OTC Pharmaceuticals in the United States
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Datamonitor (Published December 2009)
EXECUTIVE SUMMARY Market Value
The United States OTC pharmaceuticals market grew by 3.7% in 2008 to reach a
Market Value Forecast
In 2013, the United States OTC pharmaceuticals market is forecast to have a value of
$27.3 billion, an increase of 15.8% since 2008.
Market Segmentation I
Sales of cough and cold preparations generated 23% of the United States OTC
Market Segmentation II
The United States generated 23.8% of the global OTC pharmaceuticals market's
Market Share
Johnson & Johnson accounts for 13.6% of the United States OTC pharmaceuticals
Distribution
Pharmacies and drugstores form a leading distribution channel in the United States
OTC pharmaceuticals market, accounting for 59.3% of the total value.
Datamonitor (Published December 2009)
TABLE OF CONTENTS EXECUTIVE SUMMARY CHAPTER 1 Market Overview Market Definition Research Highlights Market Analysis CHAPTER 2 Market Value CHAPTER 3 Market Segmentation I CHAPTER 4 Market Segmentation II CHAPTER 5 Market Share CHAPTER 6 Competitive Landscape CHAPTER 7 Leading Companies Johnson & Johnson Pfizer Inc. Schering-Plough Corporation CHAPTER 8 Distribution 28 CHAPTER 9 Market Forecasts Market Value Forecast CHAPTER 10 Macroeconomic Indicators
Datamonitor (Published December 2009)
CHAPTER 11 Appendix 31 11.1Methodology 31 11.2Industry Associations 11.3Related Datamonitor Research
Datamonitor (Published December 2009)
LIST OF TABLES
United States OTC Pharmaceuticals Market Value: $ billion, 2004-2008.9
United States OTC Pharmaceuticals Market Segmentation I: % Share, by Value,
United States OTC Pharmaceuticals Market Segmentation II: % Share, by
United States OTC Pharmaceuticals Market Share: % Share, by Value, 2008 .12
Key Financials: Johnson & Johnson .20
Key Facts: Schering-Plough Corporation .24
Key Financials: Schering-Plough Corporation.26
United States OTC Pharmaceuticals Distribution: % Share, by Value, 2008 .28
United States OTC Pharmaceuticals Market Value Forecast: $ billion, 2008-
United States Size of Population (million) , 2004-2008 .30
United States GDP (Constant 2000 Prices, $ billion), 2004-2008 .30
Datamonitor (Published December 2009)
CHAPTER 1 MARKET OVERVIEW 1.1 Market Definition
The OTC pharmaceuticals market values consists of the total sales of traditional
medicines, cough and cold preparations (tablets, mixtures, lozenges, topical
remedies, inhalers), vitamins and minerals (multi-vitamins, single minerals, single
vitamins, tonics), indigestion preparations (tablets, powders, mixtures), analgesics
(Paracetamol, Ibuprofen, Aspirinand other analgesics), and medicated skin products
(anti-bacteria’s, acne treatments, anti-fungal, disinfectants and other), topical OTC
medicines (anesthetic products, anti-itch products, antibiotic creams/gels), plasters &
bandages (adhesive bandages/plasters, first aid tape, gauze pads/rolled gauze, liquid
bandages and other tape or bandage), first aid kits and other (anti-smoking aids,
rectal medications, eye/ear drops, sleeping aids, and motion sickness). Market’s
values are calculated using retail selling price (RSP) and include any applicable
taxes. Any currency conversions used in the creation of this report have been
calculated using constant annual average exchange rates.
For the purpose of this report the Americas comprise Argentina, Brazil, Canada,
Chile, Colombia, Mexico, Venezuela, and the US.
Europe comprises Belgium, the Czech Republic, Denmark, France, Germany,
Hungary, Italy, Netherlands, Norway, Poland, Romania, Russia, Spain, Sweden, the
Asia-Pacific comprises Australia, China, Japan, India, Singapore, South Korea and
The global figure comprises the Americas, Asia-Pacific and Europe.
1.2 Research Highlights
The United States OTC pharmaceuticals market generated total revenues of $23.6
billion in 2008, representing a compound annual growth rate (CAGR) of 3.3% for the
Sales of cough and cold preparations proved the most lucrative for the United States
OTC pharmaceuticals market in 2008, generating total revenues of $5.4 billion,
equivalent to 23% of the market's overall value.
The performance of the market is forecast to decelerate, with an anticipated CAGR of
3% for the five-year period 2008-2013, which is expected to lead the market to a
value of $27.3 billion by the end of 2013.
Datamonitor (Published December 2009)
1.3 Market Analysis
The United States OTC pharmaceuticals market grew at an unsteady rate for the
period spanning 2004-2008. The rate of growth for this market is expected to
decelerate in the forthcoming five years.
The United States OTC pharmaceuticals market generated total revenues of $23.6
billion in 2008, representing a compound annual growth rate (CAGR) of 3.3% for the
period spanning 2004-2008. In comparison, the European and Asia-Pacific markets
grew with CAGRs of 3.1% and 4.9%, respectively, over the same period, to reach
respective values of $38.9 billion and $26.8 billion in 2008.
Sales of cough and cold preparations proved the most lucrative for the United States
OTC pharmaceuticals market in 2008, generating total revenues of $5.4 billion,
equivalent to 23% of the market's overall value. In comparison, sales of vitamins and
minerals generated revenues of $3.4 billion in 2008, equating to 14.4% of the
The performance of the market is forecast to decelerate, with an anticipated CAGR of
3% for the five-year period 2008-2013, which is expected to lead the market to a
value of $27.3 billion by the end of 2013. Comparatively, the European and Asia-
Pacific markets will grow with CAGRs of 2.8% and 4.6%, respectively, over the same
period, to reach respective values of $44.6 billion and $33.5 billion in 2013.
