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Kline Study Shows Strong Growth in Specific Categories of the Nonprescription Drug Market

-- As consumers move to mass merchandisers and private labels, Rx-to-OTC switches, new products, and cold medication advertising keeps industry in the black --

LITTLE FALLS, NJ, June 28, 2007 – Under the surface of an apparently average year for nonprescription drug sales, a number of events produced significant activity in several categories, according to a study released last week by global management consulting and market research firm Kline & Company.

While the market grew at an overall rate of 2.6%, Rx-to-OTC switches like Plan B and Prilosec, new products in personal lubricants, and cold medications outperformed the market average by large margins, according to data in Nonprescription Drugs USA 2006.

“It’s a market where about one-third of the products are showing strong growth and the remaining -- mostly mature -- products are either flat or declining,” says Laura Mahecha, healthcare industry manager for Kline’s market research division. “Companies across the industry are working hard to mitigate the effects of consumer movement toward mass merchandisers and private label products.”

Barr Laboratories’ Plan B emergency contraceptive helped push contraceptive products up by 19.2% last year, Kline’s data shows. Despite its arrival late in the year, Plan B sold about $1 million in sales each week for the last six weeks of the year. Another Rx-to-OTC-switch product, Prilosec, grew by 23%, helping the large antacids and anti-gas product category to show 6.3% growth overall.

In new products, Johnson & Johnson’s many extensions of the KY Jelly line drove 11% growth in that category. J&J’s acquisition of Pfizer’s consumer healthcare division also made J&J nearly three times the size of its closest competitor, Wyeth.

Kline’s study shows that 4.2% growth in cold medications was largely driven by advertising and public education campaigns as marketers sought to mitigate the effects of pseudoephedrine legislation that put most of those products behind the counter in 2004 and 2005. “Our research shows the move behind the counter for PSE doesn’t seem to be much of a deterrent to consumers,” says Mahecha.

Kline has been publishing Nonprescription Drugs USA 2006 for nearly 40 years. The comprehensive annual report contains industry trends, brand sales, and market size data for 35 product categories, as well as detailed profiles for 15 leading OTC companies. Included in the report is an analysis of media spending, retail distribution, Rx-to-OTC-switch forecasts, and private-label activity.

About Kline & Company Established in 1959, Kline & Company, Inc. is a global management consulting and market research firm serving the consumer products, life sciences, chemicals and materials, and energy industries. Kline provides clients with practical business solutions derived from a distinctive combination of industry expertise, global reach, strategic consulting, and market research capabilities. Additional information is available at www.klinegroup.com.

For more information, contact:
Laura Mahecha
Industry Manager, Healthcare
Kline & Company 
+1-973-435-3446
laura_mahecha@klinegroup.com

Janice Kriegman
Manager, Marketing Communications
Kline & Company
+1-973-435-3440
janice_kriegman@klinegroup.com

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