Recently released data from our Nonprescription Drugs USA study shows that the U.S. nonprescription drugs industry posted moderate growth in 2014, recording revenue growth for the sixth consecutive year. Estimated at $24+ billion at the manufacturers’ level, the market climbs by 1.4% from 2013 to 2014. Out of the seven product classes we track, five posted growth, with upper respiratory, digestive products, and feminine products moving at a faster pace.
Among the key factors supporting the market’s growth are the sales and shares increases from select switch brands, such as Pfizer’s Nexium 24HR, which drove solid growth in the digestive products category, as well as the launch of Sanofi’s Nasacort 24HR, which generated healthy gains in the allergy category.
Johnson & Johnson and Novartis suffered major setbacks due to manufacturing issues in the past overcame these issues to post solid gains in 2014 for several of their key OTC brands, including Johnson & Johnson’s Tylenol and Motrin and Novartis’ Excedrin. In addition, select switch brands continue to perform well, even if they are already a few years old. For example, Bayer’s MiraLAX was brought to the market through Rx-to-OTC switch in 2006 and had solid sales gains in 2014.
While many brands saw a decline in ad spending, companies are investing increased ad dollars in select strategic brands to drive sales and share gains. Select brands such as Aleve (Bayer) and Zyrtec (Johnson & Johnson) received increase ad spending in 2014. There’s also an ongoing trend among companies to spend more on promoting strategic brands, which helps drive the industry’s growth as well. Another trend that helped drive dollar sales is increased sales of OTC brands with premium price points, such as Plan B One Step (Teva) emergency contraceptive.
After experiencing a strong 2013 with sales up by nearly 5%, private-label products show flat sales in 2014 due to strong branded sales growth in many categories. During 2009-2010, when the Great Recession was at its peak, U.S. consumers were extremely price conscious; however, as the economy improves, it appears that we are seeing a shift in purchasing habits where there is a higher interest in brands and their claims, not just prices.
Built on 50+ years of experience, the Nonprescription Drugs USA study is the cornerstone of Kline’s Healthcare Practice, providing a complete and clear picture of the OTC market with a focus on key trends, developments, challenges, business opportunities, and new product activity. The 2014 data has now been released in Kline’s interactive online database, followed by the written report very soon. In addition, to better cater clients’ needs and provide a higher level of data accuracy, we are pleased to announce our exclusive alliance with IRI, the global leader in innovative solutions and services for consumer, retail, and over-the-counter healthcare companies.
Written by Marcela Chifu, Marketing Coordinator - Kline’s Consumer and Healthcare Practice