OTC Cost Structures

Free Webinar – OTC Cost Structures Shift as the Face of the Industry Changes

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.Continue reading

OTC Market

What is Supporting Strong Growth of the U.S. OTC Market?

Driven by the market return of popular OTC brands from Johnson & Johnson and GlaxoSmithKline, as well as the success of several Rx-to-OTC switch brands, the U.S. OTC market increases by a solid 4% in 2015, reveals our recently published Nonprescription Drugs USA report.

In October 2015, Johnson & Johnson announced that the FDA approved the reopening of the Fort Washington, PA, plant that had been shuttered since May  2010. Johnson & Johnson’s key brands, including Tylenol Arthritis Pain and Tylenol 8 Hour, are re-launched in 2015, supporting overall sales growth of the OTC drugs market. Steady distribution of Zyrtec and other key brands from the market leader, Johnson & Johnson, help propel sales in the OTC market.Continue reading

Top Players in the U.S. OTC Market

U.S. OTC Marketers Vault Ahead of the Competition

While the U.S. OTC market is not highly dynamic in terms of growth, its competitive landscape has changed significantly over the past five years, with the top 10 rankings shifting in 2015.

Market leaders Johnson & Johnson and Bayer have remained the #1 and #2 OTC marketers, respectively, for many years. Bayer’s bolt-on acquisition of Merck’s Consumer Health business in 2014 helped solidify its spot as the second-largest OTC marketer. However, the OTC companies ranked 3-10 have been affected by consolidation, mergers, and acquisitions. In 2015, GlaxoSmithKline rises to the third largest position after forming a joint venture with Novartis Consumer Health. Back in 2010, when these businesses were separate, Novartis ranked fifth and GlaxoSmithKline was the sixth largest competitor. Despite the acquisition of Emergen-C immune boosting supplement and the successful launch of Rx-to-OTC switch Nexium 24HR, Pfizer was pushed down to the fourth ranked position from third as a result of the GSK/Novartis joint venture.Continue reading

OTC Drugs: U.S. Competitor Cost Structures

How are Shifts in Cost Structures Affecting the Leading OTC Marketers?

Major mergers and acquisitions in the U.S. OTC market have a way of shifting OTC cost structures both in the near- and long-term. For example, when major businesses are merged, such as Bayer Group’s acquisition of Merck’s U.S. OTC business or when GlaxoSmithKline and Novartis formed a consumer healthcare joint venture, the costs of goods for these organizations often rises initially. This is largely because of duplication of plants and employees. As the new venture sheds duplicate resources, the organization realizes increased profits over the long-term as a result of consolidated resources being used more efficiently.Continue reading