The New Rx-to-OTC Drug Strategies/Markets

Report Highlights

• The total U.S. Rx-to-OTC switched brand and generic ingredient market developed into a $4.9 billion market in 2000
• In 2005, the total Rx-to-OTC switched market will likely reach revenues of $12 billion with an annual average growth rate (AAGR) of 19.4%
• Highest growth will come from the generic drug market, which will rise at an AAGR of 27%. By 2005, the category will represent 26% of the market
• Branded drugs, which make up the largest market segment by far, will grow more slowly at an AAGR of 17.2% through the period
• An aging population, cost containment, changes in health care patterns, life-style trends, and consumer attitudes will fuel growth in all markets
• Mid-term growth will likely be driven by switches of blockbuster prescription drugs.

INTRODUCTION

STUDY GOALS AND OBJECTIVES

The objectives of the study are to present an informative look at the impact of Rx-to-OTC drugs switches within the last 10 years. Markets are divided according to product category. The report is directed toward decision-makers in the industry that desire insight into the changing world of Rx-to-OTC switches now and in the future.

REASONS FOR STUDY

This is an updated study of a previous BCC study on the U.S. market for Rx-to OTC Switches. The study is presented to provide readers with a capsule look at the Rx-to-OTC market over the last 10 years as well as providing an in-depth look at the current and future products. The study assesses the impact of new entrants into the market and analyzes the various pharmaceutical segments where, historically, there have been switches, pending switches, and potential switches that may occur during the forecast period. Because of fierce competition and the changing healthcare environment, manufacturers must be constantly devising novel ways to retain sales of branded products and maintain market share and strive to keep abreast of current and potential opportunities.

SCOPE OF STUDY

The report is designed to be a comprehensive and informative tool to provide and in-depth look at the U.S. market for Rx-to-OTC switches. The report provides data on the historic switches and the impact those products have made on the OTC market; the current market; and the potential market, including those products that have the potential to switch because of pending patent expiration. The geographic scope of the report is the United States. Market size for switched products that are currently available is provided. A detailed discussion of products that are being considered for switching and the criteria for switching are addressed.

The focus of the report is on the prescription-only drugs (both brand and ingredient) that have switched to over-the-counter status. Brand switched products are prescription drugs for which brand companies have applied for an Rx-to-OTC switch. Ingredient switches are switches of the active ingredient in the product after the product has lost brand patent protection. Any company can do ingredient switches after patent expiration with approval from the FDA.

Generic products are based on the active ingredient and are not available until after patent expiration, either prescription or OTC. This process requires an ANDA (Abbreviated new drug applications) filing and approval by the FDA.

The report covers the historic switches and how they have impacted the market. It also covers any current switches that have occurred. Market analysis of the historical and current switches is presented over a 10-year span from 1990 to 2000. Additionally, market forecasts are provided for each market segment through 2005.

Potential switches for Rx-to-OTC refers to products that have a good chance of being approved from prescription to over-the-counter status. This is based on the drug's profile, the manufacturer's motivation to retain sales of the branded product, patent expiration, and BCC's analysis of the market. The potential market is based on the forecast for 2005 plus revenues for potential products that the BCC analyst feels will likely enter the market during the forecast period if approved for OTC status.

The total market for Rx-to-OTC switches is based on brand products that have switched along with switched products that have an active ingredient (this includes generic OTC generic products).

Within the U.S. market for Rx-to-OTC drug switches, markets are divided according to product category including:

• Pain Relievers
• Antifungals and Anti-infectives
• Cough, Cold, Allergy and Asthma
• Gastrointestinal Products
• Other Products.

All categories are further broken down into specific drug types. Each subsegment is discussed in detail, describing the class of drug; historic, current and potential market size; identifying current market drivers; forecasting for 2000 and 2005; assessing current and potential competitors; and identifying current and potential market share.

Within each segment, the report discusses the brand products that have made the switch from prescription to over-the-counter status and details the resulting market for 1990, 1995, 1998, and 2000. The report also details the ingredients that have switched from prescription to over-the-counter status. Switched ingredients can encompass several brand products.

Patient populations and market estimates as well as growth rates are presented for 1990, 1995, 1998, 2000, and 2005. Competitive market shares and profiles for leading companies currently active in the market are addressed as well.

Products included in the new Rx-to-OTC drug switches strategies/markets touch upon many different pharmaceutical areas. Each segment of the report includes a brief explanation of the action of the products and sub-segments, historical and current products that have been switched from Rx-to-OTC, potential products that may be considered for switch from Rx-to-OTC, historical and current market size and participants, and potential market size and participants. The report also provides historical and current revenue data for the switched ingredient market.

There is a detailed analysis of the switches that affected the market and revenues are available for 1990, 1995, 1998, 2000, and 2005. Each segment is detailed in both current market and potential market, providing a thorough evaluation of each segment in terms of revenues, participation and growth opportunities.

METHODLOGY AND INFORMATION SOURCES

The information and analysis presented in this BCC report are based on extensive first hand interviews with primary executives, product managers and clinical specialists in the various categories of Rx-to-OTC switch products. Background information was obtained from various government, , medical journal and trade magazines. Key information from published literature was used to conduct interviews with over 65 industry participants to validate and obtain expert opinions on current and future trends in Rx-to-OTC switch products. Interviews were also used to confirm and/or adjust market size and market share estimates, as well as to formulate market projections.

ANALYST CREDENTIALS

Mary Anne Crandall is an RN, Instructor, and Medical Analyst specializing in the pharmaceutical industry for over 15 years.