31 January 2006

Kenya: Battle for Kenya's 1.3bn Pain Relief Drugs Market Hots Up

Nairobi — Walk into any pharmacy or supermarket nowadays and you are greeted by such an array of pain relieving drugs on the shelf that it could, ironically, give you a headache.

The Kenyan market for over-the-counter (OTC) analgesics that can be bought from kiosks, groceries and supermarkets is worth about Sh1.3 billion and has been growing at about 14 per cent annually.

The lion's share of the market - 52 per cent - is controlled by GlaxoSmithKline (GSK). The UK-based multinational makes Panadol and Hedex, two of the biggest selling OTC drugs in Kenya. The rest is divided up between an assortment of locally produced and imported brands as well as generic versions.

Despite GSK's dominance, and their recent release of a new product described as the strongest OTC painkiller in the market, some local companies are taking careful aim at the market leader, using marketing tactics and local know-how to win away customers. Analgesics include all pain-relieving drugs, from powerfully addictive opiates like morphine to the milder non-opioids that are sold over-the-counter in Kenya and elsewhere.

Worldwide, the OTC pain relief market has been estimated at over US$30 billion (Sh2.1 trillion) and growing. The Kenyan market, buttressed by smaller but likewise growing markets in Tanzania and Uganda, may seem minuscule next to the world OTC business. But the high margins of the cheaply produced products and the ability to sell them virtually anywhere tempts multinationals and local concerns to enter the race.

The most popular analgesic substance in Kenya by far is the paracetamol. Synthesised in the late 19th Century as an alternative to quinine, which was becoming scarce, it relieves pain and fevers without most complications or addictive properties of stronger drugs. It is the active ingredient in Panadol and most other OTC analgesics in the country.

By 2003, there were 16 paracetamol-based OTC drugs in Kenya, some mixed with caffeine or aspirin to make them stronger or quicker acting. Aspirin itself has traditionally been a popular drug in many countries, but its popularity for pain-relief in Kenya has waned since it became associated with bleeding ulcers and other gastro-intestinal problems. It finds its main market in prescription-based blood pressure lowering products.

The Panadol brand dates back 50 years to its first UK release, and it has been known in Kenya nearly as long. GSK Kenyan customer care group product manager Maggie Rarieya says the Panadol family - including regular, extra-strength and fast-acting varieties plus a children's formulation - is their biggest OTC seller. Not content to rest on its laurels, GSK has also sold the stronger Hedex, an APC (containing Aspirin, Paracetamol and Caffeine), for 20 years. And GSK last week launched a 40-per cent stronger Hedex Extra, specially formulated for the Kenyan market. Ms Rarieya says the product was created based on market research showing many Kenyans, especially lower income manual labourers, developed headaches and other work-related pains often but, as breadwinners, most couldn't afford to take time off. "We discovered that consumers still needed a very strong painkiller over the counter without going into prescription analgesics," Ms Rarieya says. But GSK admits that the move was a strategic attempt to grab back the significant chunk of the OTC market for strong analgesics that had been captured by Beta Healthcare Ltd, the Kenyan maker of Action and Mara Moja drugs.

Beta marketing manager Isaac Matalanga says a combination of strong, effective products and "genius marketing" has allowed the company to give GSK a run for its money in the fight for the hard-earned shillings of lower-income and rural Kenyans. At his office in Nairobi's Industrial Area, Mr Matalanga points to a pack of Mara Moja, the Kiswahili word for "instantly". The bright red box is adorned with lightning bolts and the phrase "kama umeme", or like lightning. He says the message is simple, and the focus on speed meets the needs of Kenyan consumers, "Because when you are in pain, what are you looking for? You are looking for immediate relief, not just relief."

Just seven years in the market, Mara Moja has grown faster than any product in its class, says Mr Matalanga. Although Beta would not provide specific figures for sales or market share, even GSK admits that Beta is its primary competition in the branded OTC market. Action, Beta's other major painkiller with a 20-year presence in the market, has operated on the "strongest painkiller" banner, now being challenged by Hedex Extra. Although Action contains 600mg of paracetamol to Hedex Extra's 400mg, the new Hedex adds in 600mg of aspirin and 65mg of caffeine to boost it's strength.

Whichever is the stronger drug, Mr Matalanga is taking the challenge of the new product seriously. "Of course its bound to eat into all the existing brands including Hedex itself," he says, "but what we have to be cautious bout is that it doesn't take much from our lines" In its marketing, Beta has focused on middle-to-lower income earners, which Mr Matalanga points out make up about 80 per cent of Kenyan consumers. Mara Moja and Action sell mainly as individual pairs of tablets at small kiosks or groceries. Mr Matalanga says Beta products are on supermarket shelves more as a form of marketing than for serious sales. "It's something where you dash across to the shop and buy a strip of two until the next time you need it again and make another purchase," he says. "The culture of buying for keeping at home in the medicine cabinet has not really got caught on here."

