OTC vs. Prescription Drugs

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Summary

  • OTC drugs have a greater market share than prescription drugs in the rest of the world as compared to the US
  • Consumers and government pressure on pricing will continue to help accelerate the Rx-to-OTC transition in the US
  • The Rx-to-OTC transition will probably be limited to the traditional markets such as allergy/cold, analgesics, anti-infectives, gastrointestinal, and smoking cessation for now
  • There is widespread support for OTC usage among physicians for fever, cold/cough and minor ailments of that nature; beyond that, the physicians do have some reservations


OTC and Prescription Drugs

Introduction

For a medicine to be granted OTC status, it must have a wide safety margin and be effective, and must bear understandable labeling to ensure proper use. More than 700 OTC products on the market today use ingredients or dosages available only by prescription less than 30 years ago. Rx-to-OTC switch refers to the transfer of proven prescription drugs (Rx) to non-prescription, over-the-counter (OTC) status. Rx-to-OTC switch is a data-driven, scientifically rigorous, and highly regulated process that allows consumers to have OTC access to a growing range of medicines

OTC Players

OTC Players.jpg

OTC Market

The compound annual growth rate (CAGR) of OTC market from 2005-2009 was 3.3%. The CAGR from 2009-2014 is expected to be 2.7%.

OTC market size.jpg

OTC vs. Rx Market

OTC vs. Rx market.jpg

Rx-to-OTC Switch

There are two ways in which drugs are commonly switched as approved by FDA in US:

  • The OTC Drug Review
  1. Began in 1972
  2. Ongoing assessment of the safety and effectiveness of all nonprescription drugs
  3. Panels of non-government experts review active ingredients in marketed OTC drug products to determine whether they can be classified as safe and effective
  4. About 40 former prescription-only drug ingredients have been switched by this process
  • New drug application (NDA) process
  1. Manufacturers submit data to the FDA showing the drug is appropriate for self-administration.
  2. The submission includes studies showing that the product's labeling can be read, understood, and followed by the consumer without the guidance of a health care provider
  3. Some drugs are approved initially as OTC drugs, but most are first approved for prescription use and later switched to OTC

Market Overview

Market Overview.jpg

Sales Data for Selected Rx-to-OTC Switches, USA

S.No Switched Drug Manufacturer/Marketer Drug Category Switch Year First 12-Month Sales (in millions)
1 Aleve Bayer Consumer Care Analgesic 1994 $110
2 Alli GlaxoSmithKline Consumer Healthcare Weight Loss Aid 2007 $80
3 Claritin Schering-Plough Healthcare Allergy 2002 $380
4 MiraLax Schering-Plough Healthcare Gastrointestinal 2006 $40
5 Nicoderm CQ GlaxoSmithKline Consumer Healthcare Smoking Cessation 1996 $160
6 Nicorette GlaxoSmithKline Consumer Healthcare Smoking Cessation 1996 $195
7 Pepcid AC Johnson & Johnson - Merck Consumer Pharmaceuticals Co. Gastrointestinal 1995 $200
8 Prilosec OTC Procter & Gamble Gastrointestinal 2003 $130
9 Rogaine McNeil Consumer Healthcare Hair Loss 1996 $180
10 Zantac 75 Boehringer Ingelheim Consumer Healthcare Products Gastrointestinal 1995 $140


Factors Affecting Rx-to-OTC Switch

Consumers: In the current scenario, consumers are looking to cut their health care costs
Government: US government is proactively finding ways to make health care more affordable
Companies: Companies are constantly evaluating various options to keep the consumer product segments profitable

