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Rx-to-OTC Strategies: Maximizing the Commercial Potential of an Rx-to-OTC Switch

Published by: Datamonitor

Published: Jun. 26, 2008 - 174 Pages


Table of Contents


CHAPTER 1 EXECUTIVE SUMMARY
Scope of the report
Key findings
CHAPTER 2 OVERVIEW OF RX-TO-OTC SWITCHING
Why implement lifecycle management strategies?
Classification of medicine types
What is Rx-to-OTC switching?
Why switch? - Drivers and resistors of Rx-to-OTC switching
Pharmaceutical companies - Drivers
A lifecycle management tool to generate revenues towards the end of an Rx drug's life
Boosting brand awareness
Gaining additional periods of exclusivity
Opportunity to differentiate between brands
Pharmaceutical companies - Resistors
Loss of reimbursement
Limited applicability
The cost of OTC launch and prospect of facing limited uptake if not first-to-market
OTC products often have a lower price point
Consumers - Drivers
Increasing public demand for healthcare knowledge and access to a variety of healthcare options
Consumers - Resistors
Out-of-pocket cost
Misdiagnosis, product misuse/non-compliance, and lack of trust in OTC products
Payers and Governments - Drivers
Switching allows limited healthcare budgets to cover the cost of drugs not available OTC
Healthcare professionals - Drivers
Transferring patients from the physician to the pharmacist leads to long-term healthcare cost savings
Healthcare professionals - Resistors
Increased pressure on pharmacists to act as healthcare providers rather than simply as dispensers
What to switch? - Which products are targeted for Rx-to-OTC switching?
Who is switching? - Which companies are the leading Rx-to-OTC switchers?
What are the likely future Rx-to-OTC switches?
Zyrtec-D enters a crowded market
Trial run of Viagra OTC
Schering-Plough files for OTC Zegerid in the US
When to switch? - When is the optimal time to implement an Rx-to-OTC switch?
How to switch? - What are the US and EU regulatory processes?
Rx-to-OTC regulatory processes in the US
Rx-to-OTC regulatory processes in the EU
Marketing and promotion of switched products
DTC recommendations for Rx-to-OTC switched products
The cost of switching
Selecting a price
Zocor Heart Pro in the UK
Strategic pricing in GlaxoSmithKline's EU triptan franchise
Summary of key Rx-to-OTC switch success factors
CHAPTER 3 RX-TO-OTC SWITCHING ACROSS THE SEVEN MAJOR MARKETS
Declining OTC usage across the seven major markets
Overview of the US OTC market
US medicines classification
Market assessment of Rx and OTC classifications in the US
Drivers and resistors in the US market
Gaining 3 years additional exclusivity
Potential loss of reimbursement
BTC - A future switching option in the US?
Unofficial BTC drugs - limiting misuse
Pros and cons of implementing a new class of medicines in the US
Suitability of drugs for a BTC classification
Recommendations on proceeding with the potential introduction of BTC medicines
BTC implementation by the FDA - will they, won't they?
Overview of the Japanese OTC market
Japan's medicines classification
Market assessment of Rx and OTC classifications in Japan
Drivers and resistors in the Japanese market
Free pricing system
Low utilization of OTC products at present, but demand for low-cost medicines is set to rise
Recent update of Rx-to-OTC switch procedures to ease transition
Increased access to OTC products drives uptake
Less than one-third of the population are aware of self-medication
EU approach to Rx-to-OTC switching
Overview of the UK Rx-to-OTC market
UK medicines classification
Market assessment of Rx and OTC classifications in the UK
Drivers and resistors in the UK market
The UK OTC market is underperforming, but has significant growth potential
No OTC patent protection, but 1 year's data exclusivity
Change in marketing and promotion laws limits capitalization on Rx branding
Consumer willingness to self-medicate is influenced by co-payment for prescription drugs
Other OTC drivers and resistors in the UK market
Overview of the German OTC market
Germany's medicines classification
Market assessment of Rx and OTC classifications in Germany
Drivers and resistors in the German market
Minimum 9-month regulatory switch procedure
No dual status limits scope of Rx-to-OTC switch strategy
Limited OTC availability limits uptake
OTC de-reimbursement led to decline in OTC usage
Deregulation has not led to price competition
Increased leniency set for OTC product advertising
Overview of the French OTC market
France's medicines classification
Market assessment of Rx and OTC classifications in France
Drivers and resistors in the French market
Underdeveloped OTC market
France's shrinking OTC market
Free pricing in the French OTC market
OTC products in France are non-reimbursable
Marketing and promotion of pharmaceuticals is strictly regulated in France
Internet pharmacies are not permitted in France
The absence of chain pharmacies limits national branding potential
The government has taken small steps to improve price competition
Overview of the Italian OTC market
Italy's medicines classification
Market assessment of Rx and OTC classifications in Italy
Drivers and resistors in the Italian market
Introduction of OTC classification which can be promoted to the general public
Introduction of pricing flexibility and discounting promotes competition
Greater distribution flexibility increases public access to OTC medicines
Drive to increase awareness and confidence in OTCs
Training future pharmacists on the benefits of OTC medicines
Overview of the Spanish OTC market
Spain's medicines classification
Market assessment of Rx and OTC classifications in Spain
Drivers and resistors in the Spanish market
No dual status permitted in Spain limits attractiveness of Rx-to-OTC switching
Overhaul of product advertising
Increased access to OTC medicines
CHAPTER 4 RX-TO-OTC CASE STUDY ANALYSIS
The varying success of GlaxoSmithKline's EU triptan Rx-to-OTC/pharmacy-only strategies
An unsuccessful Rx switch strategy for sumatriptan in the UK
Potential advantages of Imigran Recovery
A failed generic defense strategy
Factors limiting the impact of Imigran's switch
Key take-home message