Datamonitor (Published December 2009)
CHAPTER 2 MARKET VALUE
The United States OTC pharmaceuticals market grew by 3.7% in 2008 to reach a
The compound annual growth rate of the market in the period 2004-2008 was 3.3%.
United States OTC Pharmaceuticals Market Value: $ billion, 2004-2008 $ billion $ billion CAGR, 2004-2008: D A T A M O N I T O R Figure 1: United States OTC Pharmaceuticals Market Value: $ billion, 2004-2008 D A T A M O N I T O R
Datamonitor (Published December 2009)
CHAPTER 3 MARKET SEGMENTATION I
Sales of cough and cold preparations generated 23% of the United States OTC
Sales of vitamins and minerals generated 14.4% of the market's value.
United States OTC Pharmaceuticals Market Segmentation I: % Share, by Value, 2008
Category %
Other 39.10% Total 100.0%
D A T A M O N I T O R Figure 2: United States OTC Pharmaceuticals Market Segmentation I: % Share, by Value, 2008 D A T A M O N I T O R
Datamonitor (Published December 2009)
CHAPTER 4 MARKET SEGMENTATION II
The United States generated 23.8% of the global OTC pharmaceuticals market's
Europe accounts for a further 39.1% of the global market's value.
United States OTC Pharmaceuticals Market Segmentation II: % Share, by Value, 2008
Geography %
Europe 39.10%Asia-Pacific 27.00%United States
Total 100.0%
D A T A M O N I T O R Figure 3: United States OTC Pharmaceuticals Market Segmentation II: % Share, by Value, 2008 D A T A M O N I T O R
Datamonitor (Published December 2009)
CHAPTER 5 MARKET SHARE
Johnson & Johnson accounts for 13.6% of the United States OTC pharmaceuticals
Wyeth generates a further 5.5% of the market's value.
United States OTC Pharmaceuticals Market Share: % Share, by Value, 2008
Company %
Other 76.00% Total 100.0%
D A T A M O N I T O R Figure 4: United States OTC Pharmaceuticals Market Share: % Share, by Value, 2008 D A T A M O N I T O R
Datamonitor (Published December 2009)
CHAPTER 6 COMPETITIVE LANDSCAPE
The OTC pharmaceuticals market will be analyzed taking manufacturers of OTC
drugs as players. The key buyers will be taken as pharmacies, general stores and
supermarkets, and manufacturers of active pharmaceutical ingredients (API) as the
The US OTC pharmaceutical market is highly fragmented, with the top three players
holding 24% of the total market by value. Local distributors have less buyer power
than the large supermarkets, due to their smaller size. However, certain buyers
integrate backwards in this market, which increases pressure on market players, thus
increasing buyer power at the same time.
Suppliers include manufacturers of active pharmaceutical ingredients (API), and are
most often supplied to pharmaceutical companies under contractual arrangements,
increasing switching costs and enhancing the power of suppliers.
Market entry is made more difficult by the product development costs where a new
drug is concerned, and by the need to obtain approval for products from the
Prescription drugs are the main substitute, but the threat they pose is weak: they are
often only used in situations where no adequate OTC remedy exists. Rivalry is
strong, with increasing consolidation among the market players leading to bigger
However, the market growth in the US OTC drugs market mitigates rivalry somewhat,
The US market will be analyzed taking the distributors of drugs, including
pharmacies, general stores and supermarkets, as buyers. The pharmacies and
drugstores form the most important distribution channel for OTC drugs in this market.
These distributors have less buyer power than the large supermarkets, due to their
smaller size. Moreover, large pharmaceutical companies with recognized brands
wield considerable power over smaller pharmacies and drug stores, thus reducing the
Retailers often exert significant power in supply chains, however, consumer
preference for wide availability of self-medication options forces buyers in this market
However, OTC drugs are much more important to the business of a pharmacy than a
supermarket and as a result buyers' switching costs can differ slightly in this market.
Datamonitor (Published December 2009)
Buyers tend to integrate backward in this market but this is not common. However,
when such integration takes place, it increases pressure on market players,
increasing buyer power at the same time. Overall buyer power is moderate.
Suppliers to the OTC pharmaceutical market are mainly manufacturers of Active
Pharmaceutical Ingredients (API). Market players require a wide range of specialized
ingredients, which maintains supplier power.
However many large pharmaceutical companies have operations in chemical
manufacturing. For instance, Teva Pharmaceuticals manufactures a number of API
Merck & Co also has its own chemicals division. Smaller pharmaceutical companies
do not have the sufficient infrastructure to manufacture chemical ingredients
themselves, as they lack expertise and therefore are often heavily reliant upon API
Although some chemical manufacturers only supply to pharmaceutical companies,
many also supply to numerous industries and develop chemicals for food ingredients,
animal feed and ceramic material manufacturers, reducing their dependence on
revenues gained from pharmaceutical supply.
APIs are most often supplied to pharmaceutical companies under contractual
arrangements, increasing switching costs and enhancing the power of suppliers.
The OTC drugs market in the US involves a high level of specialization and expertise
with high upfront investment costs, making the market difficult to enter. The main
costs are incurred from extensive clinical trials.
Some OTC manufacturers invest in new product development which involves high
development costs from extensive clinical trials. Despite this, smaller firms are
prevalent in the market and can still achieve efficiency through collaborations with
larger firms which allows them to benefit from increased funds (in the form of
collaborative revenues), creating more innovation and research opportunities.
The most realistic entry method would be as a small generic drug firm; a much less
costly business model than developing branded drugs. However, in countries such as
the US for a medicine to be granted OTC status, it must have a wide safety margin
All countries have regulatory bodies that approve drugs for use such as the Food and
Drug Administration (FDA) in the US. There are opportunities for new companies in
over-the-counter drugs with the strong growth of the market.
