PSE RULES GIVE RETAILERS HEADACHE

WENDY TOTH / DAN ALAIMO

WASHINGTON - As retailers prepare for final sales restrictions on cough and cold medicines containing pseudoephedrine that go into effect at the end of this week, the compound that replaced it on store shelves has come under fire as "ineffective."

In a letter to the editor published in the July issue of the Journal of Allergy and Clinical Immunology, Leslie Hendeles and Randy C. Hatton, pharmacists at the University of Florida, cited research that they said shows phenylephrine isn't sufficiently absorbed into the bloodstream, making it an ineffective oral medication.

"Phenylephrine, at the [Food and Drug Administration]-approved dose of 10 mg for adults, is unlikely to provide relief of nasal congestion," the letter said.

The news stories about the research hit last month, and on Aug. 23, Rep. Henry Waxman, D-Calif., wrote the FDA asking it to review whether PE is comparable to PSE.

Retailers and wholesalers interviewed this month in Dallas at the Health and Beauty Care Marketing Conference of GMDC, Colorado Springs, said it was too early to tell if the spate of negative publicity hurt sales, but many expressed concern about the ingredient's effectiveness.

"If PE were the best ingredient for these OTC products, it would have been in the formulation all along, as opposed to PSE," said Al Jones, senior vice president, procurement and merchandising, Imperial Distributors, Auburn, Mass.

PE predates PSE, and when PSE became available, "the brands retaining PE became obsolete," one nonfood executive with a California chain told SN.

Private-label manufacturer Perrigo, Allegan, Mich., has stated to the investment community that PE is not as effective as PSE, spokesman Arthur J. Shannon told SN. "The reformulations with PE are solid products, but when compared to PSE they are not as effective."

Price Chopper Supermarkets, Schenectady, N.Y., hasn't seen a dramatic shift in sales, however. "I don't think the products have been out long enough for consumers to know whether they are working or not working," said Jack Serota, vice president, GM/HBC.

"We have heard from some of our customers that the products are not as effective," said Christina Melillo, non-perishable merchandiser, Buehler's Food Markets, Wooster, Ohio. The marketing, and research and development behind the PE products is going to get better, she said, and in the meantime, Buehler's will continue to carry PSE products behind the counter.

In a statement issued in response to the July letter to the editor, the Consumer Healthcare Products Association here said, "In 1976, FDA issued the report of an advisory committee of outside experts where the committee completed an extensive review of phenylephrine and concluded that it is safe and effective for over-the-counter use. à No new data has been presented that disputes the FDA's conclusion."

PE has been available as a nasal decongestant for decades, association spokeswoman Elizabeth Assey said. "Our member companies want to preserve consumer choice and promote an alternative in the case that they can't get the medications they would normally purchase." FDA last month approved a new effervescent formulation type of phenylephrine, Assey said.

Pfizer, New York, maker of Sudafed PE, and Johnson & Johnson, New Brunswick, N.J., maker of Tylenol Cold Cool Burst, which contains PE, are both member companies.

CONVENIENCE FACTOR

While it seems that the ingredients aren't equals, the convenience factor means sales aren't dying, retailers and wholesalers told SN.

"We've been surprised initially with the willingness of the consumer to easily make the transition to PE products," said Tony Harrington, program manager, HBC, Topco Associates, Skokie, Ill. "A lot of that has to do with the fact that it is all there is on the shelf."

"I know the dosage is different," said a nonfood executive with a Southeastern retailer. "But at the end of the day, it provides the consumer who needs something for treatment an offering that we otherwise would not have because of the change brought on by the legislation."

Mike Forrest, HBC category manager, Brookshire Brothers, Lufkin, Texas, agreed. "Changing over from PSE to PE, we haven't seen a decrease in sales as of yet."

Sales of Sudafed cold, allergy and sinus tablets and packets are down 55.3% to $13.9 million in supermarkets, drug stores and mass merchandise outlets, excluding Wal-Mart, for the calendar year ending Aug. 13, according to Information Resources Inc., Chicago.

Sales of Sudafed PE cold, allergy and sinus tablets and packets are up 697.7% to $47 million for the same period, according to IRI.

"Consumers are not understanding that Sudafed PE is not the same as Sudafed, and that's part of the reason Sudafed PE is selling so well," Imperial's Jones said.

However, with cold season coming, "we may see a change. The truth of the matter is PE doesn't last nearly as long and it is not as good of a product," Forrest said.

Since the start of legislation, sales on PSE products have been down at Ingles Markets, Asheville, N.C., said Dan Spears, director, HBC/GM. "I don't think that the non-PSE products will catch up with sales," he said.

"The pseudoephedrine products were created for a reason, and that was because it worked. I think it is sad that people who depended on a pseudoephedrine product now have to take something that obviously doesn't work as well in treating their symptoms," Spears said.

Even if that is the case, the category isn't in serious jeopardy, the nonfood executive with a California chain told SN. "We had some municipalities that enacted laws well before the current federal law, and our PSE product went from about 60% of total sales in the category to about 38% of the total. So that is still a fairly good piece of the business in the cough and cold category," he said.

PE has been used in reformulations of over-the-counter cough, cold and allergy medications since early 2005 when PSE was increasingly being restricted by state laws. The federal Combat Methamphetamine Act passed as part of the Patriot Act renewal in March 2006.

In an attempt to keep criminals from using OTC medicines in the illegal manufacture of methamphetamine, the act imposed initial retail sales restrictions on the ingredient pseudoephedrine, limiting the amount that could be purchased, beginning in April of this year.

On Sept. 30, the final provisions of the act go into effect at retail, including employee training on PSE sales restrictions, as well as product placement behind pharmacy counters or locked cases, and customer identification and logbook requirements.

FMI Launches Online 'Combat Meth' Training

WASHINGTON - The Food Marketing Institute launched an online program for supermarkets to meet the training requirement of the Combat Methamphetamine Act, FMI reported this month.

However, the law's timing will pose a challenge to retailers, according to Tim Hammonds, FMI president and chief executive officer. The Drug Enforcement Administration published the law's full regulations on Sept. 19 and the law goes into effect Sept. 30.

"It is outrageous that the DEA issued the rules to implement the Combat Meth Act only 10 days before the law takes full effect. The agency must give the industry a reasonable grace period to understand all the requirements of this statute and comply with it," he said.

FMI developed this program to give supermarkets a fast and effective way to comply with DEA training requirements and automatically maintain records, showing the associates have been trained, he said. "Associates can complete the entire course in about 10 minutes and learn what they need to know, whether they are checkers, clerks or pharmacists."