GlaxoSmithKline successfully switches naratriptan in Germany
Key strengths of the GlaxoSmithKline's naratriptan
Key take home message
The varying success of GlaxoSmithKline's non-Rx triptan franchises - Formigran versus Imigran Recovery
The rise and fall of Alli
Key strengths of Alli
Why Alli sales plummeted post launch
Key take-home message
Antiulcerants - a prime target for Rx-to-OTC switching
Zantac's multiple formulations maintain OTC franchise momentum
Evaluating the success of Zantac 150 Max Strength
Key strengths of the Zantac Rx-to-OTC switch
Key take-home message
MiraLAX - fulfilling an unmet need in a highly genericized market
Key strengths of Schering-Plough's MiraLAX Rx-to-OTC switch
Key take-home message
CHAPTER 5 BIBLIOGRAPHY
Publications and online articles
Publications, online articles and meetings
Datamonitor resources
Databases
Abbreviations
List of Tables
Table 1: OTC product differentiation, therapeutic and commercial drivers, and additional data required for regulatory approval
Table 2: Rx-to-OTC switches in the US since 2001
Table 3: Therapeutic categories likely to be targeted for Rx-to-OTC/BTC switches in the next 5 years in the US
Table 4: OTC/BTC products could capture $1 billion in sales from drugs facing patent expiry in the US during 2008-2012
Table 5: Summary of Rx and OTC antiulcerant, GERD and heartburn products, 2003-08
Table 6: Pros and cons of early Rx-to-OTC strategy implementation
Table 7: The varying success of GlaxoSmithKline's OTC/pharmacy-only triptan franchise - Formigran versus Imigran Recovery
Table 8: Development and regulatory timeline for Rx-to-OTC product switching
Table 9: The pros and cons of pricing a drug too high or too low
Table 10: The varying success of GlaxoSmithKline's OTC/pharmacy-only triptan franchise - Formigran versus Imigran Recovery
Table 11: OTC market volume, value and price trend data across the seven major markets, 2003-07
Table 12: Summary of GlaxoSmithKline/UCB's Rx and OTC/pharmacy-only triptan products
Table 13: Imigran Non-Rx and Rx franchise in the UK, 2003-07
Table 14: Germany naratriptan OTC and Rx franchise 2003-07
Table 15: The varying success of GlaxoSmithKline's non-Rx triptan franchise in Germany and the UK - Formigran versus Imigran Recovery
Table 16: Summary of Rx and OTC orlistat products in the US, 2008
Table 17: Orlistat OTC and Rx franchise in the US, 2006-07
Table 18: Summary of Rx and OTC antiulcerant, GERD and heartburn products in the US, 2003-08
Table 19: Ranitidine OTC and Rx franchise in the US, 2003-07
Table 20: Ranitidine OTC and Rx franchise in the US, 2003-07
Table 21: Polyethylene glycol OTC and Rx market in the US, 2006-07
Table 22: Comparison of MiraLAX OTC and Imigran Recovery - OTC products launching into a genericized market
Table 23: Datamonitor exchange rates ($)
List of Figures
Figure 1: A wide range of brand defense strategies are available, however timing of implementation is critical
Figure 2: Differences between Rx and OTC drugs
Figure 3: Rx-to-OTC/pharmacy-only switches in the US and UK, 2001-07
Figure 4: Pros and cons of Rx-to-OTC switching
Figure 5: Benefits and risks of responsible self-medication
Figure 6: OTC Zantac becomes market leading ranitidine antiulcerant franchise, Q1 2003-Q4 2007
Figure 7: Response by payers once a prescription drug becomes available OTC
Figure 8: Factors to be considered when evaluating an Rx-to-OTC strategy
Figure 9: OTC products yield significantly greater sales per promotional spend than Rx drugs during the first 9 months post launch
Figure 10: Online patient decision support tool for Zocor Heart Pro
Figure 11: Rx-to-OTC switch and decision support tools may actually increase the number of patient-doctor consultations
Figure 12: Effect of Rx-to-OTC switching on the level of patient-physician interaction and healthcare costs
Figure 13: Leading Rx-to-OTC drug classes in the US and UK, 2001-07
Figure 14: Rx-to-OTC switch initiator companies in the US and UK since 2001
Figure 15: Branded sales at risk following US patent expiries during 2008-2012
Figure 16: Sales of Viagra in UK retail pharmacies, 2006-07
Figure 17: The evolution of prescription-only medicines (POM) to pharmacy-only and to general sales list (GSL) status in the UK
Figure 18: Regulatory approval process for product reclassification by the UK's MHRA and the Committee on Safety of Medicines (CSM)
Figure 19: High price of Zocor Heart Pro limited its uptake in the UK
Figure 20: Disparity between OTC volume and value growth trends across the seven major markets, 2003-07
Figure 21: Drivers and resistors of Rx-to-OTC switching across the seven major markets.
Figure 22: Value ($) and volume (SU) of the US's Rx and OTC markets, 2003-07
Figure 23: Pros and cons of implementing a new class of medicines in the US
Figure 24: Key comments made by the APhA supporting the FDA introduction of BTC status, March 2008
Figure 25: Value ($) of Japan's Rx and OTC markets, 1997-2005
Figure 26: Enhanced Rx-to-OTC switch scheme proposed by the PAFSC, March 2007
Figure 27: Value ($) and volume (SU) of the UK's Rx and OTC markets, 2003-07
Figure 28: Summary of drivers and resistors of implementing non-Rx strategies in the UK market outlined by the PAGB
Figure 29: Value ($) and volume (SU) of Germany's Rx and OTC markets, 2003-07
Figure 30: Value ($) and volume (SU) of France's Rx and OTC markets, 2003-07
Figure 31: Italian OTC product trademark
Figure 32: Value ($) and volume (SU) of Italy's Rx and OTC markets, 2003-07
Figure 33: Value ($) and volume (SU) of Spain's Rx and OTC markets, 2003-07
Figure 34: Sumatriptan OTC and Rx franchise in the UK, 2003-07
Figure 35: Naratriptan OTC and Rx franchise in Germany, 2003-07
Figure 36: Price of naratriptan OTC and Rx products in Germany, 2003-07
Figure 37: Orlistat OTC and Rx franchise in the US, 2006-07
Figure 38: Promotional spend of orlistat products in the US, 2006-07
Figure 39: Ranitidine OTC and Rx franchise in the US, 2003-07
Figure 40: Polyethylene glycol OTC and Rx market in the US, 2006-07
Figure 41: Promotional spend on PEG products in the US market, Q2 2006- Q4 2007
Figure 42: Pricing of PEG products in the US, 2006-07