Datamonitor (Published December 2009)
This is being fostered by an ageing population and by a global trend toward self
medication. In the pharmaceutical industry, product recalls can damage brand image
and issues over the safety of drugs can impact end users decision to purchase OTC
Even in this market where some products are highly important to the end user,
customer preferences can have a strong pull-through on manufacturers. However, it
is unusual for an OTC drug to be withdrawn from the market due to safety issues
although there have been a few instances.
For instance, in 2005, the FDA removed phenylpropanolamine, a decongestant, from
over the counter sale due to a study that found the drug caused increased risk of
Drugs often become over-the-counter by switching from a prescription drug which can
increase consumer confidence in the product. Overall the threat of new entrants is
Prescription drugs offer an obvious substitute to OTC pharmaceuticals, but these are
normally suited to treating more serious ailments, and thus largely fail to encroach
into the OTC market. Moreover most pharmaceutical companies produce both OTC
and prescription drugs, which diminishes any threat from this particular substitute.
Many consumers now use alternative medicines, like homeopathy but often in
conjunction with conventional medicine, thereby making them less threatening, and
Sustained use of alternative medicines instead of scientific preparations is often
linked with adherence to an alternative lifestyle, philosophy or political belief system,
Thus, while there is niche demand for such products, the majority of the populace is
unlikely to view alternative medicines as a viable alternative to OTC pharmaceuticals.
Overall the threat from substitutes is assessed as weak.
The OTC pharmaceutical market is witnessing increasing consolidation leading to
creation of bigger companies and more competition in the market.
These firms have typically high fixed costs, as drug research and development
requires continued investment. Exit barriers are fairly high as most companies that
manufacture OTC drugs are focused on the pharmaceutical market and are similar to
Datamonitor (Published December 2009)
There are some personal care companies in operation, involved in the OTC drugs
market or even in prescription pharmaceuticals, and the differentiation of products
mean that exit barriers are lower. For example, Reckitt Benckiser owns the Nurofen
and Strepsils brand after acquiring Boots Healthcare International and is also
primarily involved in the production and distribution of household cleaning and
personal care products. In this market, manufacturers can differentiate by
demonstrating a drug that has a greater clinical benefit than another and also through
a strong brand image. For example, Ibuprofen is a popular painkiller but Nurofen is
the best known brand which has achieved strong sales.
Sales growth has been sustained by innovation and extensions to the product, for
example the production of Nurofen fast relief. The growth in this market mitigates
rivalry somewhat. Overall, rivalry with respect to the OTC drugs market is moderate.
Datamonitor (Published December 2009)
CHAPTER 7 LEADING COMPANIES 7.1 Johnson Key Facts: Johnson & Johnson
One Johnson & Johnson Plaza, New Brunswick, New Jersey 08933, United States
Website: www.jnj.com Financial Year-End:
D A T A M O N I T O R
Johnson & Johnson (J&J) engages in the manufacture of health care products, and
provides health care related services for the consumer, pharmaceutical, and medical
devices and diagnostics markets. It is a holding company and has over 250 operating
companies that conduct business worldwide.
The company operates predominantly through three segments: consumer,
pharmaceuticals, and medical devices and diagnostics.
J&J's consumer segment develops and markets products for baby care, skin care,
oral care, wound care and women's health care. It also offers nutritional and over-the
counter pharmaceutical products. These products are distributed to individual
consumers, wholesalers or directly to independent and chain retail outlets. The
company offers baby care products through the Johnson's baby line of products. The
company markets the body wash and bath additives products under the brand name
AVEENO. The body wash products include positively radiant, daily moisturizing body
wash, advanced care body wash 10 OZ and skin relief body wash. Bath additives
include daily moisturizing foaming bath, daily moisturizing body wash, stress relief
The company markets deodorants under the brand name Bebe. It also offers the
soaps under the brand name Purpose, Vendome and Ambi.
Datamonitor (Published December 2009)
The major brands offered by J&J in skin care include Aveeno, Clean & Clear,
Johnson's adult, Neutrogena, RoC, Lubriderm, Beijing Dabao Cosmetics, and
Vendome product lines. The Oral Care products are offered under the Listerine and
Reach brand names. Major brands in the women’s health franchise are the Carefree
Pantiliners and Stayfree sanitary protection products.
The product lines of nutritional and over-the-counter include Splenda, No Calorie
Sweetener; Tylenol acetaminophen products; Sudafed cold, flu and allergy products;
Zyrtec allergy products; Motrin IB ibuprofen products; and Pepcid AC Acid Controller
from Johnson & Johnson Merck Consumer Pharmaceuticals.
The pharmaceutical segment produces and markets products in the following
therapeutic areas: anti-infective, antipsychotic, cardiovascular, contraceptive,
dermatology, gastrointestinal, hematology, immunology, neurology, oncology, pain
management, urology and virology. These products are distributed directly to
retailers, wholesalers and health care professionals.
The major brands marketed by the segment include Remicade (infliximab) for the
treatment of Crohn’s disease, ankylosing spondylitis, psoriasis, psoriatic arthritis,
ulcerative colitis, and use in the treatment of rheumatoid arthritis; Topamax
(topiramate), approved for adjunctive and monotherapy use in epilepsy, as well as for
the prophylactic treatment of migraines; and Procrit (Epoetinalfa, sold outside the US
as Eprex), to stimulate red blood cell production.
