OTC remedies see growth as consumers turn to self care

6/29/2009

The recession economy has been a constant theme for more than a year now. And while many over-the-counter categories are adversely affected when consumers begin changing their shopping behaviors—becoming more frugal, shopping more on promotion or gravitating in greater numbers toward national-brand equivalents—nonprescription drugs still represent a tough-times strategy to avoid the doctor’s office or to forego filling a more expensive, prescription-only treatment for consumers.

Overall, sales of OTC remedies totaled $28.4 billion across food, drug and mass markets for the 52 weeks ended April 18, according to Nielsen Group scan data, representing slight growth of 1.8% as compared with the same period last year.

According to the Kaiser Family Foundation’s April Health Tracking poll, as economic conditions remain poor, a majority of the public continues to say that they or a member of their household have delayed or skipped health care in the past year. The most common actions taken due to health-care costs were substituting home remedies or OTC drugs for doctor visits; 42% of the 1,203 adults surveyed cited this cost-saving measure.

Overall, 1-in-4 Americans reported that someone in their household has had trouble paying medical bills over the course of the past year. In lower-income households or households without insurance coverage, these problems were even more frequent, suggesting that the strategy to increase OTC utilization as a cost-saving measure may be more prevalent. As many as 46% of those without insurance coverage had difficulty paying medical bills in the past year, and 43% of those earning less than $30,000 per year faced similar difficulties.

And it’s not only debt-challenged consumers who are looking for cost savings in the self-care aisle. Health-care payers are driving their covered customers down that aisle as well, in an effort to better control ballooning healthcare costs on their ends. According to a CVS/Caremark poll of its employer clients, 29% of plan sponsors stated an interest in promoting OTC medications in favor of a branded or generic prescription in classes where that option is available, David Joyner, CVS/Caremark EVP sales and account services, told analysts last month.

“Given this growing demand, we rolled out the ExtraCare health card program to more than 250 clients covering more than 8 million cardholders,” he said. “Savings for the plan participants have exceeded $25 million since implementation, so this is a very important part of both increasing benefits, increasing client satisfaction and also helping our clients reduce their overall costs.”

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