Abstract

Introduction

With the growing cost of developing novel drugs, combined with the fact that fewer such drugs are gaining regulatory approval, the use of lifecycle management is playing an ever-more important role in the increasingly cost-conscious pharma industry. Rx-to-OTC switching is one such strategy employed to either enhance existing franchise revenues or protect branded revenues from generic competition.

Scope
  • Overview of the Rx-to-OTC strategy, analyzing why, when, where, what and how to implement such a switch strategy
  • Identification of drivers and resistors of Rx-to-OTC switching across the seven major pharmaceutical markets
  • Case study analysis of the most recent Rx-to-OTC switches
Highlights

For Rx-to-OTC switches to succeed, there needs to sufficient differentiation between the existing Rx drug and the new OTC product. However, differentiation must meet a genuine unmet need. Differentiation for the sake of it is unlikely to produce a winning Rx-to-OTC switch strategy.

The volume of the OTC market is declining in the majority of the seven major markets. If this trend continues, it will not only impact the profits of OTC manufacturers, but also national cost-containment measures to reduce ever-escalating healthcare costs.

At present, Rx-to-OTC switches in the five major EU markets are decided at a national level. However, despite ongoing discussions, there are numerous barriers to harmonized EU Rx-to-OTC switches. Consequently, it is unlikely that in the EU harmonization will happen at least in the foreseeable future.

Reasons to Purchase
  • Identify the recent trends in the Rx-to-OTC market, including which are the most popular OTC indications, and who is implementing Rx-to-OTC switches
  • Gain insight into the drivers and resistors of implementing Rx-to-OTC switches across the seven major markets
  • Recommendations on how to maximize the commercial success of an Rx-to-OTC switch
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