Trends in Rx-to-OTC Switch

New OTC Switch Approvals

New OTC Approvals.jpg

Rx-to-OTC Switches Since 2000

S.NO. INGREDIENT PRODUCT CATEGORY DATE OF OTC APPROVAL PRODUCT EXAMPLES COMPANY
1 ibuprofen (NDA)** migraine 25/02/2000 Motrin Migraine Pain McNeil Consumer Healthcare
2 docosanol (NDA)* cold sore/fever blister 25/07/2000 Abreva Cream Avanir Pharmaceuticals
3 famotidine, calcium carbonate, heartburn, 17/10/2000 Pepcid Complete J&J/Merck
magnesium hydroxide (NDA)* acid indigestion
4 butenafine hydrochloride (NDA) athletes foot, jock itch, ringworm 7/12/2001 Lotrimin Ultra Schering-Plough
5 ibuprofen, pseudoephedrine HCl, analgesic/decongestant 18/04/2002 Childrens Advil Cold Wyeth
suspension for pediatric use (NDA)*
6 guaifenesin extended-release tablet (NDA) expectorant 12/7/2002 Mucinex Adams Respiratory Therapeutics
7 nicotine polacrilex troche/lozenge (NDA)* smoking cessation 31/10/2002 Commit GlaxoSmithKline
8 loratadine (NDA) antihistamine 27/11/2002 Claritin Tablets, Claritin RediTabs, Claritin Syrup Schering-Plough
9 loratadine, pseudoephededrine sulfate (NDA) antihistamine/ 27/11/2002 Claritin-D 12 Hour Extended Release Tablets, Schering-Plough
decongestant
10 omeprazole magnesium acid reducer to treat frequent heartburn 20/06/2003 Prilosec OTC Procter & Gamble
11 loratadine (NDA)** hives relief 15/11/2003 Claritin hives relief Schering-Plough
diphenhydramine citrate & ibuprofen (NDA)*; diphenhydramine HCl & ibuprofen potassium (NDA)* analgesic sleep-aid 21/12/2005 Advil PM Wyeth
12 ecamsule (combined with avobenzone and octocrylene (NDA)* sunscreen 21/07/2006 Anthelios SX LOreal
13 levonorgestrel (NDA) contraceptive 24/08/2006 Plan B Duramed
polyethylene glycol 3350 (NDA) laxative 6/10/2006 MiraLAX Schering-Plough
14 ketotifen (NDA) antihistamine eye drops 19/10/2006 Zaditor Novartis
15 orlistat (NDA) weight loss aid 7/2/2007 alli GlaxoSmithKline
cetirizine HCl & pseudoephedrine HCl (NDA) antihistamine/ 9/11/2007 Zyrtec-D McNeil
16 decongestant
17 cetirizine HCl (NDA) antihistamine, hives relief 16/11/2007 Zyrtec McNeil
lansoprazole (NDA) acid reducer to treat 18/05/2009 Prevacid 24 HR Novartis
18 frequent heartburn
19 levonorgestrel (NDA) contraceptive 10/7/2009 Plan B One Step Duramed
omeprazole and sodium acid reducer to treat 1/12/2009 Zegerid OTC Schering-Plough
20 bicarbonate (NDA) frequent heartburn

Blue highlighted drugs are patent-protected
Purple highlighted drugs are under FDA exclusivity period

Rx-to-OTC Switches before patent expiry

S.NO. PRODUCT EXAMPLES COMPANY DATE OF OTC APPROVAL PATENT EXPIRY FDA EXCLUSIVITY PATENT NUMBER
1 Abreva Cream Avanir Pharmaceuticals 25/07/2000 28/04/2014 -- 4,874,794
2 Pepcid Complete J&J/Merck 17/10/2000 15/10/2000 -- 4,283,408
3 Mucinex Adams Respiratory Therapeutics 12/7/2002 28/04/2020 -- 6,372,252
4 Commit GlaxoSmithKline 31/10/2002 21/08/2010 -- 5,110,605
5 Prilosec OTC Procter & Gamble 20/06/2003 15/11/2019 -- 5690960, 5753265, 5817338, 5900424, 6403616, 6428810
6 Claritin hives relief Schering-Plough 15/11/2003 19/06/2002 -- 4,282,233
7 Anthelios SX LOreal 21/07/2006 24/12/2013 -- 5,587,150
8 Plan B Duramed 24/08/2006 -- 24/08/2009 --
9 MiraLAX Schering-Plough 6/10/2006 -- 6/10/2009 --
10 alli GlaxoSmithKline 7/2/2007 6/1/2018 7/2/2010 6004996
11 Zyrtec-D McNeil 9/11/2007 10/6/2022 -- 6469009, 6489329, 7014867, 7226614
12 Zyrtec McNeil 16/11/2007 2/7/2018 -- 6455533
13 Prevacid 24 HR Novartis 18/05/2009 -- 18/05/2012 --
14 Plan B One Step Duramed 10/7/2009 -- 10/7/2012 --
15 Zegerid OTC Schering-Plough 1/12/2009 15/07/2016 -- 6489346, 6645988, 6699885, 7399772

Blue highlighted drugs are patent-protected
Purple highlighted drugs are under FDA exclusivity period

Trend Analysis

  • 11 out of 22 recent drugs (50%) which switched from Rx to OTC were patent protected
  • 4 out of 22 recent drugs (18.2%) which switched from Rx to OTC were under FDA exclusivity period
  • 13 out of 22 recent drugs (59%) were switched from Rx to OTC before their patent or FDA exclusivity expiry. Two drugs switched after the expiry of patents
  • 6 out of these 13 drugs made a switch more than 10 years before expiry
  • 5 out of these 13 drugs made a switch between 3 to 10 years before expiry

