Nasal switches ring up incremental sales

3/4/2015

Chattem’s launch of the first nasal corticosteroid onto OTC shelves represented the most significant success story in the cough-cold-allergy space in the past year. The well-executed launch about a year ago featured a literal “shelf talker” — a battery-powered, on-demand video screen merchandised alongside the new product. And the amount of truly incremental sales Nasacort Allergy 24HR contributed to the category was $130 million for the 52 weeks ended Dec. 28 across total U.S. multi-outlet, according to IRI. Today, it’s the No. 5 allergy remedy, and 3-of-the-4 allergy remedies with more sales than Nasacort still experienced growth in the past year, so there was little cannibalization.



And now a second nasal corticosteroid is coming to market: GlaxoSmithKline’s Flonase. Considering that Chattem is only in year two of its Nasacort launch plan, and the fact that GSK in its own right has a strong heritage successfully shepherding switches to the self-care aisle, overall allergy sales are expected to continue on a sharp upward trajectory. “Based on other types of switch dynamics, in general it’s highly incremental to the category,” noted Kurt Jetta, TABS Group CEO. “It usually takes a 10% to 20% chunk from the existing companies, [but] much of that can be mitigated if they dial up the promotional activity. Overall, for retailers it’s going to be a pretty major [lift],” he said, suggesting that like Nasacort, Flonase should realize well over $100 million in first-year sales.


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