HEALTH

Innovative switch products lift OTC sales

BY Michael Johnsen

Five macro trends impacted sales of OTC medicines in 2014, Bob Sanders, EVP at IRI, shared with attendees of the Consumer Healthcare Products Association Annual Executive Conference in March. On the plus side, switch continues to drive considerable growth across OTC aisles — Rx-to-OTC accounted for 19% of OTC sales and 27% of growth in the past five years, and that trend is likely to continue, Sanders said. Also, self-care as a preventive measure toward better health is taking hold in the consumer psyche.

“Innovation in general is very, very key,” Sanders told Drug Store News in an interview following the conference. “If you look at past performances, innovation drove or was a major contributor to the nutritional growth we had realized over the past three years,” Sanders said, pointing to the recent surge in gummy vitamin sales from companies like Church & Dwight, for example. Another great example of innovation is Procter & Gamble’s ZzzQuil launch, Sanders said.

And while innovative switch products like Nasacort Allergy 24HR, Nexium 24 HR and most recently Flonase also help significantly boost OTC sales, there has been a lack of monograph-based innovation, Sanders said, which limits further growth potential. “In the monograph cookbook, what creative marketing [introductions] did companies come up with last year? The answer is not much,” Sanders said.

Another drag on OTC growth is a lack of trust in OTC safety and effectiveness due to the major recalls over the past several years, and more recently the attack on the herbal industry by New York Attorney General Eric Schneiderman. “Negative press on any front, [either OTC or VMS], or unavailability of the product that they use and trust … really impacts even greater uptick in the self-care trend,” Sanders said. “It is absolutely a barrier to greater acceptance and use of over-the-counter products and nutritionals as first-line therapy.”

Finally, there is the potential impact of the Affordable Care Act. An early read suggests growth of OTC use among participants of the ACA Health Exchanges is not as high as consumers not using the exchanges, Sanders noted. “They have options now. These are folks who were uninsured and their only option was over-the-counter,” he said. While that has changed with the implementation of ACA, it’s still too early to draw concrete conclusions, Sanders said. IRI will be tracking that trend longitudinally, he added.

According to IRI, sales of OTC medicines and natural supplements reached approximately $40 billion in 2014, representing 6.4% of total store sales. And OTC sales outpaced total store growth with a 2.8% lift vs. 2.2% growth overall. The top five categories — nutritionals ($9.7 billion), respiratory ($7.5 billion), analgesics ($4.4 billion), gastrointestinal ($4.3 billion) and first aid ($3 billion) — represented 75% of total OTC category sales. The key growth leaders in OTC are respiratory (4.7%), sleep (4.4%), gastrointestinal (4.2%) and first aid (3.3%).

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E-pill Medication Reminders launches kitchen fixture pill dispenser

BY Michael Johnsen

BOSTON — On Wednesday, e-pill Medication Reminders released a pill box dispenser that can be mounted under a kitchen cabinet. 
 
The Accutab Personal Pillbox is a semi-automatic pill dispenser for one person and can dispense all pills, including prescription pills, OTC medicines or vitamins/supplements, up to three times per day. And Accutab holds up to 25 aspirin-sized tablets per medication event. 
 
The Accutab Personal Pillbox is available for an introductory price of $39.95 from e-pill Medication Reminders and Amazon.com, the company stated. 
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Perrigo rejects Mylan deal in favor of organic growth

BY Michael Johnsen

DUBLIN — Perrigo late Tuesday afternoon unanimously rejected the unsolicited proposal from Mylan, disclosed April 8, to acquire all of the outstanding shares of Perrigo for $205 per share in a deal valued at $29 billion. Following a thorough review, advised by its financial and legal advisers, Perrigo's board unanimously concluded that the proposal substantially undervalues the company and its future growth prospects and is not in the best interests of Perrigo's shareholders.
 
In the wake of Perrigo's rejection, Mylan shareholders have another deal to consider: Teva Pharmaceutical Industries earlier in the day submitted an unsolicited proposal to acquire Mylan in a deal valued at $40 billion. "Even though Perrigo rejected Mylan’s initial offer, Teva faces hurdles in its effort to acquire Mylan," The New York Times reported Tuesday. "Mylan is unlikely to simply walk away from its pursuit of Perrigo. But analysts think it will have to secure an agreement if it wishes to remain a stand-alone company." 
 
"The board believes the proposal substantially undervalues Perrigo and its growth prospects and that continued execution by the management team against our global growth strategy will deliver superior shareholder value," stated Joseph Papa, Perrigo president and CEO. "Perrigo has a long history of driving above market shareholder value through consistent growth with a focus on profitability and operational excellence, which is reflected in our organic net sales CAGR goal of 5% to 10% for the next three years. With the acquisition of Omega Pharma, we are a top five global OTC company with a diversified portfolio, a leading market position in key franchises and a strong and established global distribution platform. We will continue to capitalize on our durable competitive position by expanding our international platform organically and through future synergistic deals. These actions will advance our leadership in the global OTC marketplace."
 
Perrigo on Tuesday separately announced results for the  third quarter of fiscal 2015 ended March 28, and has provided guidance for calendar year 2015 in connection with its upcoming move to a calendar fiscal year. In the quarter, Perrigo generated record revenue, adjusted net income and operating cash flow, the company reported. In addition, Perrigo's three-year organic net sales CAGR goal from 2014 to 2017 is 5% to 10%.
 
Perrigo advised shareholders to take no action in relation to the Mylan proposal. "There can be no certainty that any firm offer will be made, nor any certainty as to the terms on which any firm offer might be made by Mylan," the company stated. 
 
Morgan Stanley is acting as financial adviser and Wachtell, Lipton, Rosen & Katz and A&L Goodbody are acting as legal advisers to Perrigo.
 
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