J&J also offers Risperdal oral (risperidone) for treatment of the symptoms of
schizophrenia, bipolar mania and irritability, Risperdal Consta (risperidone), a
longacting injectable, and Invega TM (paliperdone) Extended-Release tablets, for the
treatment of schizophrenia; Levaquin (levofloxacin) and Floxin (ofloxacin), both in the
anti-infective field.Furthermore, the company offers Concerta (methylphenidate HCl)
for the treatment of attention deficit hyperactivity disorder; Aciphex/Pariet, a proton
pump inhibitor comarketed with Eisa; and Duragesic/Fentanyl Transdermal (fentanyl
transdermal system, sold outside the US as Durogesic), a treatment for chronic pain
The medical devices and diagnostics segment offers a wide range of products used
principally in the professional fields of physicians, nurses, therapists, hospitals,
diagnostic laboratories and clinics. The products are distributed to wholesalers,
hospitals and retailers. The segment offers Cordis’ circulatory disease management
products; DePuy’s orthopaedic joint reconstruction, spinal care and sports medicine
products; Ethicon’s surgical care and women’s health products. It also offers Ethicon
Endo-Surgery’s minimally invasive surgical products; LifeScan’s blood glucose
monitoring and insulin delivery products; Ortho-Clinical Diagnostics’ professional
diagnostic products and Vistakon’s disposable contact lenses. The distribution to the
health care professional markets is undertaken both directly and through surgical
Datamonitor (Published December 2009)
The international business of J&J is conducted by subsidiaries located in 56 countries
The research facilities of J&J are located in the US, Belgium, Brazil, Canada, China,
France, Germany, India, Japan, the Netherlands, Singapore and the UK. The
company and its subsidiaries operate 147 manufacturing facilities. Of these, 61 are
located in the US, 35 in Europe, 16 in the Western Hemisphere (excluding the US)
and 35 in Africa, Asia and Pacific. In the US, eight facilities are used by the consumer
segment, 12 by the pharmaceutical segment and 41 by the medical devices and
Key Metrics
J&J generated revenues of $63.7 billion in the financial year (FY) ended December
2008, an increase of 4.3% over 2007. The company's net income totaled $12.9 billion
in FY2008, an increase of 22.4% over 2007.
During FY2008, the pharmaceutical segment recorded revenues of $24.6 billion, a
The medical devices and diagnostics segment recorded revenues of $23.1 billion, an
The US, Johnson & Johnson's largest geographical market, accounted for 50.7% of
the total revenues in FY2008. Revenues from the US reached $32.3 billion in 2008, a
Datamonitor (Published December 2009)
Key Financials: Johnson & Johnson
All in $ millions, except for employee numbers and margins
D A T A M O N I T O R Figure 5: Revenues & Profitability: Johnson & Johnson D A T A M O N I T O R
Datamonitor (Published December 2009)
7.2 Pfizer Key Facts: Pfizer Inc.
235 East 42nd Street, New York City 10017, New York, United States
Website: www.pfizer.com Financial Year-End:
D A T A M O N I T O R
Pfizer is engaged in developing, manufacturing and marketing of prescription
medicines for humans and animals. The company operates in more than 150
countries. Recently in October 2009, Pfizer completed the acquisition of Wyeth, a US-
based research driven big pharma company, for $68 billion.
The company operates through two business segments: pharmaceutical and animal
health. It also generates revenues from several other businesses including the
manufacture of gelatin capsules, contract manufacturing and bulk pharmaceutical
chemicals. As these businesses are small, they are grouped under 'corporate/other
The pharmaceutical segment includes Pfizer's products for the treatment for
cardiovascular and metabolic diseases; central nervous system disorders; arthritis
and pain; infectious and respiratory diseases; urogenital conditions; cancer; eye
disease; endocrine disorders; and allergies. The top products under this segment
include Lipitor (treatment of elevated cholesterol in the bloodstream), Norvasc
(treatment of hypertension and angina), Zoloft (anti-depressant for the treatment of
depression, panic disorder, obsessive-compulsive disorder in adults and children),
Celebrex (treatment of osteoarthritis, adult rheumatoid arthritis, acute pain and
menstrual pain), Neurontin (epilepsy medicine), Zithromax (treatment of certain types
of bronchitis and pneumonia, for sinusitis and for ear infection), Viagra (treatment of
erectile dysfunction), Bextra (arthritis medicine) and Xalatan (glaucoma medicine
used for the treatment of open-angle glaucoma and ocular hypertension).
Datamonitor (Published December 2009)
The animal health segment discovers, develops and sells products for the prevention
and treatment of diseases in livestock and companion animals. The products which
the company markets under this segment are parasiticides, anti-inflammatories,
vaccines, antibiotics and related medicines. The principal products under this
segment include Revolution (parasiticide for companion animals), Rimadyl (relieves
pain and inflammation associated with canine osteoarthritis and soft tissue orthopedic
surgery), and Clavamox/Synulox (antibiotic for skin and soft tissue infections in dogs
and cats). The company's vaccine portfolio for livestock includes RespiSureOne/
StellamuneOne (single-dose vaccine used to prevent pneumonia in swine), and Bovi-
Shield Gold (cattle vaccine for reproductive and respiratory protection).
With the acquisition of Wyeth, Pfizer now offers over-the-counter (OTC) drugs that
address a variety of health needs, such as muscle and body aches, allergies, colds
and coughs, and nutritional supplements. The key OTC brands include Advil, Alavert,
Anbesol, Caltrate, Centrum, Chapstick, Dimetapp, Preparation H, Robitussin and
Though Pfizer's global manufacturing division is based in the US, the company
operates plants in about 46 locations around the world. The company's major
facilities are located in Belgium, France, Germany, Ireland, Italy, Japan, Puerto Rico,
Key Metrics
Pfizer recorded revenues of $48.3 billion during the financial year (FY) ended
December 2008, a decrease of 0.3% over FY2007. The net income totaled $8.1
billion in FY2008, a decrease of 0.5% over FY2007.
The US, Pfizer's largest geographic market, accounted for 42.3% of the total
revenues in FY2008. Revenues from the US reached $20.4 billion in 2008, a
Key Financials: Pfizer Inc.
