Kline unveils 2011 drivers of U.S. OTC market

PARSIPPANY, N.J. — The U.S. over-the-counter drug market saw strong growth in 2011, thanks to switches of prescription drugs to OTC, gains in the allergy relief products category and holistic marketing, according to a new report from Kline.

According to the international consulting and research firm's Nonprescription Drugs USA 2011 report, at the manufacturers' level, the U.S. OTC drug market posted a gain of 2.4%, reaching $21.4 billion in 2011.

One of the biggest drivers of the market was the switch launch of Sanofi's Allegra, which helped boost the allergy relief products category to grow 16.3%, making it the fastest growing category on the U.S. OTC drug market. Past Rx-to-OTC switch brands, including Johnson & Johnson's Rogaine and Teva Pharmaceutical's Plan B continued to experience strong gains in the hair regrowth products and contraceptives markets, respectively.

Additional highlights of the report included:

  • Traditional OTC lines are delivering growth as they have expanded to meet consumer needs (i.e., Pfizer's Centrum and Bayer's One-A-Day vitamin lines);

  • Most major branded OTC companies performed well in 2011 (with the exception of J&J, which saw a 17.4% drop in sales due to manufacturing issues): Sanofi-Aventis' OTC sales were up more than 100% in 2011, bolstered by the launch of Allegra. Pfizer saw an increase of 5.6%, based on strong sales of the Centrum, Advil, and Caltrate lines. Novartis recorded a 4.6% gain driven by growth of Excedrin, Triaminic and Maalox. Sales gains from Nyquil, Dayquil, Metamucil, and Align helped lift Procter & Gamble's OTC sales up 4.5%, while Bayer's OTC sales enjoyed 4% growth in 2011 based on gains of One-A-Day, Aleve, Bayer Aspirin and Alka-Seltzer;

  • Smaller companies also managed to post solid, above industry average gains in 2011: Prestige Brands' OTC sales rose 15.1% in 2011 as it experienced strong growth from its Pediacare, Little Remedies and Little Tummy's lines of children;s OTCs in addition to gains from the recently acquired cough drop brand, Luden's; and

  • Private-label OTCs were up 8.7% and now account for more than a quarter of the overall OTC market.

Kline also noted that holistic marketing and promotions was a big push from OTC marketers last year, which included emphasis on smart advertising, coupons, social media and in-store displays. These factors will continue to push consumer sales, Kline said, citing that Pfizer executed these strategies with the revamp of its cough-cold brand Robitussin.

But with the highs, the OTC market experienced some low points. Kline said the weight-loss medications category saw steep declines, citing lack of consumer receptivity to GlaxoSmithKline's Alli. Additional declines were recorded among the antidiarrheal preparations and arthritis pain relievers categories, due to sales declines of such products J&J brands Imodium andTylenol Arthritis, respectively.

Looking ahead, Kline noted that as J&J attempts to recapture the OTC market, such analgesic brands as Advil, Bayer Aspirin, Aleve and Excedrin are are not expected to continue accruing high year-over-year gains once Tylenol marketing resumes, the firm said.

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