While Beta and GSK may be the main rivals in the market, other Kenyan companies are also trying to get in on the pain relief action. One is Dawa Pharmaceuticals. Its OTC analgesic, Dawanol, was once the market leader, according to sales and marketing head Pawan Baghel. But during the 10 years the company spent in receivership, the analgesic was largely ignored while upstarts like Beta and big players like GSK moved in. Re-launched in January 2005, Dawanol is trying to regain its lost customer base, a process which Baghel admits could take five or six years.

The green-packaged drug has achieved some growth since its re-launch, but remains a bit-player in the market. "I feel when it comes to medicine people go for a brand that has a created image and they don't take a chance particularly with medicine," says Mr Baghel, of the difficulties in winning back customers. With a market of limited size and many players, Mr Baghel says selling OTC painkillers is all about taking share from others, especially GSK and Beta. And Baghel adds that while GSK must struggle to maintain its sales, a "new" arrival like Dawanol can more easily achieve growth in the early years. "They (established brands) should be scared of such companies emerging in . . .. We have nothing to lose."

At Dawa's grounds in Ruaraka, Nairobi, Mr Baghel points to a football pitch, which he says will soon have stands built for a proposed sponsorship plan with soccer team Thika United. He hopes to see games played here by players in shirts adorned with the Dawanol logo, but for now the pitch is brown and empty. In the OTC painkillers market, more than most pharmaceuticals, marketing and promotion are key to success. This likely explains why GSK's plans to market Hedex Extra include large billboards, TV and radio advertising and logos on matatus, flyovers and buildings. Ms Rarieya is even planning a "Headache-Free Month," in February when the company will give away samples of its product.

With so many companies competing for the same market, just where will growth come from in the OTC analgesics sector? Mr Matalanga pins Beta's hope for growth on new products, especially those aiming at niche pain markets. While their current drugs claim to take care of a variety of aches - be they back, tooth or head - target marketing tailor-made drugs, says Mr Matalanga, can open up new sales avenues. The only caution being the danger you might "cannibalise" your own markets, he says. "So to go into such a line you need sufficient study and come up with a strong proposal that can distinguish the brands clearly to the consumer," GlaxoSmithKline's Rarieya cites alternative analgesic forms such as syrups, chewable tablets and creams as being a largely untapped market in Kenya, and its a model that has already found success in South Africa.

An area none of the branded companies seems keen on entering is the generic market. The unbranded pills, bought in large quantities and sold for 50-cents a tablet at dukas and pharmacies, command almost half the OTC market and this appears to be the fastest-growing segment. But Mr Matalanga suggests that getting into generics might erode the carefully-crafted brand image of Mara Moja or Action. "If you build brand equity you want to ride on that, you don't want to go into that (generic) level of marketing," he says. "You want to reap the kind of consumer-base that you have established, you want to exploit that."

GSK concurs on the importance of maintaining brand image. Most customers walk into shops and ask for Panadol, not paracetamol, Ms Rarieya says. However, she some pharmacists substitute the generic version at the counter, even when asked for a brand name. When contacted, several Nairobi chemists denied substituting generic painkillers, but at least one added that some customers "mean" they want generics when they ask for Panadol and so they provide them with the unbranded alternative. GSK is tackling the generic challenge head-on through work with the Kenyan Pharmaceutical Society and "anti-generic" campaigns to alert consumers that "not every paracetamol is Panadol," says Ms Rarieya. Because a lot of the generics that are actually substituted may not meet the quality standards that are recommended." The move towards seeking OTC painkillers, although hardly new, has some doctors worried.

Concerns over the potential side effects of analgesic misuse or overdose led the Kenya Medical Association (KMA) to draft specific guidelines on their sale and use in 2003. Aspirin's gastro-intestinal issues are known, and there is also the possibility of liver toxicity and death following paracetamol overdose, but it would require ingesting dozens of tablets at once. The published OTC guidelines are available to pharmacists but were never adopted into law, contrary to the hopes of their authors. And the current National Chairman of the KMA, Dr Stephen Ochiel, says that without stiffer guidelines, the proliferation of OTC drugs could be bad for Kenyans in the long run.

"A patient going and asking for a given drug only looks at one aspect of a headache and want Aspirin or Panadol, but the cause of the pain is not defined," he says, adding that many pharmacists and shop-owners are usurping doctors' role in assessing a patient's condition and requirements. And the trend of stronger painkillers like Hedex Extra, with concentrations of caffeine, Aspirin and paracetamol than anything on the Kenyan OTC market, is worrying too, says Dr, Ochiel. "The stronger it is the more it should be not available over the counter, it should be left as a prescription drug because you are approaching the limits of safety."

GSK's medical marketing manager Dr Githinji Gitahi maintains that the ingredients in Hedex Extra are "all within the recommended levels." And Ms Rarieya adds that GSK is active in ensuring dosage instructions appear in English and Kiswahili on every pack. The company also works with pharmacists and shop-owners to help them understand the product they are selling. Ms Rarieya says the local OTC market has grown as Kenyans have become more proactive about their health. Headaches and period pains might not belong in the same category as terminal illnesses, she says that public awareness about diseases like HIV/Aids has helped "push people to take steps towards their own health."

Copyright © 2006 The Nation. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.