Consumers help themselves over the counter, boost sales

The business of OTC medicines is good. Sure, the economy is still sluggish, but there could be worse issues for purveyors of OTC medicines. Somebody could actually figure out healthcare reform, for example.

Sales of OTC medicines reached $28.5 billion in sales for the 52 weeks ended April 17, according to Nielsen Group data (food, drug and mass, including Walmart), representing overall growth of 2%. And that growth trajectory is expected to continue to rise, especially as a yet-to-recover economy still pressures patients to seek less expensive health care in the self-care aisles.

The past year, of course, has been all about the H1N1 virus for purveyors of nonprescription remedies, and the sales bear that out—four out of the top five fastest-growing categories through April 17 can credit the lion’s share of growth to the virus that cried pandemic. That’s true, despite the fact that many retailers during spring-time conference calls contended the cold season was relatively flat across the whole season—experiencing an extremely high spike in illness as early as September but virtually no illness after the turn of the year, when cough-cold sales typically spike.

And the retailers weren’t wrong, sales of traditional cough-cold remedies were flat, holding steady at $5.4 billion as compared with last year. But of the four H1N1-driven growth categories, only cough suppressants—$801.1 million in sales on 16.3% growth—fall within that traditional definition of cough-cold remedies. The other three categories—vitamins ($6.3 billion, up 8.3%), hand sanitizers ($273.2 million, up 55.4%) and thermometers ($186.2 million, up 36%)—all share H1N1 as a common denominator of growth.

Hand sanitizers even may have earned significant placement within future cough-cold planograms or seasonal endcaps, as evidenced last year by the number of retailers who either had entire endcaps dedicated to sanitizers.

The fifth growth category this year was antacids, which expanded some 5.8% to sales of $1.6 billion, thanks in most part to the introductions of Novartis’ Prevacid 24HR last year and Schering-Plough’s Zegerid OTC earlier this year. The new proton-pump inhibitor introductions prompted an increase in brand advertising across the category, as Procter & Gamble (Prilosec OTC) defended its PPI share of stomach, and GlaxoSmithKline (Tums) advised consumers that a bottle of Tums should be on hand as even those taking a PPI can experience “break through” heartburn at night.

A sluggish economy also has contributed to an increase in the sale of OTC medicines. According to the March 2010 Kaiser Health Tracking Poll, part of a series of polls around the public perception of health reform and issues conducted regularly by the Kaiser Family Foundation, more than half of Americans reported that the cost of health care has gone up for them in the past year. Roughly a quarter of Americans said these costs have gone up “a lot.”

Many also reported difficulty affording health care. Approximately 69% reported having problems paying medical bills, 57% of respondents had to delay medical care because of the cost and 39% of all respondents chose to self medicate in their local pharmacy’s nonprescription aisles in lieu of visiting a doctor. And those in lower income households, members of racial and ethnic minority groups and those facing health challenges were even more likely to report challenges in paying their bills, the Kaiser Foundation noted.

Top 5 OTC categories by dollar volume *In millionsSource: SymphonyIRI Group for 52 weeks ended April 18 across FDMx
CATEGORYDOLLAR VOLUME*%CHANGE FROM 2009
Vitamins$6,258.18.3%
Adult cold remedies2,979.3-4.1
Headache remedies2,641.4-2.2
Antacids1,585.55.8
Laxatives1,118.8-1.2

Top 5 growing OTC categories by dollar volume

*In millionsSource: SymphonyIRI Group for 52 weeks ended April 18 across FDMx
CATEGORYDOLLAR VOLUME*%CHANGE FROM 2009
Vitamins$6,258.18.3%
Antacids1,585.55.8
Cough suppressants801.116.3
Hand sanitizers273.255.4
Thermometers186.236.0

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