Ground Rules for Successful Rx to OTC Switches in Europe?
“There is no doubt the ‘switching’ prescription only, medicines in order to create new consumer healthcare entities (Rx to OTC), is a strategy of choice among the major players in the global pharmaceutical industry. Pfizer, GlaxoSmithKline, Johnson and Johnson and Novartis are among the leaders in developing the ground rules for successful ‘switches’.
There is also considerable evidence to show that these companies evaluate the Rx to OTC healthcare opportunity fairly early in their prescription brand lifecycles”. So says James Dudley’s study “Rx to OTC Switching Strategies – Frameworks for Success” published by Scrip Reports in 2004.
Their successes have been in selecting OTC medicine variants in terms of indications and product forms for the consumer self-medication market well before patent expiry. Furthermore, the processes of ‘brand lifecycle management continue within the OTC healthcare environment as a primary strategy to expand opportunities through line extensions and new indications and product forms to maintain competitive advantage.
However, ‘switching’ prescription only medicines to OTC (Rx to OTC) presents a lifecycle management option only when a firm consumer healthcare opportunity can be identified. Even here, companies have developed different approaches to meet different marketing criteria to conform to different healthcare regulatory environments and to matching the culture of the end user expectations, especially in Europe.
These consumer, healthcare options range from ‘full blown’ consumer marketing driven OTC self-medication brands to extending non-prescription, semi-ethical access to consumers to otherwise doctor driven pharmaceutical brands.
“The arguments for and against Rx to OTC ‘switching’ need to be considered on a case by basis. This can only be achieved by scrutinizing the consumer healthcare opportunity and evaluating the costs and benefits afforded by different options including the timing of the ‘switch’” says James Dudley an expert in this area.
There is an increasing tendency among stakeholders to lobby for Rx to OTC ‘switches’ of relatively safe active ingredients in order to reduce prescribing costs or in the case of pharmacist associations to give them a larger commercial stake in the self-medication arena.
Furthermore, a new consumer focused self-medication industry is emerging that is hungry to innovate through new consumer healthcare brands and line extensions.
A number of these have already begun to initiate Rx to OTC ‘switches’ for drugs coming off patent for which they are not the original patent holder in Europe.
The threat of third party Rx to OTC ‘switching’ is beginning to become apparent in the USA. This factor needs to be included in the equations for both deciding to ‘switch’ and in its timing in relation to patent expiry.
Ultimately the issue is about whether a pharmaceutical active ingredient will make an attractive consumer healthcare proposition or not. If the answer is yes then the decision to ‘switch’ or not to ‘switch’ is about when and by whom. This means that companies will need to start planning brand Rx to OTC switches’ early enough within the period of patent protection to pre-empt the threat of third party ‘switches’, says James Dudley.
The report explores common factors contributing to the successful commercialization of Rx to OTC switches by analysis of a number of landmark case studies including: -
- The benefits of early life cycle Rx to OTC to switches as exemplified by Zovirax Cold Sore Cream in Europe
- Creating a greater opportunity with a consumer OTC positioning than that afforded by the pharmaceutical prescription sector for certain indications or product forms demonstrated by Lamisil AF Cream (Novartis)
- Creating a long-term intellectual property which provides both an earning stream and good will value as an asset in the OTC division as shown by McNeil’s switch of Imodium
- Continuing brand renewal and strategic line extensions to maintain leadership in the self-medication sector well after an Rx to OTC switch – Nurofen
This new study, “Rx to OTC Switching Strategies – Frameworks for Success” 2004, begins with an introduction to the role of Rx to OTC ‘switching’ in the life-cycle management of a prescription brand and explores the strategic options.
Chapter 2 outlines the success factors that have contributed to the development of major new prescription to OTC consumer healthcare brands. The report then takes the reader step by step down the pathway to developing a successful Rx to OTC ‘switch’ strategy.
Chapters 3 and 4 explore case studies to draw out key learnings and conclusions as a platform for successful strategy development Rx to OTC consumer self-medication brands. These case studies are based on the winning OTC brand strategies developed by Johnson and Johnson, Pfizer and Bayer.
Chapter 5 provides a summary of the differences between ‘switching’ in the USA and the major markets in Europe. It also uses case examples to show the value of the interchange of learning between the two regions.
The future drivers and new opportunities for Rx to OTC medicine ‘switches’ together with the need to explore new strategic approaches are explored in Chapter 6.
For details of this report visit http//www.medotceurope.com
· “Rx to OTC switches in the European consumer healthcare market case studies provide a diversity of success options”, says leading healthcare marketing consultant James Dudley
· “Imodium, Lamisil, Zovirax, Frenadol and Nurofen case studies provide of the most important learnings when it come to successfully switching prescription brands to OTC self-medication (Rx to OTC or POM to P)”, says leading consumer healthcare marketing strategist James Dudley
· “Rx to OTC switches, since 1984 in the European OTC self-medication market, contribute €1.4 billion to the European non-prescription pharmaceutical market. The top twenty ‘switched’ OTC healthcare brands in Europe account for over €650 million or 45% of the aggregated €1.4 billion sales. says James Dudley author of the new study “Rx to OTC Switching Strategies – Frameworks for Success” published by Scrip Reports in 2004
James Dudley is a leading marketing consultant in the European consumer health industry he is also author of several major strategic consultancy studies and market reports covering the OTC self-medication, non-prescription pharmaceutical and nutritional industries in Europe.
Note to editors
Medotceurope.com is James Dudley Management’s online bookshop for researchers seeking statistical information on OTC medicines, non-prescription pharmaceuticals and associated self-medication markets in Europe. Medotceurope.com also holds market information on the vitamins, minerals supplements (VMS) and tonics in Europe.