Industry consolidation, major new brand launches, and a series of mergers and acquisitions in the U.S. OTC market have caused OTC cost structures to shift both in the near- and long-term. The costs associated with marketing, sales, and promotions of OTC brands tend to have wider swings from year to year, offset by administrative and R&D costs that tend to be more stable over time.
Some of the crucial factors that often propel sales and market share gains can actually have a negative impact on short-term profitability for OTC companies. For instance, the large scale market launch of Nexium 24HR (Pfizer) in 2014 involved a multi-faceted promotional campaign and, despite adding sales over $200 million for Nexium 24HR in its first year on the market, Pfizer’s OTC unit’s margin after marketing expenses and operating margin actually declined from 2013 to 2015, according to Kline’s OTC Drugs: U.S. Competitor Cost Structures study.
From this presentation, you will learn about:
- How the research and analysis were conducted
- The impact of mergers and consolidation on OTC cost structures
- The ability of manufacturers to affect cost structures
- The lag between sales growth and profitability for OTC players
The session will take place on Wednesday, September 28, 2016, at 10:00 AM EDT | 4:00 PM CET. If you are interested in joining us, please register here.