OTC Categories Show Mixed Results in 2004

Pharmacy Times, Volume 0, 0

It was an uneventful year for most OTC categories in2004. 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," saidSteven Heffner, acquisitions editor of Kalorama Information,a division of MarketResearch.com Inc.

It also was a year without any significant Rx-to-OTCswitches. "The absence of a Claritin [loratadine] or Prilosec[omeprazole] had an impact on sales," said Kyle Lentz,health and beauty aids industry analyst for HamacherResource Group. Although there were no new switches for2004, the previous year's switched-status products poweredtheir categories.

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

"The biggest news in that category was that the protonpump inhibitor Prilosec OTC had its first full year on themarket," said Kalorama's Heffner. "Prilosec severely impactedthe 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 losingground at about 9% for the next 4 or 5 years." Heffner saidthat estimates of Prilosec OTC's 2004 performance approach$400 million.

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

Two of the biggest new drivers in the cough/cold categorywere Mucinex and Humibid, expectorants containingguaifenesin that both received approval from the FDA asOTC items in 2004. "The entrance of Mucinex is a maindriver in growth in the cough and cold category," saidHamacher's Lentz. "Both products are doing exceptionallywell in the cough and coldcategory. The Mucinex products(expectorant Tab 40 and20) currently rank in the top100 of the Hamacher file.Humibid, which was releasedin November 2004, is juststarting to register salesthrough IRI. This just proveshow new products drive salesin HBC [health and beautycare]."

Other new products lentsome excitement to otherwiselackluster OTC categories.Tylenol Night Time SevereCold & Flu and Tylenol Cold &Flu with Cool Burst provedthat manufacturers still haveplenty of new ways to marketthe category to consumers.Tylenol and Advil also introducedsinus/allergy line extensions,further segmenting thecategory. Wyeth's RobitussinCough Gels gave consumersanother choice of formulationin the cough segment of thecategory.

Testing kits had somegrowth in 2004. Although IRI'sfigures show dollar sales of glucose-testing kits lagging, othersources said that 2004 was agood year for the category.

"Home diagnostic kits haddouble-digit growth, whichcame from the sale of strips aswell as meters," said LauraMahecha, an analyst for Kline &Co. "That trend should continueas more people are diagnosed with diabetes, bringing newusers to the category." Some of the significant new introductionsto the category were Bayer's Ascencia Contour Kit andAscencia Microfill Strips and Thera-Sense's FreeStyle Flash Monitoring System.

Other testing kits, however, showedhuge increases in the drug channel thispast year. Two new menopause-testingkits, Amerifit Nutrition's EstrovenMenopause Monitor and SynovaHealthcare's Menocheck, had strongsales at drugstores in 2004, according toIRI. "Estroven supplements are doingvery well, so the test kit is a naturalextension," said Mahecha. "As babyboomers age, the market for these kitswill expand, so it will be a growing segment." Mahecha said that ovulationtestkits should continue to see growth,as more women delay having childrenuntil later in life.

Industry experts say that cholesterol-testingkits are another segment towatch in the coming year. "If the FDAapproves switched status for Mevacor[lovastatin], we should expect to see asurge in sales of cholesterol home testingkits," said Mahecha.

Sales of internal analgesics weredown by nearly 5% in 2004—a trendthat was not helped by some bad presssurrounding the prescription painrelievers Vioxx [rofecoxib] and Bextra[valdecoxib].

Consumer dissatisfaction withinternal analgesics led to a surge insales of external analgesic rubs andwraps. According to IRI, dollar sales ofexternal analgesics were up by 2.6% indrugstores. "External analgesics areexpected to be a major category interms of growth in market share, withan estimated 10% share in 2004," saidKalorama's Heffner.

First aid accessories sales were up by3.9% to $557.3 million in drugstoreslast year. Claritin's line extension ClaritinHives Relief had an impact on thecategory, as did Band-Aid Anti-ItchGel. NexCare also had a significantnew introduction with NexCare LiquidBandage Drops.

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

Editor's Note: The "OTC Products2005 Survey of Pharmacist Recommendations" Supplement appears on thePharmacy Times Web site. Go towww.pharmacytimes.com.