Switch Sponsors Weigh Business Opportunities Against Regulatory Risk

In 2020, the U.S. market saw four new brands previously sold as prescription drugs enter the nonprescription market: 

  • Pataday allergy eye drops 
  • Voltaren Arthritis Pain topical NSAID 
  • Advil Dual Action ibuprofen and acetaminophen pain reliever 
  • Sklice lice treatment 

The new switch approvals have signaled a willingness on the part of regulators to be less conservative when it comes to OTC access to these medicines.  Nasal steroid switches, like Flonase and Rhinocort, along with the topical NSAID Voltaren Arthritis Pain and Sklice lice shampoo, are all in categories where switch activity was curtailed in the not-so-distant past due to concerns over systemic absorption of topically applied medicines. For in-depth profiles of recently approved FDA switches, subscribe to the all-new KlinePULSE Consumer Healthcare Industry Trends service. 

In 2018, the FDA also updated its 2012 guidance for the industry, known as NSURE, with new suggestions for Innovative Approaches for Nonprescription Drugs Products. Two key approaches the agency discusses in the 2018 Draft Guidance are: 

  1. Expanding labeling beyond the standard Drug Facts Label (DFL) to better inform consumers on safe and effective use in an OTC setting.  This could include expanded leaflets or information where the sponsor has more room to provide consumers information necessary to make the best self-selection decisions.   
  2. Implementation of additional aids beyond labeling to help consumers appropriately selfselect and use the OTC product.  This could include mobile applications, information on websites, videos, or other aids to help consumers make the right purchase decision. 

The FDA’s receptiveness to switches could help pave the way for new approvals in existing and altogether new OTC categories.  Existing OTC categories that have the potential for additional switches include: 

  • Allergy relief 
  • Sleeping aids 
  • Smoking cessation aids 
  • Oral contraceptives 
  • Topical analgesics 

Several of the switch candidates in these categories represent those with low to moderate business opportunities and low risk of regulatory denial.   

However, the more challenging switches that would create entirely new OTC categories are often  where the largest commercial opportunities lie. That said, they have the greatest regulatory risk and often require considerable time and resources to bring to market. The categories include: 

  • Benign prostatic hyperplasia (BPH) 
  • Cholesterol 
  • Erectile dysfunction 
  • Influenza 
  • Migraine 
  • Overactive bladder medications

The future switch horizon has several opportunities; however, the tradeoffs between business opportunity and regulatory risk are those that switch sponsors need to consider carefully.  

Kline’s justpublished report, Rx-to-OTC Switch Forecasts, provides extensive research into each of these drug classes and comprehensive, objective assessment of the switch landscape, including forecasts of switches in the United States in existing OTC categories and projections for new OTC categories. The study provides a broad assessment of “switchable” OTC categories, a specific analysis and forecasts for the most-likely switch categories and drugs through 2026, and an analysis of regulatory and retail paradigm shifts and implications for future switches. In addition to a detailed written report, this service provides Kline’s interactive and proprietary FutureView Forecasting Model to help users predict sales of new switches.  For more information, contact us.

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