Market Research > Healthcare > OTC Drugs: U.S. Competitor Cost Structures

Market Research Reports: OTC Drugs

OTC Drugs: U.S. Competitor Cost Structures
Published July 2013
Base Years: 2010, 2011, and 2012
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  • Description
  • Regional Coverage: United States
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    DESCRIPTION

    An accurate and comprehensive examination of competitor cost structures of leading OTC marketers, focusing on key trends, developments, and business opportunities designed to:

    • Offer subscribers a benchmark for OTC industry cost structures
    • Understand how key competitors’ OTC cost structures compare to your own
    • Reveal profit and loss line items for each players’ OTC business and their largest OTC product classes
    • Understand the impact of product recalls on cost structures
    • Assess the cost positions of market leaders including Johnson & Johnson, Pfizer, Bayer Group, and GlaxoSmithKline
    • Give subscribers critical insights in order to succeed in the face of intensifying cost pressures
    • Provide an appraisal of expected future performance
  • Contents
  • TABLE OF CONTENTS  
     
    Introduction

    Executive Summary
      State of the industry

      Impacts on the industry from major shifts in costs for OTC players recently

      Market sales and growth

      Industry cost structure

      Key factors influencing profitability

      Analysis of key expenses

      Competitive landscape/ impact of mergers on costs structures

      Product class cost structures (for those listed in Table 1)

      Appraisal and Outlook

    Company Profiles
    For each of the companies profiled (listed in Table 2 below), the report provides information on profitability for its OTC business unit and leading product classes (illustrated in Table 3 below) and includes:
      Corporate overview

      Corporate sales and profits

      Business unit cost structure
      – Profitability
      – Analysis of key expenses

      Cost structure of leading product classes

      Appraisal

     


    Table 1: Product Classes Covered
  • Allergy, asthma,
    and sinus medications
  • Nutritional products
  • Cough and cold preparations
  • Topical products
  • Digestive products
  • Other products, including home
    diagnostic test kits, sleeping
    aids, smoking cessation aids,
    and weight loss medications
  • Feminine products
  • Internal analgesics



  • Table 2: Companies Profiled
  • Bayer Group
  • Pfizer
  • GlaxoSmithKline
  • Prestige Brands
  • Johnson & Johnson
  • Procter & Gamble
  • Merck
  • Reckitt Benckiser
  • Novartis
  • Sanofi
  • Perrigo


  • Table 3: Cost Structure of the OTC Industry
    Line item % Of net sales
    NET SALES
    COST OF GOODS SOLD
    Raw Materials
    Packaging
    Processing
    Overhead
    Total
    GROSS MARGIN
    MARKETING EXPENSE
    Promotion
    Trade
    Consumer
    Total
    Advertising
    Marketing department
    Sales force/sampling
    Distribution
    Total
    MARGIN AFTER MARKETING EXPENSES
    OTHER OPERATING EXPENSES
    Administration
    Research and development
    Total
    OPERATING MARGIN
  • Scope
  • OTC Drugs: U.S. Competitor Cost Structures has been successfully completed eight times before and was last published in September 2010. The report presents information on the financial performance, profitability, and costs structures of the 11 leading OTC companies in the United States. It is designed to help OTC pharmaceutical companies benchmark their cost structures with those of their competitors. For each company, cost breakdowns are provided for its overall OTC business, as well as its leading product classes.

    Company profiles also feature overviews of each company's OTC business unit, an assessment of domestic OTC sales by product class, and analysis of costs, expenses, and profitability.

    Cost structures refer to U.S. operations only. Sales, expenses, and profits are presented for 2010, 2011, and 2012 and do not include extraordinary or nonrecurring items reports in published financial statements. References to overall corporate results are for the latest fiscal year available.

  • Key Benefits
  • This study provides subscribers with accurate and concise profitability information and cost structures of 11 major OTC marketers in the United States. It is designed to help nonprescription drugs firms benchmark their cost structures with those of their competitors.

    Specifically, this report assists subscribers by providing:

    • Line-item detail to allow companies to benchmark their business against that of competitors
    • Details on how OTC marketers structure and run their operations
    • Insights into decisions companies have made regarding outsourcing, resource allocation, and product portfolios
    • Competitive intelligence that helps companies make decisions to take steps to lower costs
    • Important comparisons of marketers' cost structures between 2005 and 2008-2012 and understanding key shifts in costs over this timeframe for major OTC marketers
  • Methodology
  • Kline is unmatched in our ability to gather hard-to-get market and competitive intelligence with a high degree of confidence. Kline's approach relies heavily on primary research, employing the use of field and telephone interviews to capture insights and information from a wide range of industry experts and opinion leaders including:

    • Executives from OTC firms in functional areas such as finance, production, procurement, sales, marketing, distribution, and research and development
    • Suppliers of raw materials, packaging, and processing equipment
    • Service providers such as advertising agencies, logistics providers, contract manufacturers and packagers, and retailers/distributors
    • Key professionals specializing in manufacturing economics, packaging, chemicals, and technology assessment

    This report also draws upon nonconfidential data from Kline & Company's internal database, which contains nearly 40 years of syndicated research on the nonprescription drugs industry. The analysis is supplemented by secondary research, including a review of annual reports and other financial files and analyses. This approach has proven to be the most effective and reliable approach to obtaining accurate data and expert insights.

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