Internal and External OTC Market Forces Impact Industry Growth

 

The U.S. OTC market overall experienced 2.0% growth in 2017
The U.S. OTC market overall experienced 2.0% growth in 2017

The U.S. OTC market overall experienced 2.0% growth in 2017 with upper respiratory and topical products classes posting higher than average gains, according to Kline’s Nonprescription Drugs USA 2017 annual market study. “A strong cold and flu season in both Q1 and Q4 of 2017 drove the OTC cold and sinus market up 4.5% from 2016 levels,” says Laura Mahecha, Industry Manager for Kline’s Healthcare Practice. The topical products class posted 3.6% growth in 2017, driven by strong gains for OTC topical analgesics. “Lidocane line extensions have propelled strong double-digit growth for the second year in a row in the topical analgesics category,” adds Mahecha. The OTC eye care and diaper rash categories also had solid growth in 2017. However, many other stalwart OTC categories experienced very low or no growth in 2017. Nutritionals, digestives, and sleep aids all had flat or no growth while OTC pain relievers were up only 1.5% in 2017.

“Various factors are simultaneously converging on the industry leading to stagnant growth,” says Mahecha. “First, consumers are seeking a more holistic and natural approach to health from organic foods, to exercise, and use of more natural, less synthetic products. Second, e-commerce is a growing channel for OTC sales, and this channel has placed negative price pressure on brands with transparency and comparison shopping easier than ever. Third, new and seemingly endless sources of competition for OTC brands continue to impact the market from whole foods, to herbal and nutritional supplements, to devices, to natural OTCs, to probiotics. All of these factors makes driving dollar growth for traditional OTC brands challenging and unpredictable.” Limited Rx-to-OTC switch activity, new OTC launches, and advertising for OTCs have also curbed sales gains for the industry.

Being informed about market trends, competitors, and market adjacencies that may disrupt the market are even more crucial during lean growth periods. Kline’s Nonprescription Drugs USA study offers comprehensive analysis of the OTC market with five-year historical sales and trends, sales and share for hundreds of OTC brands and private-label products, analysis of marketing activity and new products, regulatory developments, and a five-year sales forecast complete with assumptions and reasoning. This well-regarded study keeps you informed with an interactive database that allows you to export data to Excel in addition to an insightful written report on 22 OTC categories, 11 major companies, and an executive summary rich with insights and actionable recommendations. Kline’s other Healthcare offerings, including Natural OTCs, Digestive Health, Immunity and Probiotics, Amalgam OTCs, Rx-to-OTC Switch: Next Frontier, Amalgam Nutritional Products, and Sleep Aids, offer a 360 degree view of the OTC market and adjacent products that can disrupt or impact traditional OTC growth. For more information please, contact us.