RETAILERS ASK IF HIGH PRICE WILL OBSTRUCT NASALCROM

PETER MALBIN

Retailers are hoping that sales of Nasalcrom, a new over-the-counter allergy treatment, will be nothing to sneeze at this spring. But they are concerned that the relatively expensive nasal spray might force allergy sufferers to seek other remedies.

McNeil Consumer Products, Fort Washington, Pa., a division of Johnson & Johnson, switched Nasalcrom from prescription to OTC March 13 after it was cleared for OTC marketing by the Food and Drug Administration in January. A nasal spray that does not cause drowsiness, Nasalcrom is used for the prevention and relief of seasonal allergies, including sneezing, runny, itchy and stuffy noses.

"It's the first non-drowsy, non-addictive nasal spray to come OTC," noted David Spohr, health care category manager for Randalls Food Markets, Houston. "It's good news for the category." He added the big news for allergies will be when the widely used Allegra pills are available OTC, which he anticipates will be in about two years.

Nasalcrom is a "unique" allergy product, according to Wendy Mayan, a pharmacist at Bi-Lo Pharmacy in DuBois, Pa. "It stabilizes the mast cells, which prevents the histamine from being produced. It's a good product. It's just going to be expensive for people."

Shoppers have a choice of either a 13-ml bottle (providing 100 sprays), which Bi-Lo retails for $9.25, or a 26- ml bottle (200 sprays) that retailers will price at about $14.99. Bi-Lo merchandises Nasalcrom in the OTC section, 5 feet from the pharmacy.

"We've had it for a few weeks. I really don't think it's going to be a big mover," said Mayan. "If people used it when it was on prescription and had success with it, they may continue to use it. But with our insurance, they only had to pay a co-pay of $3 when it was available by prescription. That's a significant difference when you are talking about $14.99."

In order for the product to be effective, it has to be used on a regular basis, making it even more costly, she added.

"It is very expensive, especially for an asthmatic [who uses Nasalcrom]," agreed Michael Cantrell, a pharmacist at Rouse Supermarket, Morgan City, La. "If it goes big at OTC, I will be one very surprised individual. It wasn't selling well on prescription, so they [McNeil] moved it to OTC."

Nasalcrom is being widely launched to supermarkets, said a McNeil official. "In the early weeks of its launch, it is tracking similarly to other recent prescription-to-OTC switches such as Children's Motrin and Pepcid AC." McNeil wouldn't provide information on its marketing budget or merchandising strategy for the allergy product.

"The customers seem to be aware of it," said Don Schneider, the health and beauty care senior category manager for Price Chopper, Schenectady, N.Y. "We are stocking it in the allergy section right across the aisle from the pharmacy." He said the margins were "healthy."

The majority of supermarkets will stock the smaller size, commented Randall King, HBC buyer for Byrd Food Stores, Burlington, N.C. "We're getting ready to stock it. We haven't got it worked into our planograms yet. Allergy is a pretty good category. We have to review the category and work out where we are going to put it and what we are going to take out to put it in.

"It's a unique item right now as far as over-the-counter," King said. Byrd will position Nasalcrom in the analgesics/cough and cold section of the supermarket, which is about 8 to 12 linear feet. The pricing will be about $8.99, with margins about 18% to 20%.

Despite healthy margins, some supermarkets are concerned that Nasalcrom's high retail price may provoke pilferage. "We have a policy at most of our stores that we don't carry anything at that price range because it gets pilfered off the shelf," said Charles Page, HBC coordinator for Dixie Saving Stores, an independent wholesaler based in Chattanooga, Tenn., servicing 225 food stores.

"I had one market who called for it. I told him what the price would be if I had it, and he said he didn't want it. They should have cut the dosage. We could have sold it for $4.99 if the dosage had been lower," Page added.

Nonetheless, some industry observers say Nasalcrom will take off now that it is sold OTC. "There's the convenience factor to consider. A lot of people don't want to go to their doctor to get a prescription and would rather buy an over-the-counter medication," said Steve Lauder, health care category manager for Supervalu, Minneapolis.