Driven by the solid growth of most markets, sales of the U.S. OTC market increase by 3% in 2015. Particularly high gains are seen in the allergy and antacids markets, fueled by recent Rx-to-OTC switch brands, such as Flonase Allergy Relief by GlaxoSmithKline and Nexium 24HR by Pfizer. Recently released sales data from our annual Nonprescription Drugs USA market study pegs the upper respiratory market at more than 7% growth and digestive products at almost 5% from 2014 to 2015. These growth rates are well above the average growth for these markets, propelled by new switch brands being launched and bringing in previous users of these medications from the prescription market to the OTC market.
In the case of the Flonase launch, there is not much cannibalization of sales from existing allergy brands going to the newly launched brand. Most major OTC allergy brands experience sales gains from 2014 to 2015. The allergy market benefits from a strong cold and flu season and possibly a “halo effect” from increased advertising and promotional activities from the launch of Flonase Allergy Relief. Another unique phenomenon in the allergy category is the relatively high level of user dissatisfaction with existing allergy medications and therefore, a fair amount of switching among brands and low brand loyalty. Private-label or store brand allergy medications also have a relatively low market share.
The antacids market is a bit more crowded with stronger brand loyalty and much higher private-label penetration. Leading brands, such as Prilosec OTC by Procter & Gamble, Tums by GlaxoSmithKline, Zegerid OTC by Bayer, and Prevacid 24 Hour by GlaxoSmithKline, all experience steep sales declines as a result of the Nexium 24 HR launch and strong competition from store brands.
Analgesics, topical products, and feminine products also post solid gains in 2015. Tylenol and Motrin by Johnson & Johnson and Excedrin by GlaxoSmithKline continue to post higher than average growth in the analgesics category as their respective manufacturers improve the retail stock levels for their brands after years of being off the market. Strong gains of topical analgesics, eye care products, and hair regrowth treatments drive the topical product class while all feminine product categories post sizeable gains during the year. Nutritional products and other products, including home diagnostic test kits, experience a flat to declining performance in the past year, which limits higher gains for the OTC market.
The future of the OTC market looks bright as recent switches, mega brands, and branded innovations continue to drive sales growth and new switches are expected to enter the market over the next five years. Categories like acne medications, erectile dysfunction, topical products, sleeping aids, migraine medications, and overactive bladder medications have the potential to bring new Rx-to-OTC switches to the U.S. OTC market and add millions of dollars in sales by 2020.
For a complete view of this market, please refer to our Nonprescription Drugs USA study comprised of an insightful written report and detailed online database filled with industry trends and market size data across 31 product categories. In addition, our Rx-to-OTC Switch Pipelines USA: Competitive Assessment will help you assess the Rx-to-OTC switch forecasts by company in the United States. To learn more about these studies, please contact our team.