Rx-to-OTC Switching: Market Issues & Strategies

This publication has been discontinued on July 19, 2011.

Introduction

The US market for selected over-the-counter (OTC) drugs, at the manufacturer level, has been estimated at over $10 billion. This will increase to approximately $13 billion by 2007.  Growth is expected to come from new switches and increased sales of allergy, cough, cold, and sinus and gastrointestinal products. 

OTC drugs are becoming increasingly important in the US health care system. More than 80 therapeutic categories of OTC drugs are on the market, ranging from acne drugs to weight control products.

 After lumbering along slowly for the past few years, the US market for prescription-to-OTC switches is expected to regain some of the momentum reminiscent of the mid-1990s. This industry guide addresses these market factors and their impact on the success of prescription-to-OTC switches, providing an overview of the top OTC companies and the marketing strategies they use to succeed in the OTC market.  Finally, this guide presents a glimpse into the future with trends and products that will play an important role in how this market will evolve over the next 5-7 years.

 The report's market and strategy review:

• Past switches
• Current switches
• Potential switch drugs and drug categories
• North American market for OTC and switched drugs

 Drug categories reviewed:

• Allergic rhinitis
• Analgesics
• Asthma/respiratory conditions
• Benign prostatic hypertrophy
• Gastroesophageal reflux disease
• Glaucoma
• Hypertension
• Nicotine addiction 
• Osteoporosis

 An essential strategic resource, Theta' s Rx-to-OTC Switching: Market Issues & Strategies includes reviews and analyses of the following topics:

• Trends in the market for prescription-to-OTC switches
• Criteria for successful prescription-to-OTC switches
• Role of healthcare providers and payers in switch successes
• Impact of patent extensions and generic drugs in pharmaceutical marketing Major players and innovators in the OTC industry

Table of Contents

1 Executive Summary 1

1.1 OTC Market Introduction 1

1.2 Scope and Objectives of Report 2

1.3 Methodology of Investigation 3

1.4 Limitations of the Research 4

2 Introduction 5

2.1 Market and Competition Overview 5

2.2 OTC Vs. Prescription: Differentiating Factors 7

2.3 Marketing Theory of Prescription-to-OTC Switching 10

2.3.1 Product Life Cycle Considerations 10

2.3.2 The FDA' s Role and the Example of Allergy Drugs 12

3 Market Dynamics in the Rx-to-OTC Switch 15

3.1 Impact of Aging Population, Healthcare Economics, and Role of Payors 15

3.2 Roles of Pharmacists, Physicians, and Other Healthcare Professionals 19

3.2.1 OTC and Prescription Drug Interactions 19

3.2.2 Influence of Drug Companies and DTC Advertising on Physician Prescribing 20

3.2.3 The Third Drug Tier: Pharmacist Recommendations 22

3.3 Impact of DTC Brand Advertising and Consumer Views 23

3.4 Regulatory Power of the FDA 25

3.5 Patents and Generic Formulations: OTC Potential 28

3.6 Company Marketing Expertise Requirements 29

3.7 Pricing Considerations 31

3.8 OTC Drug Costs: Formulation, Launch, Promotion, Packaging 33

4 Current and Future Drug Switches 37

4.1 Current OTC Drug Classes and Recent Switches 37

4.1.1 Past Seen in Present, Foretells Future 41

4.1.2 Who Really Controls New Switches? 42

4.2 New Classes of OTC Drugs: Dual Status and Pharmacist Recommended 43

4.3 Future Rx-to-OTC Switches 45

4.3.1 Predictive Overview 45

4.3.2 Drugs With Highest Switch Potential 49

4.3.3 Antibiotics 52

4.3.4 Asthma Medications 52

4.3.5 Statins 53

4.3.6 Obesity Drugs 54

4.3.7 Antifungals 55

5 U.S. Market Analysis 57

5.1 Total Market Size and Growth 57

5.2 Allergy, Asthma, Cold, Cough, and Sinus Medications 61

5.3 Analgesics/Pain Relievers 65

5.4 Gastrointestinal Drugs/Heartburn Treatments 67

5.5 Antifungal Agents 74

5.6 Nicotine Replacement/Smoking Cessation Products 75

5.7 Hair Growth Stimulants 78

5.8 Competitor Analysis 79

6 Case Studies 85

6.1 AstraZeneca's Prilosec OTC Challenge 85

6.2 Pepcid and H2 Antagonists: Finding OTC Life After Rx 87

List of Tables

Table 4-1 Number of U.S. Rx-to-OTC Drug Switches 1990-2003 38

Table 4-2 Selected Major Rx-to-OTC Switched Drugs 1990-2003 40

Table 4-3 Patent Expiries and U.S. Sales of Major Prescription Drugs 48

Table 4-4 OTC Switch Potential of Major Prescription Drugs 51

Table 5-1 U.S. Market Size and Growth for Major OTC Drugs by Type 2002, 2007 59

Table 5-2 U.S. Market Size and Growth for OTC Allergy Drugs by Type 2002, 2007 63

Table 5-3 U.S. Market Size and Growth for OTC Gastrointestinal Drugs by Type 2002, 2007 68

Table 5-4 U.S. Market Size for OTC H2 Antagonist Drugs by Brand 2002 72

Table 5-5 U.S. Market Size and Share for OTC Nicotine Replacement Drugs by Brand/Type 2002 76

Table 5-6 U.S. OTC Drug Market Size and Share by Manufacturer 2002 83

List of Figures

Figure 4-1 Number of U.S. Rx-to-OTC Drug Switches 1990-2003 39

Figure 5-1 U.S. Market Size for Major OTC Drugs by Type 2002, 2007 60

Figure 5-2 U.S. Market Size for OTC Allergy Drugs by Type 2002, 2007 64

Figure 5-3 U.S. Market Size for OTC Gastrointestinal Drugs by Type 2002, 2007 69

Figure 5-4 U.S. Market Size for OTC H2 Antagonist Drugs by Brand 2002 73

Figure 5-5 U.S. Market Size for OTC Nicotine Replacement Drugs by Brand/Type 2002 77

Figure 5-6 U.S. OTC Drug Market Size and Share by Manufacturer 2002 84

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