All in $ millions, except for employee numbers and margins
D A T A M O N I T O R
Datamonitor (Published December 2009)
Figure 6: Revenues & Profitability: Pfizer Inc. s n 40,000 D A T A M O N I T O R
Datamonitor (Published December 2009)
7.3 Schering-Plough Corporation Key Facts: Schering-Plough Corporation
2000 Galloping Hill Road, Kenilworth, New Jersey 07033 0530, United States
Website: www.schering-plough.com Financial Year-End:
D A T A M O N I T O R
Schering-Plough Corporation (Schering-Plough) engages in the discovery,
development, manufacturing and marketing of medical therapies and treatments. The
company also manufactures consumer and animal health products. Schering-Plough
has subsidiaries in more than 55 countries outside of the US. The company primarily
operates in the US, Europe and Canada. It is headquartered in Kenilworth, New
Schering-Plough operates through three segments: prescription pharmaceuticals,
consumer health care, and animal health.
The prescription pharmaceutical segment discovers, develops, manufactures and
markets human pharmaceutical products. The segment undertakes research projects
and markets products in the following six therapeutic areas: cardiovascular, central
nervous system, immunology and infectious disease, oncology, respiratory, and
For cardiovascular disease, the company offers Vytorin, a cholesterol-lowering tablet;
and Zetia, a novel cholesterol-absorption inhibitor. It also offers Integrilin Injection, a
platelet receptor GP IIb/IIIa inhibitor for the treatment of patients with acute coronary
syndrome and those undergoing percutaneous coronary intervention in the US, as
well as for the prevention of early myocardial infarction in patients with acute coronary
syndrome in most countries. Schering-Plough also offers Orgaran, a non-heparin
Datamonitor (Published December 2009)
For the central nervous system, Schering-Plough offers Remeron, an antidepressant;
Esmeron/Zemuron, a muscle relaxant used in surgical procedures; and Subutex, a
sublingual tablet formulation of buprenorphine. The company also offers Suboxone, a
sublingual tablet combination of buprenorphine and naloxone, in certain countries
outside the US for the treatment of opiate addiction. Furthermore, it offers Norcuron,
a muscle relaxant and Bridion (sugammadex), an anesthesia reversal agent.
For immunology and infectious disease, Schering-Plough offers Remicade, an anti-
TNF antibody outside of the US, Japan and certain Asian markets for the treatment of
inflammatory diseases; and Pegintron Powder for Injection, a pegylated interferon
product for chronic hepatitis C. It also offers Rebetol Capsules for use in combination
with Pegintron or Intron A for treating hepatitis C; Avelox, which Schering-Plough only
markets in the US, a broad-spectrum fluoroquinolone antibiotic for certain respiratory
and skin infections; and Noxafil Oral Suspension, for prophylaxis (prevention) of
invasive fungal infections in high-risk patients and the treatment of oropharyngeal
For oncology, the company offers Temodar/Temodal for certain types of brain tumors;
Caelyx, a long-circulating pegylated liposomal formulation of the cancer drug
doxorubicin; and Intron A injection, marketed for chronic hepatitis B and C and
numerous anticancer indications worldwide, including as adjuvant therapy for
For respiratory problems, Schering-Plough offers Nasonex, a nasal-inhaled steroid for
nasal allergy symptoms; and Clarinex/Aerius/Claritin Rx, a non-sedating
antihistamine for the treatment of allergic rhinitis. It also offers Foradil Aerolizer, a
long-acting beta2-agonist marketed by Schering-Plough in the US for the
maintenance treatment of asthma and chronic obstructive pulmonary disease, and for
the acute revention of exercise-induced bronchospasm. Furthermore, the company
also offers Asmanex Twisthaler, an oral dry-powder corticosteroid inhaler for first-line
maintenance treatment of asthma; and Proventil HFA (albuterol) inhalation aerosol.
Schering-Plough offers a number of products for women’s health. They include
Follistim/Puregon, a fertility treatment; Livial, a menopausal therapy;
Marvelon/Desogen, a low-dose combined oral contraceptive. The company also
offers Mercilon, a low-dose combined oral contraceptive; Cerazette, a progestin only
oral contraceptive; and Implanon, a single-rod subdermal contraceptive implant.
The animal health segment discovers, develops, manufactures and markets animal
health products, including vaccines. The products marketed by the segment include
livestock products, poultry products, companion animal products and aquaculture
Datamonitor (Published December 2009)
The consumer health care segment develops, manufactures and markets over-the-
counter (OTC), foot care and sun care products. The OTC products offered comprise
Claritin non-sedating antihistamines; Miralax treatment for occasional constipation;
Coricidin HBP decongestant-free cold/flu medicine for people with high blood
pressure; Afrin nasal decongestant spray; and Correctol laxative tablets.
The foot care product line consists of DR. Scholl’s foot care products; Lotrimin topical
antifungal products; and Tinactin topical antifungal products and foot and sneaker
The suncare products offered consist of Coppertone sun care lotions, sprays, dry oils
and lip-protection products and sunless tanning products. It also includes Solarcaine
The company operates in Canada through Schering-Plough Canada. It offers a
variety of sun care products under the Coppertone brand. The product line comprises
general protection products, special skin care products, products for babies and kids,
products for sports/active living, continuous spray products, and sunless and after-
sun products. Schering-Plough Canada also offers sunburn relief products under the
Key Metrics
Schering-Plough generated revenues of $18.5 billion in the financial year (FY) ended
December 2008, an increase of 45.8% over 2007. The company's net income totaled
$1.9 billion in FY2008, as compared to a net loss of $1.5 billion in 2007.
