With reformulated products taking less time, and less money, to develop, lifecycle management strategies have become an important tool used by pharmaceutical firms, notes a new study.
A major part of that strategy is the prescription to over-the-counter (Rx-to-OTC) switch, says Alistair Sinclair, a pharmaceutical strategy senior analyst at Datamonitor, which has published the report. However he notes that “several key factors need to be considered before the implementation of an Rx-to-OTC strategy”.
Mr Sinclair says that manufacturers need to “carefully identify what products are suitable for an Rx-to-OTC switch, when in the lifecycle of the product the switch should be initiated, and how to differentiate, price and position the OTC product”. However, the present declining of sales volume in the OTC market is attributed to the rising prices of those medicines, having increased on average by 9.7% year-on-year between 2003 and 2007.
If the trend continues, Mr Sinclair says, not only will it impact the profits of OTC manufacturers, but also national cost-containment measures to reduce ever-mounting healthcare expenditure. “It is only in the UK that the volume of OTC products sold has increased year-on-year between 2003 and 2007,” he added.
The report notes that switching patients from Rx-to-OTC products is a practical cost-containment tool used by governments and payers. However, if they are to reduce their growing national healthcare costs, more investment is needed in the promotion of OTC medicines “to healthcare professionals and the public alike”.
Mr Sinclair adds that “unless the benefits of OTC medicines can be justified to these audiences”, their rising prices compared to Rx products “could conceivably become the single most important factor limiting the growth potential of the OTC market, and will counteract awareness campaigns.”
The leading initiators of these switches have been Schering-Plough (seven OTC products), GlaxoSmithKline (six) and Johnson and Johnson (four), collectively responsible for half the total number of Rx-to-OTC products launched between 2001 and 2007. The defining characteristics of these companies, Mr Sinclair says, is that they are global market leaders, which have broad drug portfolios targeted at the primary care market. They also have “the capacity to assign sizable budgets to the marketing and promotional activities required to drive Rx-to-OTC switching”.
The report concludes by noting that the US food and Drug Administration is giving consideration to a third class – behind-the-counter (BTC) medicines, equivalent to the pharmacy-only status in the UK. As such, BTC drugs would be available without prescription, but only upon the authorisation of the serving pharmacist.
While there are many pros and cons to the introduction of a BTC product status in the USA, to date, the agency has been cagey over its future intentions, Mr Sinclair says. “This is already the fourth time the agency has broached this subject in more than 30 years”.
Nevertheless, looking longer-term, Datamonitor believes that it is inevitable that a BTC classification will be introduced across the pond, “with the benefits outweighing the resistors”. Mr Sinclairs concludes by saying that $1 billion in sales of branded Rx drugs could be switched to OTC/BTC products in the next five years”.
