Bayer/Merck combined portfolio represents leading position across significant OTC categories

Bayer agreed to acquire the consumer care business of U.S. pharmaceutical company Merck for a purchase price of $14.2 billion. The OTC acquisition will give Bayer the global No. 2 position in nonprescription products following recently announced consolidations in this growing healthcare industry segment, and will significantly enhance Bayer’s business across multiple therapeutic categories and geographies. Merck's consumer care business includes such leading brands as Claritin, Coppertone and Dr. Scholl’s. Pro forma sales of the combined businesses in 2013 amounted to $7.4 billion with Merck’s business, contributing approximately $2.2 billion. 

Upon completion of the acquisition, Bayer is expected to achieve global leadership positions in dermatology and gastrointestinals, and advance to the No. 2 position in the cold, allergy, sinus and flu category. Bayer will remain No. 2 in nutritionals and No. 3 in analgesics. Overall, the proposed GlaxoSmithKline-Novartis combination represents the largest consumer health business with about 5.7% share, according to reports. The Bayer/Merck combination comes in second with around 4.5% share. McNeil Consumer rounds out the top-three globally with a share just above 4%.  

But the combined heft a Bayer/Merck combination will wield may carry a little greater weight in the U.S. OTC market. 

There is no overlap between the OTC product portfolios of Bayer and Merck, and they hold a leading vendor position in 14 categories collectively. Bayer is the No. 1 or No. 2 vendor in seven categories — lice treatments (RID), antacid/analgesic (Alka Seltzer), feminine pain relievers (Midol), internal analgesic tablets (Aleve/Bayer), stomach remedy liquid/powder (Phillips), multivitamins (One-A-Day) and cold sore medication (Campho Phenique). Meanwhile, Merck also is the No. 1 or No. 2 vendor in seven categories — wart removers (Dr. Scholl's Freeze Away), nasal spray (Afrin), cold/allergy/sinus tablets (Claritin), laxative/stimulant liquid/powder/oil (MiraLax), athlete's foot medication (Tinactin/Lotrimin AF), foot care and foot care devices (both Dr. Scholl's). 

In 10 of the above categories, the new Bayer/Merck combination possess at least a 20% market share (rounding up) — antacid/analgesic (81%), foot care devices (54.6%), feminine pain relievers (45.2%), athlete's foot medication (42.5%), lice treatments (33.4%), laxative/stimulant liquid/powder/oil (29.5%), wart removers (28%), stomach remedy liquid/powder (22.1%), multivitamins (20.2%) and internal analgesic tablets (19.8%). (Marketshare data courtesy IRI for the 52 weeks ended Dec. 29, 2013 across total U.S. multi-outlets.)

The Bayer/Merck combination may further boost its hold on the allergy market if the Food and Drug Administration approves Merck's recent switch application for Singulair. However, that may become a separate deal as, according to reports, Merck has retained the switch rights to all of the prescription medicines in its portfolio. 

The question as to whether a Singulair switch will even happen has been placed into some doubt — the FDA's advisory committee recently recommended against the switch out of concern that people would attempt to self-diagnose a more serious asthma condition. However, there is precedent for both the FDA switching a remedy against the advice of its advisory committee — in fact, it is Merck's Oxytrol for Women for the new-to-OTC category of overactive bladder that bears that distinction — and a product carrying a dual indication for both OTC and prescription-only for a more serious indication — when Procter & Gamble's Prilosec OTC was switched it was indicated to treat frequent heartburn; the same strength of omeprazole is available as a prescription remedy for the more serious condition GERD.


- 3:39 PM
admin says

this is an interesting article

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