The consumer health care segment recorded revenues of $1.3 billion in FY2008, an
The US accounted for 30% of the total revenues in FY2008. Revenues from the US
reached $5.6 billion in 2008, an increase of 20.9% over 2007.
Table 10: Key Financials: Schering-Plough Corporation
All in $ millions, except for employee numbers and margins
D A T A M O N I T O R
Datamonitor (Published December 2009)
Figure 7: Revenues & Profitability: Schering-Plough Corporation D A T A M O N I T O R
Datamonitor (Published December 2009)
CHAPTER 8 DISTRIBUTION
Pharmacies and drugstores form a leading distribution channel in the United States
OTC pharmaceuticals market, accounting for 59.3% of the total value.
Supermarkets and hypermarkets account for a further 34.9% of the market's value.
Table 11: United States OTC Pharmaceuticals Distribution: % Share, by Value, 2008
Channel %
Other 2.50% Total 100.0%
D A T A M O N I T O R Figure 8: United States OTC Pharmaceuticals Distribution: % Share, by Value, 2008 D A T A M O N I T O R
Datamonitor (Published December 2009)
CHAPTER 9 MARKET FORECASTS Market Value Forecast
In 2013, the United States OTC pharmaceuticals market is forecast to have a value of
$27.3 billion, an increase of 15.8% since 2008.
The compound annual growth rate of the market in the period 2008-2013 is predicted
Table 12: United States OTC Pharmaceuticals Market Value Forecast: $ billion, 2008-2013 $ billion $ billion CAGR, 2008-2013: D A T A M O N I T O R Figure 9: United States OTC Pharmaceuticals Market Value Forecast: $ billion, 2008-2013 D A T A M O N I T O R
Datamonitor (Published December 2009)
CHAPTER 10 MACROECONOMIC INDICATORS Table 13: United States Size of Population (million) , 2004-2008
Year Population (million) D A T A M O N I T O R Table 14: United States GDP (Constant 2000 Prices, $ billion), 2004-2008 Constant 2000 Prices, $ billion D A T A M O N I T O R Table 15: United States Inflation, 2004-2008
Year Inflation
2004 2.72005 3.42006 3.22007 2.82008 4.3
D A T A M O N I T O R
Datamonitor (Published December 2009)
CHAPTER 11 APPENDIX 11.1 Methodology
Datamonitor Industry Profiles draw on extensive primary and secondary research, all
aggregated, analyzed, and cross-checked and presented in a consistent and
Review of in-house databases – Created using 250,000+ industry interviews and
consumer surveys and supported by analysis from industry experts using highly
complex modeling & forecasting tools, Datamonitor’s in-house databases provide the
foundation for all related industry profiles
Preparatory research – We also maintain extensive in-house databases of news,
analyst commentary, company profiles and macroeconomic & demographic
information, which enable our researchers to build an accurate market overview
Definitions – Market definitions are standardized to allow comparison from country to
country. The parameters of each definition are carefully reviewed at the start of the
research process to ensure they match the requirements of both the market and our
Extensive secondary research activities ensure we are always fully up-to-date with
Datamonitor aggregates and analyzes a number of secondary information sources,
National and International trade associations
Business information libraries and databases
Modeling & forecasting tools – Datamonitor has developed powerful tools that
allow quantitative and qualitative data to be combined with related macroeconomic
and demographic drivers to create market models and forecasts, which can then be
refined according to specific competitive, regulatory and demand-related factors
Continuous quality control ensures that our processes and profiles remain focused,
Datamonitor (Published December 2009)
11.2 Industry Associations Consumer Healthcare Products Association 900 19th Street, NW, Suite 700, Washington, DC 20006, USA Tel: 1 202 429 9260 Fax: 1 202 429 9260 http://www.chpa-info.org 11.3 Related Datamonitor Research Datamonitor Industry Profiles
OTC Pharmaceuticals in the United Kingdom
Datamonitor (Published December 2009)
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OTC Pharmaceuticals in 
ABOUT DATAMONITOR 
EXECUTIVE SUMMARY 
TABLE OF CONTENTS 
CHAPTER 1 
1.3 Market 
CHAPTER 2 
CHAPTER 3 
CHAPTER 4 
CHAPTER 5 
CHAPTER 6 
Buyers tend to integrate backward in this market but this is not common. However,
when such integration takes place, it increases pressure on market players,
increasing buyer power at the same time. Overall buyer power is moderate.
Suppliers to the OTC pharmaceutical market are mainly manufacturers of Active
Pharmaceutical Ingredients (API). Market players require a wide range of specialized
ingredients, which maintains supplier power.
However many large pharmaceutical companies have operations in chemical
manufacturing. For instance, Teva Pharmaceuticals manufactures a number of API
Merck & Co also has its own chemicals division. Smaller pharmaceutical companies
do not have the sufficient infrastructure to manufacture chemical ingredients
themselves, as they lack expertise and therefore are often heavily reliant upon API
Although some chemical manufacturers only supply to pharmaceutical companies,
many also supply to numerous industries and develop chemicals for food ingredients,
animal feed and ceramic material manufacturers, reducing their dependence on
revenues gained from pharmaceutical supply.
APIs are most often supplied to pharmaceutical companies under contractual
arrangements, increasing switching costs and enhancing the power of suppliers.
The OTC drugs market in the US involves a high level of specialization and expertise
with high upfront investment costs, making the market difficult to enter. The main
costs are incurred from extensive clinical trials.
Some OTC manufacturers invest in new product development which involves high
development costs from extensive clinical trials. Despite this, smaller firms are
prevalent in the market and can still achieve efficiency through collaborations with
larger firms which allows them to benefit from increased funds (in the form of
collaborative revenues), creating more innovation and research opportunities.
