Rx to OTC Switch-Market Analysis

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Introduction

Over-the-counter (OTC) drugs are medicines that may be sold directly to a consumer without a prescription from a healthcare professional, and are commonly used to treat symptoms of common illnesses that may not require the direct supervision of a physician.

  • 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, that were 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


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

  1. The OTC Drug Review
    • Began in 1972
    • Ongoing assessment of the safety and effectiveness of all nonprescription drugs
    • Panels of non-government experts review active ingredients in marketed OTC drug products to determine whether they can be classified as safe and effective
    • About 40 former prescription-only drug ingredients have been switched by this process
  2. New drug application (NDA) process
    • Manufacturers submit data to the FDA showing the drug is appropriate for self-administration.
    • 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
    • Some drugs are approved initially as OTC drugs, but most are first approved for prescription use and later switched to OTC

Market Overview

OTC Market

Source:Kalorama Information
Time Period CAGR
2005-2009 3.3%
2009-2014 2.7%
2005-2014 3.0%


Rx vs. OTC Market

Total Pharmaceutical Market by Country, 2009 ($B)

Country Rx Market OTC Market Total Pharma Market OTC as % of Total Pharma Market
United States 214 18 232 7.8
Japan 56 11 67 16.4
Germany 35 5 40 12.5
France 32 4 36 11.1
China 16 5 21 23.1
United Kingdom 17 3 20 15.0
Russia 13 3 16 18.8
Brazil 10 2 12 16.7
Mexico 9 2 11 18.1
India 6 3 9 33.3

Source: Kalorama Information

Rx to OTC Switches

Source:Kalorama Information
Source:Kalorama Information
  • CAGR for 2008-2013 is 9.4%

Major OTC Players

Source:Company Websites


Sales Data for selected Rx to OTC Switches, USA

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

Source:Company Websites, Press Releases and Journals

Factors Affecting Rx to OTC Switch

Factors.png

Trends in Rx to OTC Switches

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) athlete's foot, jock itch, ringworm 7/12/2001 Lotrimin Ultra Schering-Plough
5 ibuprofen, pseudoephedrine HCl, analgesic/decongestant 18/04/2002 Children’s 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 L’Oreal
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 -- 4874794
2 Pepcid Complete J&J/Merck 17/10/2000 15/10/2000 -- 4283408
3 Mucinex Adams Respiratory Therapeutics 12/7/2002 28/04/2020 -- 6372252
4 Commit GlaxoSmithKline 31/10/2002 21/08/2010 -- 5110605
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 -- 4282233
7 Anthelios SX L’Oreal 21/07/2006 24/12/2013 -- 5587150
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
  • Purple highlighted drugs are under FDA exclusivity period

Trend Analysis

  1. 11 out of 22 recent drugs (50%) which switched from Rx to OTC were patent protected
  2. 4 out of 22 recent drugs (18.2%) which switched from Rx to OTC were under FDA exclusivity period
  3. 13 out of 22 recent drugs (59%) were switched from Rx to OTC before their patent or FDA exclusivity expiry. 2 drugs switched after the expiry of patents
  4. 6 out of these 13 drugs made a switch more than 10 years before expiry
  5. 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



US Market Survey - Physicians Preferences and Insights

Objectives of Survey

  • To find Physician preferences for OTC drugs in comparison to prescription drugs
  • To find insights on OTC drugs market and usage
  • To understand the effectiveness of different sources of marketing

Research Methodology

The research instrument used was a questionnaire survey administered to collect empirical data. The physician responses were kept confidential to encourage openness and disclosure. The respondents rated the questions on Yes or No, ticked the relevant choices from the options available and ranked the options on a numerical scale. All the responses were coded using a binary system logic and analysis was done to derive insights there after.

Sample Size and Screening Criteria


Gender Sample Size
Male 18
Female 2
Total Physicians 20


Screening Criteria
Primary Medical Specialty General Physician/Family Practice
No. of years in practice 10
No. of patents consulting per month 150


Survey Results

  • All the respondents would recommend an OTC drug for fever
  • About 95% of the doctors feel that the usage of OTC drugs has increased in the past five years
  • About 85% of them would do so for other minor ailments like cold/cough and acidity
USFirst.png


  • Low cost, effective and easy availability are selected as the major factors that resulted in increased usage of OTC drugs
  • All 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


US2.png
  • Advertisement is the major source of information on OTC drugs for most of the respondents
  • Only 30% of respondents replied in positive when asked about permitting marketing executives to market OTC products through them


US3.png
  • About 63% of the respondents reported the growth rate of OTC usage during 2005-2010 between 25% - 50% and equal percentage of respondents stated that patients are trusting OTC drugs more than they used to do before as the prime reason for the growth
US4.png
US5.png


  • Less than 50% of the patients are not prescribed OTC due to their medical history
Non pres due to medical history.jpg


