FORTUNE TELLING

DAVID VACZEK

For prognosticators looking into the future of over-the-counter switches for prescription drugs, the climate appears positive and the sun is shining on the crystal ball for more new products.

"We can look forward to the appearance of new, novel self-care technologies that will further empower the consumer such as non-sedating antihistamines, cholesterol-lowering drugs, topical steroids for allergy," said R. William Soller, senior vice president and director of science and technology, Nonprescription Drug Manufacturers Association, Washington, during the organization's annual meeting earlier this year in Colorado Springs, Colo.

With the switch process under the regulatory control of the Food and Drug Administration, nobody can say with certainty what the next hot Rx switch will be. Although some industry watchers are saying the flurry of new switch products of the last two years will abate somewhat.

But double-digit sales growth for years to come in recent switches, along with the market entry of more new OTC drugs, and new categories, insures Rx-to-OTCs will be a major sales and profit source. Community pharmacists, often the only professional intermediaries for self-treating customers, will strongly affect OTC sales, say supermarket chain officials.

New OTC medications for allergy, fungal infections, lowering cholesterol and even for removing wrinkles may soon be available to the aging population, say analysts.

The spate of OTC approvals since 1995, in NSAIDS (non-steroidal anti-inflammatory drugs), H2 antagonists, and smoking-cessation categories, will be a hard act to follow. But a new OTC category -- in nasal steroid sprays -- is already poised for market entry.

"We have seen a couple of big prescription categories where basically every brand in the category switched [i.e., H2 antagonists, analgesics, smoking cessation]. Now, with the exception of nasal steroids, we won't see whole categories switching. But there will [still] be a lot of new compounds coming out," said Susan Lavine-Coleman, president, NCI Consulting, Princeton, N.J.

OTC nasal steroids for treatment and prevention of allergic rhinitis will offer potent alternatives to antihistamines. Schering-Plough, Madison, N.J., is pursing an OTC approval for Vancenase AQ (beclomethasone dipropionate), a widely-used nasal steroid in prescription form. Glaxo-Wellcome, Durham, N.C., reportedly is also seeking approval for its Becanase AQ, which has the same active ingredient. McNeil Consumer Products, Fort Washington, Pa., wants the go ahead for an OTC version of Nasal Crom (cromolyn sodium), a non-steroidal medication also aimed at hay fever sufferers.

"[The nasal steroids] really have the potential to revolutionize allergic rhinitis treatment. They work better than any antihistamines by causing an end to symptoms as opposed to just suppressing them," said Lavine-Coleman, who expects to see FDA endorsement of an OTC nasal steroid product this year.

"Those would be blockbuster drugs," agrees Michael Roberts, director of pharmacy, Buttrey Food & Drug Co., Great Falls, Mont.

"They have been used for a long time now and pretty safely. The concern is going to be over their systemic [side] effects," said Roberts.

Anti-cholesterol drugs of the bile-acid sequestrant class would represent another new OTC category if they win endorsement as analysts expect. Questran from Bristol-Myers Squibb, New York, has "a very good likelihood of switching [by 1997]," said Kate Griffie, manager, health care practice, Kline & Co., Fairfield, N.J.

Looming within the next few years is an expected OTC version of Schering-Plough's top-selling non-sedating Rx antihistamine Claritin. "[Schering-Plough] is already inundating consumers with advertising (of the brand name prescription product). They'll ride the patent as long as they can and then start the clinical trials [for a proposed OTC version]," said Laura Mahecha, consultant, Kline & Co.

New York-based Pfizer has mounted a lot of direct-to-consumer advertising on diflucan, its one-day treatment regimen for vaginal yeast infection which had $390 million in Rx sales in 1995. Mahecha predicts the one-day treatments will emerge on OTC shelves to eclipse the three-day regimens first introduced with Procter & Gamble's launch of Femstat 3 in Dec. 1995.

Another potential OTC this year is Bactroban (mupirocin) a topical anti-infective from SmithKline Beecham Consumer Products, Pittsburgh, which "has a broader spectrum of activity against a range of bacteria than does Neosporin. I think they will be able to create the impression that it is a superior anti-infective," said Lavine-Colman.