The most realistic entry method would be as a small generic drug firm; a much less
costly business model than developing branded drugs. However, in countries such as
the US for a medicine to be granted OTC status, it must have a wide safety margin
All countries have regulatory bodies that approve drugs for use such as the Food and
Drug Administration (FDA) in the US. There are opportunities for new companies in
over-the-counter drugs with the strong growth of the market.
Datamonitor (Published December 2009)
This is being fostered by an ageing population and by a global trend toward self
medication. In the pharmaceutical industry, product recalls can damage brand image
and issues over the safety of drugs can impact end users decision to purchase OTC
Even in this market where some products are highly important to the end user,
customer preferences can have a strong pull-through on manufacturers. However, it
is unusual for an OTC drug to be withdrawn from the market due to safety issues
although there have been a few instances.
For instance, in 2005, the FDA removed phenylpropanolamine, a decongestant, from
over the counter sale due to a study that found the drug caused increased risk of
Drugs often become over-the-counter by switching from a prescription drug which can
increase consumer confidence in the product. Overall the threat of new entrants is
Prescription drugs offer an obvious substitute to OTC pharmaceuticals, but these are
normally suited to treating more serious ailments, and thus largely fail to encroach
into the OTC market. Moreover most pharmaceutical companies produce both OTC
and prescription drugs, which diminishes any threat from this particular substitute.
Many consumers now use alternative medicines, like homeopathy but often in
conjunction with conventional medicine, thereby making them less threatening, and
Sustained use of alternative medicines instead of scientific preparations is often
linked with adherence to an alternative lifestyle, philosophy or political belief system,
Thus, while there is niche demand for such products, the majority of the populace is
unlikely to view alternative medicines as a viable alternative to OTC pharmaceuticals.
Overall the threat from substitutes is assessed as weak.
The OTC pharmaceutical market is witnessing increasing consolidation leading to
creation of bigger companies and more competition in the market.
These firms have typically high fixed costs, as drug research and development
requires continued investment. Exit barriers are fairly high as most companies that
manufacture OTC drugs are focused on the pharmaceutical market and are similar to
Datamonitor (Published December 2009)
There are some personal care companies in operation, involved in the OTC drugs
market or even in prescription pharmaceuticals, and the differentiation of products
mean that exit barriers are lower. For example, Reckitt Benckiser owns the Nurofen
and Strepsils brand after acquiring Boots Healthcare International and is also
primarily involved in the production and distribution of household cleaning and
personal care products. In this market, manufacturers can differentiate by
demonstrating a drug that has a greater clinical benefit than another and also through
a strong brand image. For example, Ibuprofen is a popular painkiller but Nurofen is
the best known brand which has achieved strong sales.
Sales growth has been sustained by innovation and extensions to the product, for
example the production of Nurofen fast relief. The growth in this market mitigates
rivalry somewhat. Overall, rivalry with respect to the OTC drugs market is moderate.
Datamonitor (Published December 2009)
CHAPTER 7 
The major brands offered by J&J in skin care include Aveeno, Clean & Clear,
Johnson's adult, Neutrogena, RoC, Lubriderm, Beijing Dabao Cosmetics, and
Vendome product lines. The Oral Care products are offered under the Listerine and
Reach brand names. Major brands in the women’s health franchise are the Carefree
Pantiliners and Stayfree sanitary protection products.
The product lines of nutritional and over-the-counter include Splenda, No Calorie
Sweetener; Tylenol acetaminophen products; Sudafed cold, flu and allergy products;
Zyrtec allergy products; Motrin IB ibuprofen products; and Pepcid AC Acid Controller
from Johnson & Johnson Merck Consumer Pharmaceuticals.
The pharmaceutical segment produces and markets products in the following
therapeutic areas: anti-infective, antipsychotic, cardiovascular, contraceptive,
dermatology, gastrointestinal, hematology, immunology, neurology, oncology, pain
management, urology and virology. These products are distributed directly to
retailers, wholesalers and health care professionals.
The major brands marketed by the segment include Remicade (infliximab) for the
treatment of Crohn’s disease, ankylosing spondylitis, psoriasis, psoriatic arthritis,
ulcerative colitis, and use in the treatment of rheumatoid arthritis; Topamax
(topiramate), approved for adjunctive and monotherapy use in epilepsy, as well as for
the prophylactic treatment of migraines; and Procrit (Epoetinalfa, sold outside the US
as Eprex), to stimulate red blood cell production.
J&J also offers Risperdal oral (risperidone) for treatment of the symptoms of
schizophrenia, bipolar mania and irritability, Risperdal Consta (risperidone), a
longacting injectable, and Invega TM (paliperdone) Extended-Release tablets, for the
treatment of schizophrenia; Levaquin (levofloxacin) and Floxin (ofloxacin), both in the
anti-infective field.Furthermore, the company offers Concerta (methylphenidate HCl)
for the treatment of attention deficit hyperactivity disorder; Aciphex/Pariet, a proton
pump inhibitor comarketed with Eisa; and Duragesic/Fentanyl Transdermal (fentanyl
transdermal system, sold outside the US as Durogesic), a treatment for chronic pain
The medical devices and diagnostics segment offers a wide range of products used
principally in the professional fields of physicians, nurses, therapists, hospitals,
diagnostic laboratories and clinics. The products are distributed to wholesalers,
hospitals and retailers. The segment offers Cordis’ circulatory disease management
products; DePuy’s orthopaedic joint reconstruction, spinal care and sports medicine
products; Ethicon’s surgical care and women’s health products. It also offers Ethicon
Endo-Surgery’s minimally invasive surgical products; LifeScan’s blood glucose
monitoring and insulin delivery products; Ortho-Clinical Diagnostics’ professional
diagnostic products and Vistakon’s disposable contact lenses. The distribution to the
health care professional markets is undertaken both directly and through surgical
Datamonitor (Published December 2009)
The international business of J&J is conducted by subsidiaries located in 56 countries
The research facilities of J&J are located in the US, Belgium, Brazil, Canada, China,
France, Germany, India, Japan, the Netherlands, Singapore and the UK. The
company and its subsidiaries operate 147 manufacturing facilities. Of these, 61 are
located in the US, 35 in Europe, 16 in the Western Hemisphere (excluding the US)
and 35 in Africa, Asia and Pacific. In the US, eight facilities are used by the consumer
segment, 12 by the pharmaceutical segment and 41 by the medical devices and
Key Metrics 
Key Financials: Johnson & Johnson 
7.2 Pfizer 
The animal health segment discovers, develops and sells products for the prevention
and treatment of diseases in livestock and companion animals. The products which
the company markets under this segment are parasiticides, anti-inflammatories,
vaccines, antibiotics and related medicines. The principal products under this
segment include Revolution (parasiticide for companion animals), Rimadyl (relieves
pain and inflammation associated with canine osteoarthritis and soft tissue orthopedic
surgery), and Clavamox/Synulox (antibiotic for skin and soft tissue infections in dogs
and cats). The company's vaccine portfolio for livestock includes RespiSureOne/
StellamuneOne (single-dose vaccine used to prevent pneumonia in swine), and Bovi-
Shield Gold (cattle vaccine for reproductive and respiratory protection).
