as a first point of call for their conditions. Most of the drugs utilized to treat such conditions have a long history in the post-marketing phase, and demonstrate low risk and high efficacy in the OTC market.  

The global OTC market in 2012 was pegged at $104 billion at a Compound Annual Growth Rate (CAGR) of 6.5% from 2006 to 2010. Pfizer and AstraZeneca have recently signed a deal that gives Pfizer future rights to market a non-prescription version of AstraZeneca's blockbuster heartburn drug, Nexium, in 2014. Growth trends are also being observed in the cosmeceutical and nutraceutical sectors.

Challenges within the Convergence of Prescription Drugs to OTC Products

In order to exploit new markets and build strong brands that are consumer friendly, pharmaceutical companies must develop new strategies to set themselves apart from the competition. There have been extensive discussions on how to make a medicine as attractive as possible to the consumer and yet adhere to the GMP packaging requirements. When shifting a product from prescription drugs to OTC, marketing becomes more vital as the purchaser shifts from a physician led patient to a consumer, contributing to a major change in mindset.

Another challenge that exists within this convergence is the problem of counterfeit drugs that enter the supply chain. So far, the pharmaceutical industry has not set up a centralized and regulated database for serialization; however it is completely aware that serialized products is important to ensure the security of the supply chain. These high-value products are most likely to be vulnerable to infiltration by counterfeit products because of the security issues presented by the less secure retail distribution procedures. This is one area where pharmaceutical firms can exert a competitive advantage over their consumer packaged goods competitors. 

New Innovations

Packaging Coordinators, Inc. (PCI) is well positioned to shift products from prescription drugs to OTC and has been involved with a number of high profile convergences.

Anticipating a surge in companies expanding into OTC markets, PCI collaborated with a packaging design company to provide solutions to the challenges related to competitive consumer markets. One of its recent innovations is the pocket pack, which opens in one slide to expose tablets in blisters. It also contains a patient information booklet which ensures that the product is by no means separated from its packaging and important usage guidelines are available whenever the product is used.

Besides ensuring correct usage and patient adherence, these new packaging solutions are consumer-friendly and easily fit into customers’ pocket. Several health care organizations have already used this pocket pack design.  


With multiple patent expirations challenging world-leading pharmaceutical companies, many companies are identifying alternative revenue streams to compensate for declining pipelines. The convergence of prescription drugs to OTC status and the emerging markets for veterinary therapeutics, cosmeceuticals and nutraceuticals present viable opportunities.

Competition is set to increase in these markets and packaging innovation may play a major role in brand owners’ strategies. Combination of innovative packaging designs and strong branding that include compliance and anti-counterfeit measures will enable major pharmaceutical companies to gain a major share of these sectors.

Produced from articles authored by Dr. Sue Miles, UK Site Director, PCI

About Packaging Coordinators, Inc.

Packaging Coordinators, Inc. (PCI) specializes in providing packaging solutions to the global healthcare industries that need to increase their products’ speed to market for commercial success. PCI brings the proven experience that comes with over 50 successful product launches a year and more than 40 years in the healthcare business. Continued investment and leading technology allows PCI to meet global packaging needs throughout the product life cycle - from Phase I clinical trials through commercialization and ongoing supply. PCI’s clients view the company as an extension of their business and a collaborative partner, with the common goal of improving patients’ lives. 

Sponsored Content Policy: publishes articles and related content that may be derived from sources where we have existing commercial relationships, provided such content adds value to the core editorial ethos of News-Medical.Net which is to educate and inform site visitors interested in medical research, science, medical devices and treatments.

Last updated: Sep 16, 2013 at 10:17 PM


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