The global market for over-the-counter (OTC) drugs is expected to surpass $70 billion by 2015, reports Visiongain. According to estimates from the Consumer Healthcare Products Association, retail sales of OTC medicines in the US in 2010 were worth $17 billion, unchanged from the preceding year, and showing an increase over more than $3 billion over a ten-year period.
OTC medicines are drugs for which no prescription is necessary. They are sold in pharmacies or other retail outlets and are used in the prevention and treatment of relatively minor ailments such as headaches and heartburn. OTC drugs are not necessarily dispensed by professionals with medical knowledge, though they can have side effects or interfere with other medicines. Restricted OTC substances are generally sold in outlets employing a registered pharmacist.
OTC medicines are the first port of call for physicians and patients alike in the treatment of minor ailments, with close to 90% of medical care providers recommending patients self-treat minor conditions and the vast majority of patients taking this option. OTC upper respiratory infection medications represent savings of more than $4.5 billion a year for the US healthcare system, while OTC medications to treat heartburn mean savings of close to $760 million annually, or almost $175 per person, reports the Consumer Healthcare Products Association.
OTC Regulations
The regulatory body for OTC products in the US is the Food and Drug Administration (FDA). Despite regulations on OTC medicines, their responsible use remains a concern. The government takes some legislative measures to try to prevent the abuse of these medicines. Cough medicine containing dextromethorphan (DXM) have been widely abused by teenagers in the US, prompting a State Senator to enact legislation restricting the sale of cough medicine containing DXM to minors.
Medicines sold as prescription drugs can be cleared for sale as OTC medicines, granting greater accessibility to consumers. The Rx-to-OTC switchover segment of the OTC market is to show substantial growth. To comply with OTC status requirements, a medicine must be safe, effective and well labeled to provide consumers with comprehensive information about the treatment and its possible side effects. The Consumer Healthcare Products Association reports over 700 OTC products on sale today contain ingredients or dosages that necessitated a prescription less than three decades ago.
Best-Selling OTC Drugs
Cough and cold medicines constitute the top selling OTC medicine for sale on the US market, logging revenue of over $4,000 million in 2010. Painkillers are the second-biggest seller with sales profit in excess of $2,300 million. Heartburn medicines were in third place at close to $1,400 million. Other popular OTC products include: laxatives, oral antiseptics and rinses, first aid care, sunscreen and contact lens products.
Topical OTC drugs are another important market segment with forecast worth expected to exceed $870 million in 2014, according to Datamonitor. Antiseptic cleansers account for the largest part of the topical OTC medicines market at almost 60%, with anti-itch products in second place at almost 28%, followed by anesthetic products, which represent more than 10% of the segment.
OTC Industry Leaders
- Novartis is a world leader in the OTC products industry. The company employs more than 115,000 people across 140 countries, with almost half of them working in the EU. Its extensive OTC product portfolio includes Bufferin and Excedrin used in pain management, anti-inflammatory Volterin, fiber supplements Pursennid and Benefiber. Its cough/cold products include Buckley’s, Comtrex, and Sinecod along with sore-throat treatments Lemocin, Mebucaine, and Orofar. Novartis sells respiratory products Otrivin, Rhinomer, and 4-Way for the treatment of nasal congestion.
- Ohio-based Proctor & Gamble Pharmaceuticals is present in 180 countries, with almost 4.5 billion users of its brands worldwide. The company employs almost 130,000 people and its OTC products include Prilosec, used to treat heartburn. The company announced a joint venture with Teva in 2011, which combines the latter’s OTC product portfolio with P&G’s solid presence across retail outlets. P&G will hold a 51% share with Teva accounting for the remainder.
Market Outlook
The economic crisis has hit the OTC products industry as governments seek to cut back on healthcare spending. In Greece, the government has stopped reimbursing non-prescription medicines in an effort to reduce public spending to tackle the country’s deficit. However OTC markets throughout Western Europe and the US are set to enjoy increasing growth as consumers take greater initiative in treating minor ailments. According to the Consumer Healthcare Products Association, consumers could see savings of over $5 billion per year through more ready use of OTC medicines as a first response to minor medical conditions rather than consulting their physicians. The incentive of saving on medical visits by opting instead for OTC products is likely to continue to boost sales.
Just as consumers are aware of the savings in buying generic rather than brand name drugs, so too may a similar trend impact the OTC products industry as consumers buy active ingredients rather than branded products. Marketing is key for the industry as it tries to instill brand loyalty to avoid a falling off in consumer numbers as price-conscious buyers favor the cheaper option of staying informed about active ingredients rather than automatically choosing name brands.
Leading Associations
Global Over-The-Counter Drug Industry
