Crowded INS market and mild cold and flu season lead to a soft year for upper respiratory OTCs

Findings from our upcoming Nonprescription Drugs USA study estimate sales of the upper respiratory OTC market in the United States at approximately $6.0 billion at the factory level, up 1.6% from 2015 sales.

Market shares by product category in 2016:


SOURCE: Kline’s Nonprescription Drugs USA 2016 study.

The upper respiratory market is complex, and each year, as more new products are introduced, it becomes even more so. Much of this complexity is rooted in the fact that colds, flus, and allergies all affect the upper respiratory system, and while each condition has symptoms that set themselves apart, sometimes these symptoms overlap each other. Colds and flus are caused by different viruses, and symptoms associated with flus are generally more severe. However, both illnesses can lead to runny, stuffy noses, congestion, coughs, and sore throats. Flus can also cause fever, headaches, fatigue, and aches/pains. Allergies, on the other hand, are not caused by a virus, but rather, are caused by allergens, which are something the body is allergic to. The same runny, stuffy nose can result, but unlike colds or flus, so can itchy, watery eyes.

To complicate the consumer’s buying process further, products in this class contain many different active ingredients that cover a range of indications, yet the key brands often contain some or all of the same ingredients. Moreover, brands in the upper respiratory product class have a large number of line extensions and flankers, often switching/adding not only indications, but active ingredients. For example, Reckitt Benckiser’s Mucinex is a market-leading cold medication brand, which contains guaifenesin as the only active ingredient in its flagship brand. However, Mucinex Nighttime Cold and Flu contains acetaminophen, diphenhydramine, and phenylephrine, but no guaifenesin.

All categories in the upper respiratory class post modest growth in 2016 with the exception of the nasal and topical decongestants market, which grows 6.0%. This category’s growth is driven by strong gains of Procter & Gamble’s Vicks Vapoinhaler and Bayer Group’s Afrin brands. Data tracking the severity of cold and flu seasons indicates that the 2016 cold/flu season was a mild season. Even so, leading cold medications brands, including Mucinex (Reckitt Benckiser), NyQuil (Procter & Gamble), Sudafed (Johnson & Johnson), and Theraflu (GlaxoSmithKline), all experience sales growth in 2016.

In the allergy market, there is modest growth as consumers are offered a plethora of new Rx-to-OTC switch brands, mostly in the inhaled nasal steroid segment, and the overall allergy market becomes even more crowded and competitive. Sales growth of the category is driven by leading allergy brands: Flonase Allergy Relief (GlaxoSmithKline), Zyrtec (Johnson & Johnson) and new Rhinocort Allergy 24HR (Johnson & Johnson), and ClariSpray Nasal Allergy Spray (Bayer Group). Additional switch brands have entered the market in 2017, including new oral switch allergy brand Xyzal (Sanofi) and Flonase Sensimist (GlaxoSmithKline). The possibility exists that even more brands will enter the OTC allergy market via Rx-to-OTC switch in the longer term. See Kline’s upcoming Rx-to-OTC Switch Forecasts USA: Next Frontier study for complete analyses and forecasts of future switches that are expected to enter the allergy category and nine others.

Join us for Kline’s free webinar on Key Issues Trending in the OTC Market on Tuesday, June 27, 2017 at 10:30 ET for an in-depth look at the upper respiratory and many other OTC markets, including probiotics, digestive health, and Rx-to-OTC switches.