WHOLESALERS URGED TO ACT FAST ON SWITCHES

JANICE ZOELLER

LAKE BUENA VISTA, Fla. -- Drug wholesalers need to get information out about products that switch from prescription to over-the-counter status as soon as possible, said Ray Modjeski, senior vice president of trade development for Schering-Plough Healthcare Products, Liberty Corner, N.J.

Speaking at the National Wholesale Druggists Association's annual Marketing Conference held here March 6 to 10, Modjeski urged wholesalers to do more than just act as a warehouse. "Ship to retailers at the first possible date. Capitalize on automatic shipments by reminding retailers that Rx-to-OTC switches don't fail. Ask suppliers what's working and share success stories with customers. Provide merchandising help."

Prepare information that pharmacists can communicate to their patients, such as what a product is supposed to do, its indication, when and how to take it, how long it needs to be taken before the condition will improve, and what to do if the condition does not improve, suggested Modjeski.

He said that by 1996, thirty new switches are possible of the more than 50 that are currently pending at the Food and Drug Administration. Brand-name prescription products mentioned as potential switches by Modjeski included Dolobid, Feldene, Claritin, Hismanal, Nasalcrom, Pepcid, Indocin, Clinoril, Carafate, Tagamet, Zantac, Axid and Rogaine.

Retail sales of switch products totaled $5.2 billion in 1993, up from $4.4 billion in 1992, and he said they're expected to reach $14 billion in 1996 and $20 billion by the year 2000. A number of converging trends are driving this growth, said Modjeski. Among them: the rising cost of physician care and prescription drugs; patent expirations of prescription products; the widespread acceptance of self-medication with OTCs, and the aging of the population, which will add more people to the heaviest user group.

Profit margins on switch products are significantly higher than on more "commodity-type" brands, said Modjeski. "The gross margin on a traditional HBC product is 28%, compared with a switch product that is a good 10 [percentage] points higher."

Lou Schmidt, vice president of sales for Sandoz Consumer Products, East Hanover, N.J., who later joined Modjeski at the podium, said that while switches don't carry the same profitability as patented prescription products, it has to be considered that such products are "at the end of the product life cycle.

"Drug wholesalers can keep more of the switch business by doing it better," said Schmidt.