OTC market sees whirlwind activity
“Much has occurred during the course of the last 12 months that affected the makers of over-the-counter medicines and nutritional supplements, as well as the consumers who use their products,” opens the 2007 annual report of the Consumer Healthcare Products Association, pointing to the Food and Drug Administration’s publication of the dietary supplement good manufacturing practices, the approval of GlaxoSmithKline’s weight-loss remedy Alli for sale over the counter and the Senate introduction of the first-ever National Medicine Abuse Awareness Month (August) as three highlighted examples of some of the more significant events that unfurled last year.
The switch of Alli was perhaps the biggest sales success story last year—taking the No. 1 diet-aid tablet spot with a brand that generated $118.9 million across food, drug and mass (minus Wal-Mart) for the 52 weeks ended Jan. 27, according to Information Resources Inc. data. What’s really significant about that sales success is that Alli branded sales represent 32 weeks of data versus a 52-week period for all the other diet aids.
But not only is the Alli story a great sales testimony, it also represents another significant step forward in the switch paradigm. “There are [opportunities] out there that are a product-plus-program, where the information surrounding that product becomes just as important as the product,” noted David Spangler, CHPA senior vice president of policy and international affairs, adding smoking cessation and the emergency contraceptive Plan B as Rx-to-OTC candidates for which marketing programs played a significant part in the switch decision.
The implementation of dietary supplement GMPs, which begins in earnest with the larger dietary supplement manufacturers this summer, is expected to boost confidence in the category, if, that is, the FDA is perceived as adequately enforcing those GMPs, Spangler said in response to whether the regulatory agency has enough funding to adequately assume such new responsibilities as overseeing GMP implementation. “You do see an agency under stress, that needs help in funding,” Spangler said. And it’s a concern for all food- and healthcare-related businesses regulated by the agency. “That’s why we’re a part of the Coalition for a Stronger FDA—to get the FDA the resources and help it needs.”
The dietary supplement GMPs, along with the recently passed serious adverse event reporting law, are “another pillar to help shore up consumer confidence,” Spangler said, stressing that CHPA’s member companies are more concerned about living up to the consumer’s expectations with regard to safety and efficacy than anything else.
Indeed, CHPA has decisively responded to the question of how to address abuse of nonprescription and prescription medications by teenagers. In addition to several grass-roots awareness-raising initiatives, the association advocated for, and won, the naming of August as “Abuse Awareness Month” on Capitol Hill, as Congress made it official last year.
Fastest-growing brands by incremental dollar volume| Brand | Dollars (in millions) |
| Alli | $118.90 |
| Mirolax | 43.1 |
| Alcon Opti-Free Replenish | 36.9 |
| Category | Dollars (in millions) |
| Supplements | $96.7 |
| Cold/allergy/sinus tablets | 87.5 |
| Weight-control tablets | 79.4 |
And while these are three positive developments, the business of OTCs has faced its challenges in the past year as well, particularly among cough-cold purveyors with questions of safety and efficacy targeting children’s cough-cold remedies at the beginning of the season, an anemic beginning to that season and possible state legislation, at least in Oklahoma, that would place products containing dextromethorphan alongside pseudoephedrine products behind the pharmacy counter.
Even so, sales of cough-cold products through Jan. 27 still dominated sales of all OTC categories, with $2.2 billion across food, drug and mass (minus Wal-Mart) channels, according to Information Resources Inc. And despite all the raging debates over kids cough-cold, the slow start to cold- and flu-like illnesses and the-little-more-subdued talk of dextromethorphan, the category’s still growing by 4.1 percent, generating $87.5 million in incremental revenue. And that incremental revenue was only surpassed by the growing sale of supplements, which includes NBTY’s Nature’s Bounty and Pharmavite’s Nature’s Made broadlines, as well as NBTY’s Osteo-Bi-Flex glucosamine/chondroitin brand. Overall, supplements generated $96.7 million in incremental revenue.
Prilosec OTC, Advil and Tylenol topped the charts in dollar volume, but it was GlaxoSmithKline’s introduction of Alli and Schering-Plough’s launch of Mirolax that generated the most incremental income through 2007, with $118.9 million and $43.1 million in incremental dollars, respectively. And Alcon certainly was the benefactor of recalls from both Bausch & Lomb and Advanced Medical Optics in the past two years—the company’s Alcon Opti Free Replenish generated $36.9 million in incremental revenue and was the only established product to make the top three list of fastest-growing brands through Jan. 27.