Consumers have shown demand for recent switches. Antacid sales in food, drug, and mass merchant grew by 21.5% to $1.07 billion in calendar year 1995, according to Information Resources Inc., Chicago.

With Zantac 75 joining Pepcid AC and Tagamet HB in 1996, and Axid AR coming to market in May, antacid sales in the 52 weeks ended Aug. 11, 1996 grew 38.3% to $1.29 billion (38.6% in food stores) as consumers sought the first drugs available OTC for heartburn prevention.

"We have experienced a really strong track record with some of these switch products," says Dan Ramirez, vice president, pharmacy division, Wakefern Food Corp., Elizabeth, N.J.

Smoking-cessation products have produced "incredible sales" at the 110-pharmacy chain. "There was an impediment before in that the patient had to make a conscious effort to visit the physician and pay for an examination and follow up visit. Now consumers are saying at the drop of a hat 'I think I'll try that,' " said Ramirez.

Nicorette gum, and the Nicoderm and Nicotrol patches will likely be soon joined by another patch system, Habitrol, by Ciba Self Medication, Tarrytown, N.Y., which has filed an application with the FDA to take that product OTC, a company spokesman said.

Analysts expect as well to see a nasal spray formulation of Johnson & Johnson's Nicotrol in OTC form soon after the FDA in March approved an Rx form of the drug.

"The sales potential is fantastic for many of these switch products," agrees Raymond Morrow, director of pharmacy, Thrifty Foods, Burlington, Wash.

"The majority of customers know these products as Rx items, but didn't take advantage of them because of price. A lot of insurance companies don't cover smoking cessation, and its not a cheap process. People will try these [smoking-cessation products] at least once to see if it works for them," said Morrow.

OTC sales growth is fueled by sales of the newest switch products, which represent 80% of OTC sales growth, according to a report by the General Merchandise Distributors Council, Colorado Springs, Colo. What will those sales be?

Despite the large sales for retailers of the H2 antagonists, sales predictions have been excessive for that category, says Bob Ernsberger, an HBC consultant in Charlotte, N.C.

"This was predicted to be a billion-dollar business, and higher. Pepcid has been a roaring success -- by far the biggest seller -- with $250 million. [But] total H2 antagonist OTC sales are under $500 million," says Ernsberger.

"They have been great products. It's new-found money for retailers. But it's been over hyped," he says.

The traditional antacid vendors -- for example, Tums, Maalox and Mylanta -- mounted fierce advertising counter-offensives, beat back the threat, and recovered some ground, says Ernsberger.

"You'll see the traditional antacid sales dissipate over a period of time," Ernsberger predicts. "We lead stressful lives and people are having more and more gastric problems. Heartburn prevention with the H2 antagonists will be the wave of the future."

Cannibalization has occurred in analgesics resulting in limited sales growth despite the wealth of new OTC products. Analgesic sales in the 52-week period ended Aug. 11 grew only 2.4% to $2.7 billion (2.1% in food stores), according to IRI.

"There are too many products on the market already with very little differentiation. I would contend you probably didn't need Orudis and Actron," says Griffie, at Kline & Co.

Yet analgesics will be one of the growth segments for new products going forward, analysts say. The FDA on Oct. 9 denied a Bayer Corp. application for a new OTC NSAID, dexibuprofen, a molecule with "a fast onset of action" which would be a direct-to-OTC product with no prescription drug available, said a spokesperson.

"We are confident that the joint advisory committees' concerns can be addressed and that dexibuprofen will eventually be approved for OTC marketing," said Richard Frank, senior VP, Bayer Consumer Care Division, Morristown, N.J.

Rapid growth of new OTC segments, which now include hair loss, three-day anticandidal regimens and the first product for poison ivy prevention -- EnviroDerm's Ivy Block -- coupled with the emergence of new products and categories, will fuel sizeable growth ahead. Griffie predicts the OTC market, at $13 billion in 1995, will grow at a rate of 5% a year for the next five years.

"The products coming off prescription in the next three to five years represent billions of dollars of Rx sales going over to OTC status," said Ramirez.