With the acquisition of Wyeth, Pfizer now offers over-the-counter (OTC) drugs that
address a variety of health needs, such as muscle and body aches, allergies, colds
and coughs, and nutritional supplements. The key OTC brands include Advil, Alavert,
Anbesol, Caltrate, Centrum, Chapstick, Dimetapp, Preparation H, Robitussin and
Though Pfizer's global manufacturing division is based in the US, the company
operates plants in about 46 locations around the world. The company's major
facilities are located in Belgium, France, Germany, Ireland, Italy, Japan, Puerto Rico,
Key Metrics 
Figure 6: 
7.3 Schering-Plough 
For the central nervous system, Schering-Plough offers Remeron, an antidepressant;
Esmeron/Zemuron, a muscle relaxant used in surgical procedures; and Subutex, a
sublingual tablet formulation of buprenorphine. The company also offers Suboxone, a
sublingual tablet combination of buprenorphine and naloxone, in certain countries
outside the US for the treatment of opiate addiction. Furthermore, it offers Norcuron,
a muscle relaxant and Bridion (sugammadex), an anesthesia reversal agent.
For immunology and infectious disease, Schering-Plough offers Remicade, an anti-
TNF antibody outside of the US, Japan and certain Asian markets for the treatment of
inflammatory diseases; and Pegintron Powder for Injection, a pegylated interferon
product for chronic hepatitis C. It also offers Rebetol Capsules for use in combination
with Pegintron or Intron A for treating hepatitis C; Avelox, which Schering-Plough only
markets in the US, a broad-spectrum fluoroquinolone antibiotic for certain respiratory
and skin infections; and Noxafil Oral Suspension, for prophylaxis (prevention) of
invasive fungal infections in high-risk patients and the treatment of oropharyngeal
For oncology, the company offers Temodar/Temodal for certain types of brain tumors;
Caelyx, a long-circulating pegylated liposomal formulation of the cancer drug
doxorubicin; and Intron A injection, marketed for chronic hepatitis B and C and
numerous anticancer indications worldwide, including as adjuvant therapy for
For respiratory problems, Schering-Plough offers Nasonex, a nasal-inhaled steroid for
nasal allergy symptoms; and Clarinex/Aerius/Claritin Rx, a non-sedating
antihistamine for the treatment of allergic rhinitis. It also offers Foradil Aerolizer, a
long-acting beta2-agonist marketed by Schering-Plough in the US for the
maintenance treatment of asthma and chronic obstructive pulmonary disease, and for
the acute revention of exercise-induced bronchospasm. Furthermore, the company
also offers Asmanex Twisthaler, an oral dry-powder corticosteroid inhaler for first-line
maintenance treatment of asthma; and Proventil HFA (albuterol) inhalation aerosol.
Schering-Plough offers a number of products for women’s health. They include
Follistim/Puregon, a fertility treatment; Livial, a menopausal therapy;
Marvelon/Desogen, a low-dose combined oral contraceptive. The company also
offers Mercilon, a low-dose combined oral contraceptive; Cerazette, a progestin only
oral contraceptive; and Implanon, a single-rod subdermal contraceptive implant.
The animal health segment discovers, develops, manufactures and markets animal
health products, including vaccines. The products marketed by the segment include
livestock products, poultry products, companion animal products and aquaculture
Datamonitor (Published December 2009)
The consumer health care segment develops, manufactures and markets over-the-
counter (OTC), foot care and sun care products. The OTC products offered comprise
Claritin non-sedating antihistamines; Miralax treatment for occasional constipation;
Coricidin HBP decongestant-free cold/flu medicine for people with high blood
pressure; Afrin nasal decongestant spray; and Correctol laxative tablets.
The foot care product line consists of DR. Scholl’s foot care products; Lotrimin topical
antifungal products; and Tinactin topical antifungal products and foot and sneaker
The suncare products offered consist of Coppertone sun care lotions, sprays, dry oils
and lip-protection products and sunless tanning products. It also includes Solarcaine
The company operates in Canada through Schering-Plough Canada. It offers a
variety of sun care products under the Coppertone brand. The product line comprises
general protection products, special skin care products, products for babies and kids,
products for sports/active living, continuous spray products, and sunless and after-
sun products. Schering-Plough Canada also offers sunburn relief products under the
Key Metrics 
Figure 7: 
CHAPTER 8 
CHAPTER 9 
CHAPTER 10 MACROECONOMIC INDICATORS 
CHAPTER 11 
11.2 Industry