OTC Categories Show Mixed Results in 2004

MAY 01, 2005
Barbara Sax

It was an uneventful year for most OTC categories in 2004. Most segments were flat or down in drugstores, according to data from Information Resources Inc (IRI). "There wasn't much to trumpet in the OTC market," said Steven Heffner, acquisitions editor of Kalorama Information, a division of MarketResearch.com Inc.

It also was a year without any significant Rx-to-OTC switches. "The absence of a Claritin [loratadine] or Prilosec [omeprazole] had an impact on sales," said Kyle Lentz, health and beauty aids industry analyst for Hamacher Resource Group. Although there were no new switches for 2004, the previous year's switched-status products powered their categories.

"Prilosec products currently rank 1, 2, and 3 in the antacid/laxative category," said Lentz. "Claritin has 10 items in the top 30 within our cough and cold department." In fact, Prilosec is the main reason that gastrointestinal products were one of the fastest-growing categories in 2004. Drugstore dollar sales for the segment reached $784.3 million for the 52 weeks ending December 26, 2004, according to IRI—an increase of more than 10% over the previous year's sales.

"The biggest news in that category was that the proton pump inhibitor Prilosec OTC had its first full year on the market," said Kalorama's Heffner. "Prilosec severely impacted the sales of the previous OTC entrants in the category, the H2 [histamine2] receptor antagonists Tagamet [cimetidine], Zantac [ranitidine], Pepcid [famotidine], and Axid [nizatidine]. Those products are expected to continue losing ground at about 9% for the next 4 or 5 years." Heffner said that estimates of Prilosec OTC's 2004 performance approach $400 million.

Cold/allergy and sinus products had a level year, with dollar sales up by only 1.7% to $914.2 million in drugstores, according to IRI. Claritin continued to grab share in the allergy segment of the category.

Two of the biggest new drivers in the cough/cold category were Mucinex and Humibid, expectorants containing guaifenesin that both received approval from the FDA as OTC items in 2004. "The entrance of Mucinex is a main driver in growth in the cough and cold category," said Hamacher's Lentz. "Both products are doing exceptionally well in the cough and cold category. The Mucinex products (expectorant Tab 40 and 20) currently rank in the top 100 of the Hamacher file. Humibid, which was released in November 2004, is just starting to register sales through IRI. This just proves how new products drive sales in HBC [health and beauty care]."

Other new products lent some excitement to otherwise lackluster OTC categories. Tylenol Night Time Severe Cold & Flu and Tylenol Cold & Flu with Cool Burst proved that manufacturers still have plenty of new ways to market the category to consumers. Tylenol and Advil also introduced sinus/allergy line extensions, further segmenting the category. Wyeth's Robitussin Cough Gels gave consumers another choice of formulation in the cough segment of the category.

Testing kits had some growth in 2004. Although IRI's figures show dollar sales of glucose-testing kits lagging, other sources said that 2004 was a good year for the category.

"Home diagnostic kits had double-digit growth, which came from the sale of strips as well as meters," said Laura Mahecha, an analyst for Kline & Co. "That trend should continue as more people are diagnosed with diabetes, bringing new users to the category." Some of the significant new introductions to the category were Bayer's Ascencia Contour Kit and Ascencia Microfill Strips and Thera-Sense's FreeStyle Flash Monitoring System.

Other testing kits, however, showed huge increases in the drug channel this past year. Two new menopause-testing kits, Amerifit Nutrition's Estroven Menopause Monitor and Synova Healthcare's Menocheck, had strong sales at drugstores in 2004, according to IRI. "Estroven supplements are doing very well, so the test kit is a natural extension," said Mahecha. "As baby boomers age, the market for these kits will expand, so it will be a growing segment." Mahecha said that ovulationtest kits should continue to see growth, as more women delay having children until later in life.

Industry experts say that cholesterol-testing kits are another segment to watch in the coming year. "If the FDA approves switched status for Mevacor [lovastatin], we should expect to see a surge in sales of cholesterol home testing kits," said Mahecha.

Sales of internal analgesics were down by nearly 5% in 2004—a trend that was not helped by some bad press surrounding the prescription pain relievers Vioxx [rofecoxib] and Bextra [valdecoxib].

Consumer dissatisfaction with internal analgesics led to a surge in sales of external analgesic rubs and wraps. According to IRI, dollar sales of external analgesics were up by 2.6% in drugstores. "External analgesics are expected to be a major category in terms of growth in market share, with an estimated 10% share in 2004," said Kalorama's Heffner.

First aid accessories sales were up by 3.9% to $557.3 million in drugstores last year. Claritin's line extension Claritin Hives Relief had an impact on the category, as did Band-Aid Anti-Itch Gel. NexCare also had a significant new introduction with NexCare Liquid Bandage Drops.

Ms. Sax is a freelance writer based in Ridgewood, NJ.

Editor's Note: The "OTC Products 2005 Survey of Pharmacist Recommendations" Supplement appears on the Pharmacy Times Web site. Go to www.pharmacytimes.com.