AddThis

OTC product sales increased 2.4% in 2008, new research reveals

Related Content

No related items were found.

LITTLE FALLS, N.J. Manufacturers’ sales of over-the-counter drugs grew by 2.4% to $18.3 billion in 2008, according to the latest research in Nonprescription Drugs USA 2008: Market Analysis and Opportunities from worldwide consulting and research firm Kline & Company, released Tuesday.

Private-label OTC medicines were up 8.2% over the same time period, within which antacids and allergy medicines posted the highest growth last year, driven primarily by increases in sales of private-label omeprazole (Procter & Gamble’s Prilosec OTC) and cetirizine (Johnson & Johnson’s Zyrtec).

Allergy, asthma, and sinus medications were up 17.3% as a result of strong sales from Johnson & Johnson’s Zyrtec brand switch from Rx-to-OTC, as well as its equivalent private-label cetirizine; feminine products was another area that grew 7.3% in 2008 as a result of strong sales growth of personal lubricants, as well as the Rx-to-OTC switch brand Plan B by Barr Laboratories.

“By contrasting the overall growth rates for OTCs with the growth rates for private-label products we can easily make the case that more Americans were seeking value and using private-label in 2008,” stated Laura Mahecha, industry manager at Kline’s Healthcare practice.

Not all categories suffer from higher private-label growth, however, as some are able to maintain growth for branded products.

“During tough economic times, consumers are willing to spend more for some brands they are loyal to and that offer good efficacy,” Mahechas said.

If consumers view brands as being a commodity or not offering special advantages, conversely, they may be able to make the trade-off to private-label.

“As the recession continues into 2009, we expect to see increased ‘value messages’ as part of branded advertising to combat the impacts of private-label erosion. Branded OTCs may use advertising messages to stress the brand’s value, efficacy, safety, and possibly longer-lasting doses, which translates into fewer doses and therefore, costs less,” Mahecha said.

According to preliminary research for Kline’s upcoming report Impact of Recessions on the U.S. OTC Market, past declines during recessions have not been particularly steep for the industry. OTC sales declined two years in a row — from 1999 to 2000 — with overall manufacturers’ sales dropping 0.6%, and then it declined again from 2000 to 2001 by 0.5%.

© 2014 Drug Store News. All Rights Reserved.