Potential Drugs for Rx-to-OTC Switch

S.NO DRUG PATENT EXPIRY DATE EXPECTED SWITCH YEAR US PATENT NUMBERS
1 Allegra 14/3/2017 2012 5578610, 6037353, 6187791, 6399632, 7138524
2 Clarinex 1/12/2018 >2013 6514520, 7211582, 7214683, 7214684
3 Crestor 17/6/2022 >2014 6858618, 6316460, 7030152, RE37314
4 Lescol 12/6/2012 >2014 5356896, 5354772,
5 Lipitor 8/1/2017 >2014 5969156, 4681893, 5273995, 5686104, 5969156, 6126971, RE40667
6 Pravachol 22/10/2014 >2014 5622985
7 TriCor 21/2/2023 >2014 7276249, 5145684, 6277405, 6375986 , 6652881, 7037529, 7041319, 7320802
8 Vytorin 25/4/2017 >2014 RE37721, 5846966,
9 Zetia 25/7/2022 >2014 7030106, 5846966, 7612058, RE37721
10 AcipHex 8/5/2013 2013 5045552
11 Nexium 25/11/2018 >2014 7411070, 5690960, 5714504, 5877192, 5900424, 6147103, 6166213, 6191148, 6369085, 6428810, 6875872
12 Protonix 30/3/2025 2010 7553498, 4758579, 7544370, 7550153
13 Zofran 7/12/2026 >2014 7544370, 4758579, 7550153, 7553498
14 Propecia 5/11/2013 2011 5571817, 5547957, 5886184
15 Imitrex 10/3/2014 >2010 5554639, 5307953, 5705520
16 Actonel 10/12/2018 >2014 6165513, 5583122, 6096342
17 Boniva 2/9/2014 >2014 5662918, 4927814
18 Fosamax 17/1/2019 >2014 6225294, 5462932, 5994329, 6015801
19 Evista 10/3/2017 >2014 6894064, 6797719, 6458811, 5393763, 5457117, 5478847, 5811120, 5972383, 6906086, RE38968, RE39049, RE39050
20 Detrol 11/5/2020 >2014 5382600, 6630162, 6770295, 6911217
21 Ditropan 22/11/2015 >2014 5674895, 5840754, 1 5912268, 6262115, 6919092
22 Cialis 26/4/2020 >2014 7182958, 5859006, 6140329, 6821975, 6943166
23 Levitra 31/10/2018 >2014 6362178, 7696206
24 Viagra 22/10/2019 >2014 6469012, 5250534



Physician Preferences and Insights: US Market Survey

Rx vs. OTC Survey

Objectives of the survey

  • General information on OTC market and usage
  • Attitude of physicians towards OTC drugs as compared to Rx drugs
  • Effectiveness of marketing campaigns
Sample size of physicians 20
Primary medical specialty General or Family Practice
Avg of visiting patients per month 466 patients
Avg of years of experience 20 years

Physician panel provisioned by: World One.

Increase in OTC Usage

  • 95% of the respondents think that the usage of OTC drugs has increased in the past five years
  • About 63% of them think that usage of OTC drugs has increased by more than 25% over the past 5 years
US1.png

Reasons for Increased OTC Usage

  • Majority of the respondents feel that patients are trusting OTC drugs more than they used to do before and this, along with increased coverage to OTC drugs, triggered the increased usage of OTC drugs over the past five years
Survey2.jpg

About 50% of the respondents think that more OTC drugs should be included under Medicare/insurance coverage.

OTC Usage and Medical History

  • Doctors generally check patient’s medical history for probable side effects and habits before prescribing OTC drugs
Survey3.jpg

About 85% of the respondents think that the information on the labels of OTC drugs is sufficient.

OTC side effects

  • The average no. of patients visiting each respondent in a month is 466 and about one patient among them would visit due to side effect from taking an OTC drug
Survey4.jpg

About 45% of respondents think that the problem of non-prescription medicine today is somewhat serious.

Effectiveness of Marketing Campaigns

  • Advertisement is the major source of information on OTC drugs for most of the respondents
Survey5.jpg

Only 30% of respondents replied in positive when asked about permitting marketing executives to market OTC products through them.

Physician attitude – OTC vs. Rx

  • 100% of the respondents would recommend an OTC drug for fever and about 85% of them would do so for other minor ailments like cold/cough and acidity
Survey6.jpg
  • About 95% of the respondents suggested low cost would be a major factor that would result in the increased usage of OTC drugs
Survey7.jpg

100% of the respondents feel it is important to prescribe a drug that minimizes patients' out-of-pocket costs, while choosing between equally effective and safe medications.

OTC Safety Perceptions

Physicians perceive OTC drugs to be:

  • Very safe for fever, acidity, skin disorders
  • Unsafe for pain
  • Generally safe for headache, cold/cough and digestive disorders
Survey8.jpg