Kline Group projects 2.6% CAGR of OTC medicines through 2020

PARSIPPANY, N.J. - Kline Group last week projected the business of OTC medicines would realize a compound annual growth rate of 2.6% through 2020 as part of its webinar outlining how supplier cost structures are changing across the 11 leading OTC suppliers within a dynamic market.

Kline examined the impact of many OTC market forces as part of its latest report "OTC Drugs: U.S. Competitor Cost Structures."



Currently, total OTC sales are up 4.2% to $25.6 billion in 2015 as compared to year-ago results, noted Laura Mahecha, Kline Group healthcare industry expert. "Overall, the [OTC] market had a strong year," she said. "Some of the trends in 2015 that helped the [OTC] market sustain strong growth were strong performance of several Rx-to-OTC switches," she said, such as intranasal steroids like GSK Consumer Healthcare's Flonase and Pfizer's Nexium 24HR proton pump inhibitor.



"[And] we are seeing the market reaping the benefits of some industry consolidation. The Bayer and Merck merger was compete and so those brands received very strong support and growth," Mahecha added. "And also the strong return to market of recalled brands from companies like Johnson & Johnson and Novartis -  those all had steady supply and returned with strong growth rates in 2015."



Additional market consolidation is expected to continue to contribute to a strong growth trajectory, Mahecha said, as that consolidation typically translates into additional resources placed behind leading OTC brands.



Switch will also continue to be a growth factor, Mahecha said. Presently, there are indications that a dermatology switch addressing conditions such as acne may be on the horizon. Other categories that may field a game-changing Rx-to-OTC switch brand include topical analgesics, erectile dysfunction and sleep, Mahecha said.