Healthcare Industry Shows Signs of Recovery

Healthcare Industry Shows Signs of Recovery

As 2012 comes to a close, the U.S. OTC market shows signs of modest growth and recovery. Several companies that were once small in size have grown to become medium to large players, mainly from acquisitions of groups of brands. The largest firms have become leaner and streamlined their brand portfolios.

Novartis and Johnson & Johnson are poised to begin their respective brand comebacks to the market. We expect to see some new switch brands entering the market and increased levels of innovation, line extensions, and advertising and promotional expenditures shaping the OTC market in the coming months. At the same time, costs are pressuring OTC players’ margins and decisions need to be made regarding costs of goods, trade promotions, marketing expenses, and R&D costs in order to maintain profit margins.

The OTC industry awaits concrete evidence that the FDA is truly embracing new switch paradigms. Last fall, meetings with the FDA raised possibilities that future Rx-to-OTC switches may incorporate technology, retail kiosks, learned intermediary involvement, or other “outside-the-box” support to help consumers make appropriate purchase decisions for new switches. There has been a fair amount of discussion on these possibilities; however, the industry has yet to see them work in practice. There is a fair amount of trepidation among companies in the industry with regard to attempting such switches as there are valid concerns about the costs and risks associated with doing so.

For more, see our Healthcare Practice listing HERE.

Share this
Posted in Healthcare and tagged , .

Leave a Reply