Magazine article Drug Topics

Product Switches, New Rxs Fuel Gastric Relief Market

Magazine article Drug Topics

Product Switches, New Rxs Fuel Gastric Relief Market

Article excerpt

The gastric relief market is moving in an upward spiral. Revenues are expected to climb from $3 billion in 1989 to $5.4 billion in 1995, thanks in part to Rx-to-OTC switches and to new product introductions on the prescription side.

That's the forecast of POV Inc., a West Orange, N.J.-based business analysis firm that focuses on the health-care industry.

Breaking down the gastric relief market, POV reported that Rx products registered $2.2 billion revenues and over-the-counter items brought in $755 million in 1989. By 1995, Rxs should account for $4.2 billion and OTCs, for $1.2 billion.

Two kinds of OTCs: POV further segmented the nonprescription marketplace into ethical-heritage OTC products and consumer OTC products. Ethical-heritage products, which usually have an aluminum/magnesium hydroxide base, are those OTCs that manufacturers initially promoted to physicians and pharmacists. These products subsequently retained a semi-ethical drug image with the public. Consumer OTCs, which usually contain sodium and calcium carbonates, are those that were promoted primarily to the consumer market from the start.

The consumer OTC segment accounted for 58% of the total OTC sales in 1989; ethical-heritage OTCs brought in 42%. By 1995, the OTC market will be split evenly between consumer OTCs and ethical-heritage OTCs, with each segment accounting for $600 million of the OTC market.

According to POV, the prescription market showed annual increases of 38% in 1986, 28% in 1987, and 26% in 1988. As the market reaches a maturation point by the middle of the 1990s, the growth rate will slow to single digits. From 1992 to 1995, the Rx market will experience an annual growth rate of 8% to 9%. Although new products will be introduced on the Rx side, unit price will be sharply eroded by generic competition, and Rx-to-OTC switches will take volume away from the prescription area.

The nonprescription antacids market -- long considered a mature market -- is presently growing at a rate of 6% to 7% annually and will increase to an 8% to 9% growth rate from 1992 to 1995.

New Rxs in the pipeline: According to POV, 40 gastric relief products on the prescription side are currently in various stages of clinical testing, with at least 100 compounds in pre-clinical development. New product development in the Rx area has concentrated on improved dosing and more effective mechanism of action. Merck recently received approval for Losec, a proton pump inhibitor, the first of its kind on the market in the United States. The inhibitor halts the gastric drip before it gets into the stomach, explained Lawrence Schlegel, principal, POV.

Prescription technology is still evolving and addressing more effective methods of acid management, POV further noted. Research and development investments associated with new technology in this area exceed $300 million annually.

Technology in the OTC segment is more established. Primary performance characteristics in terms of neutralizing acid or coating sensitive tissue have not changed dramatically in recent years; products are primarily differentiated on the basis of secondary attributes revolving around their form, flavor, and perceived strength.

Line extensions have been introduced into the OTC market over the past few years. These items have an increased concentration of active ingredients, but, with reduced recommended dosage levels, they do not necessarily represent a therapeutic advance. Most of the further upheaval in the OTC market going into the 1990s will be wrought by Rx-to-OTC switches. …

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