The market for over-the-counter (OTC) medications is growing as more and more prescription medications make the switch. The “Rx-to-OTC switch” market is expected to reach $15B in the United States by 2015[i], with eight of the current top 20 OTC brands in Europe being the result of product switches[ii]. A recent report has identified $30B worth of potential Rx-to-OTC switches in a wide range of indications, from hypertension and COPD to high cholesterol[iii].
This brings benefits and challenges for both brands and consumers. The good news for consumers is that their medications are now more accessible and, often, more affordable. And pharmaceutical companies are glad for the opportunity to access more – potentially – brand loyal customers. So how does a shopper recognize that a new-to-market OTC product is right for him or her in the absence of a physician? Especially when both branded and generic products frequently make the OTC switch at the same time?
It’s now the consumer’s choice. Unless the medication was specifically recommended by a doctor, the shopper purchases the medication the same way they’d select any product on the pharmacy shelf.
This is a critical moment, the first moment of truth. The packaging and shelf displays are very important, because – in that moment – their messaging and graphics are all the information the consumer has to make a purchasing decision. The packaging must clearly communicate the necessary medication information that helps assure proper consumer self-selection. In past rejections of OTC switches, particularly those involving OTC statins, the FDA clearly identified improper self-selection during pre-market trials as a contributor to the rationale for rejection.
The package now becomes an effective communications tool to tell a compelling brand story as well as provide medication information. Once a consumer makes their medication choice, they tend to be very loyal to OTC brands. As stated in a PM360 article about “Successfully making the Rx-to-OTC switch”: “Many pharmaceutical brand managers marvel at the longevity of consumer brands due to the loyalty of the customer base. Loyal consumers are willing to pay a slightly higher price for a respected brand versus a competitor….price inelasticity and brand loyalty are driving a renewed effort for Rx-to-OTC switches in the industry.”
Medication packaging can play a role in building brand loyalty at both the first (purchasing the product) and second moments of truth (using the product). WestRock’s international research study, Packaging Matters, found that 64 percent of consumers have tried something new because the packaging caught their eye, and 41 percent of consumers report repeating a purchase because of the package. These statistics are important to keep in mind when considering a medication’s switch from Rx to OTC, as both package aesthetics and consumer-desired functionality may be addressed at that time.
A good experience with a medication package, including easy dosing and blister use, size, portability and convenience, can not only set a product apart from the competition but also help build a loyal customer.
[i] Pharma marketing and sales: When to make an Rx to OTC switch. Eye for Pharma. Jan 24, 2012.
[ii] Maximizing Rx-to-OTC Switch Potential. IMS Health. 2010. http://imshealth.com/deployedfiles/imshealth/Global/Content/Consumer%20Health/Static%20Files/RX_OTC_Switch_Flyer.pdf
[iii] New Francesco International Report Reveals $30 Billion of Fresh Opportunities for Rx-to-OTC Switch. Feb 10, 2013. http://www.pr.com/press-release/471785
As vice president, Global Strategic Marketing for WestRock Healthcare, David Dwyer drives the development of research-driven packaging innovations for pharmaceutical companies, retail pharmacies and patients. He was formerly with MERCK & Co. as a marketing director within the CNS Franchise. Prior to joining MERCK, David held marketing & sales roles of increasing responsibility with Schering-Plough, MedPointe Pharmaceuticals, & Carter-Wallace. David brings more than 16 years of comprehensive sales and marketing experience within a breadth of therapeutic categories (CNS, Psychiatry, Migraine, Allergy/Respiratory, and Ophthalmology). He is a graduate of The Ohio State University.