Management Report
2.4 Products, Distribution and Markets
Marketing activities within the Bayer Group are decentralized due to the diversified business portfolio.
HealthCare
HealthCare supplies more than 20,000 articles to meet the needs of patients and consumers in the various markets. The high number is due to the breadth of the product range and the various delivery forms, dosages, pack sizes, and language versions of individual products and their packaging.
The Pharmaceuticals segment supplies prescription products in the areas of women’s health care, general medicine and specialty medicine. In the field of medicines usually prescribed by general practitioners (General Medicine), we supply products such as Adalat™ to treat high blood pressure and coronary heart disease, and Avalox™/Avelox™ to treat certain infectious diseases. Our product portfolio in Women’s Healthcare encompasses contraceptive products such as YAZ™/Yasmin™/Yasminelle™ and Mirena™, and hormone replacement therapies such as Angeliq™. Our range of Specialty Medicine products, which are mainly prescribed by specialist physicians, includes the multiple sclerosis drug Betaferon™/Betaseron™, the hemophilia A therapy Kogenate™, and Nexavar™ to treat certain types of cancer. Our contrast agents for diagnostic imaging include Ultravist™, Magnevist™ and Gadovist™. In the pharmaceuticals market we are among the world’s top 15 companies in terms of sales.
Our pharmaceutical products are primarily distributed through wholesalers, pharmacies and hospitals. Co-promotion and co-marketing agreements serve to optimize our distribution network. For example, the agreement with Johnson & Johnson subsidiary Ortho-McNeil concerning the joint further development and marketing of the anticoagulant Xarelto™ ensures optimum progress in this area, conferring regional marketing rights that enable both partners to share in the product’s expected success. Another example is the strategic alliance with Merck & Co., Inc. (formerly Schering-Plough), United States, under which that company markets selected general medicine products in the United States. On the other hand we co-market Zetia™, a product of Merck & Co., Inc., in Japan.
Our Consumer Health segment chiefly markets non-prescription products. The Consumer Care Division specializes in medicines available without a prescription, also known as over-the-counter (OTC) products. We offer products in most OTC categories, such as the pain relievers Aspirin™ and Aleve™ and the dermatology products Canesten™ and Bepanthen™/Bepanthol™. The product range also includes nutritionals such as Supradyn™, One A Day™, Berocca™ and Redoxon™, antacids and cough-and-cold products. Consumer Care is a leading player in the OTC market. The division also includes prescription dermatology products. While the division’s sales and distribution channels outside Europe are typically supermarket chains, drugstores and other large retailers, pharmacies are the usual distribution channel in Europe.
In the Medical Care Division we offer user-friendly blood glucose monitoring devices such as the single-strip Contour™ system and the multi-strip Breeze™ system. We also market the Contour™ USB meter, which features integrated diabetes management software and direct plug-in to computers, and the A1CNowTM system for determining long-term blood glucose control (A1c). Outside Europe, these products are generally sold to consumers through pharmacies, drugstores, mass merchants, hospitals or wholesalers. In Europe, they are sold mainly through pharmacies. As well as being among the top companies in the market for blood glucose monitoring devices, we are the world’s leading supplier of contrast agent injection systems for diagnostic and therapeutic medical procedures in computed tomography, magnetic resonance imaging and molecular imaging, and of mechanical systems for removing thrombi from blood vessels. We also offer service products for these systems. Our products are marketed to cardiologists, radiologists and vascular surgeons in hospitals and out-patient clinical sites through a global direct sales organization, supplemented in some cases by local distributors.
The Animal Health Division focuses on the health of companion animals and livestock, for which we offer pharmaceuticals and grooming products. The largest product line comprises Advantix™ and Advantage™ for the prevention and treatment of flea infestation in dogs and cats, followed by Baytril™ for the control of infectious diseases, Drontal™ and Drontal™ Plus wormers, and Baycox™ to treat coccidiosis in pigs. We occupy leading positions in individual countries and product segments, and are the world’s fourth-largest animal health company in terms of sales. Depending on local regulatory frameworks, animal health products may be available to end users as prescribed by a veterinarian or prescription-free from veterinarians, pharmacies or retail stores.