  • The case of patients coming to the doctor due to side effects from OTC drugs happens once a month
  • About 90% of the respondents feel that non-prescription of drugs is not a serious problem
488×299px
488×304px


  • 85% of the doctors feel that the information on the label of OTC drugs is sufficient for the patients, in order to take OTC medicines
  • 50% of the doctors feel that more OTC drugs should be included under Medicare/insurance coverage



The effective ranking of the ailments in the order of safety of available OTC drugs is as follows:

Effective ranking.jpg

To see the calculation of the effective scores and effective ranking, click on this link

Indian Market Survey - Physicians Preferences and Insights

Objectives of the Survey

The reason for carrying out this research is to determine the scope of potential switch of prescription drugs to over the counter drugs in the Indian pharma industry. The study is particularly focused at the scope of making statins, a drug for reducing cholesterol level, available over-the-counter. The study aims to understand how successful a switch would be, and if it is safe for such drugs to be made available without prescription. The study also aims at determining the marketing pattern of over the counter drugs, and how it can be improved in future.

The objectives for the survey are :

  • To understand the effectiveness of OTC drug marketing campaigns in India
  • To understand the source of information for the OTC drugs among doctors
  • To explore the potential of switch from Rx to OTC drugs
  • To gauge the current prescription pattern of statins in India
  • To identify if statins can be switched to OTC

Research Methodology

The research instrument used was a questionnaire survey administered to collect empirical data. The physician responses were kept confidential to encourage openness and disclosure. The respondents rated the questions on Yes or No, ticked the relevant choices from the options available and ranked the options on a numerical scale. All the responses were coded using a binary system logic and analysis was done to derive insights there after.


Sample Size and Screening Criteria

Screening Criteria

Screening Criteria
Medical Specialty General Physician, Consulting Physician, Gynaecologist, Dermatologist, Cardiologist, Pediatrician
No. of years in practice 10
No. of patients consulting per month 150


Sample Size

Gender Sample Size
Male 44
Female 16
Total Physicians 60



Medical Specialty-wise Breakup
General Physician 17
Consulting Physician 9
Gynecologist 9
Dermatologist 4
Cardiologist 12
Pediatrician 6
Geographywise Breakup
Mumbai 15
Hyderabad 15
Delhi NCR 14
Bangalore 16


Survey Results

  • 97% of the Indian doctors feel that the usage of OTC drugs has increased in the past 5 years
  • Indian doctors feel that the usage of OTC drugs has increased by more than 50% in the past 5 years
  • Ease in the availability of OTC drugs, Advertisements and Saving time are the major reasons for increase in the usage of OTC drugs
Opinion on increased usage - India1.jpg
Reasons for increase in OTC Usage - India.jpg


  • Headache, Cold/Cough and acidity are the most common ailments for which physicians prefer giving an OTC drug
Physician preferences for minor ailments - india.jpg


  • More than 80% of the patients are not prescribed OTC drugs beacuse of their prior medical history
Non pres due to medical history - india.jpg


  • Only 13% of the doctors feel that the information on the labels of OTC drugs is sufficient
  • 98% of the doctors feel that drug-drug interactions might be a potential danger for OTC drugs
  • 48% of the patients come once a month to doctor due to side effects caused by OTC drugs
Patients coming due to side effects - India.jpg


  • 95% of the doctors feel that the problem of taking OTCs in India is serious
Seriousness of taking otc - india.jpg


The effective ranking of the ailments in the order of safety of available OTC drugs is as follows:

Effective ranking - india.jpg

To see the calculation of the effective scores and effective ranking, click on this link

  • 72% of the doctors see an opportunity for Rx-to-OTC switch in Indian pharma market
  • Drugs relating to Vitamins, Antacids, Cuts, wounds and burns & Cold/Cough have a better potential to do well as an OTC drug
Category with better potential for switch - india.jpg


Effectiveness of marketing campaigns

  • Advertisements are a major source of information for Indians on OTC drugs
Source of info - india.jpg


  • Only 23% of the doctors permit marketing executives to market OTC products through them
  • Quality is the most important factor affecting the choice of a drug
Factor affecting choice of a drug - india.jpg


Results on Statins

  • More than 50% of the patients with high cholesteral level fall in the age group of 40-60 years
  • 73% of the patients with high cholesteral level are prescribed Statin by doctors
Age grp increased cholesterol - india1.jpg
Drug prescribed for cholesterol - india1.jpg


  • Atrovastatin and Rosuvastatin are prescribed more than 90% of the times (whenever statins are prescribed) by doctors to patients with high cholesterol level
Prescribed statin - india.jpg


  • Sale and effectiveness of the drug, Manufacturer of the drug and Patient type are the major factors for choosing any type/brand of statin
Factors for choosing statin - india.jpg


  • Only 25% of the doctors feel that statins safe to be made available as OTC drugs for low- to-moderate risk group