CropScience
CropScience offers a potent range of products and services in the areas of chemical crop protection, non-agricultural pest and weed control, seed breeding and plant traits. These are commercialized according to local market conditions. Our business is subject to the growing seasons for the relevant crops and the resulting sales cycles.
The Crop Protection business is based on a broad portfolio of highly effective herbicides, fungicides, insecticides and seed treatment products. Thanks to our innovative capability and many years of experience with pest control products, we are the global market leader in the insecticides market. Fungicides prevent or cure diseases caused by fungal infestation that can significantly impair harvest yields and quality. CropScience is the third-leading supplier to the global fungicides market. We occupy second position in the world market for weed control products (herbicides), including plant growth regulators. The Seed Treatment business unit focuses on the use of crop protection active ingredients specially developed for the protection of seeds and seedlings. With our insecticides, fungicides and combination products, we remain among the leading seed treatment suppliers in terms of sales. Our Crop Protection products are marketed either via wholesalers or directly through retailers by means of a two- or three-step distribution system, depending on local market conditions.
The products of our Environmental Science business unit are based on both proprietary and inlicensed crop protection active ingredients and are specially designed for non-agricultural uses. This unit markets plant care products and home and garden brands for consumers along with solutions for professional users in the green industry and the pest and vector control sector. In terms of sales, Bayer is among the world’s leading suppliers of non-agricultural pest control products. The Environmental Science products are marketed through various distribution channels. Our home and garden products are sold to consumers via both wholesalers and specialist retailers. Products for professional users are sold via wholesalers. Much of our business in the vector control field is transacted in response to tendering by government agencies and non-governmental organizations.
In the BioScience business unit, our distribution activities are focused on seed production in the four core crops of cotton, canola, rice and vegetables, where we offer high-quality seed based on our own research and breeding expertise. We have achieved strong market positions in these four crops and are globally represented. Our most important markets are North America for canola seed; North and Latin America, India and southern Europe for cotton seed; and Asia for hybrid rice seed. Our vegetable seed varieties are sold in more than 100 countries throughout the world to farmers, breeders, specialist retailers and the processing industry. Traits developed using modern breeding methods are either incorporated into our own seed varieties or licensed to other seed companies for use in their products.
MaterialScience
One of the largest companies in the global chemical industry, MaterialScience is a leading manufacturer and supplier of precursors for rigid and flexible foams, plastic granules, and raw materials for coatings and adhesives. The subgroup holds leading competitive positions in these product groups in all regional markets. We also manufacture and market plastics sheet and functional films as well as selected inorganic basic chemicals such as chlorine, sodium hydroxide solution, hydrogen, hydrochloric acid and nitric acid. These chemicals serve either as raw materials (such as chlorine) for the manufacture of our products or are generated as byproducts (such as sodium hydroxide solution) and sold to external customers.
Our products are used mainly in the furniture, wood, construction, automotive, electrical/electronics, information technology and communications, chemicals, textile, sports equipment, leisure goods and medical equipment industries. Our polyurethane raw materials, such as diphenylmethane diisocyanate (MDI), toluene diisocyanate (TDI) and polyether, and the polyurethane systems based on them that are offered in the market are used, for example, in the production of mattresses, refrigerator insulations, automotive bumpers and shoe soles. Examples of applications for our polycarbonates, which we market under the Makrolon™, Bayblend™, Makroblend™ and other trademarks, include housings for electrical appliances, CDs/DVDs and car headlamps. The Coatings, Adhesives, Specialties business unit manufactures raw materials for coatings used in the automobile and commercial vehicle industries and for adhesives used in footwear, for example. This business unit also produces films for applications including vehicle speedometers and computer housings.
We market our products mostly through regional and local distribution channels, making increasing use of e-commerce platforms for order processing. We also work with trading houses and local distributors who are responsible for business with small customers. Major customers with global operations are serviced directly by our key account managers.