From Rx to OTC drugs: Challenges for marketing and sales

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From Rx to OTC drugs: Challenges for marketing and sales

In light of increasing patent expiration rates, a switch from Rx to OTC proves to be a successful counter-strategy against generic erosion. As a result, marketers face challenges entering a new competitive environment.

Global trends Upon patent expiry, pharmaceutical companies risk losing sales, highlighting the importance of implementing successful strategies for brand expansion. As a result, increased numbers of prescription drugs are being made available over the counter worldwide.

The Rx to OTC switch is a strategic option for extending a product’s revenue stream for pharmaceutical companies. The movement to switch drugs from prescription to OTC status is consistent with the increasingly prevalent model of the consumer’s central role in healthcare systems, and taking more control over their health.

Challenges to marketers The decision to switch from Rx to OTC is a real challenge. Transition to an OTC market not only poses a risk of devaluating an Rx product, but, more importantly, also places the brand in a new competitive environment, namely the consumer market. ‘Patients’ become ‘consumers’, while OTC medications face new challenges competing not only against other pharmacological formulations, but often also against other treatment solutions such as functional foods and nutritional products.

Bringing healthcare professionals and consumers together The success of your Rx to OTC switch relies on a collaborative care model, involving co-operation between consumers, pharmacists and physicians. In certain indication areas relatives or patient associations may play also an important role in influencing treatment choice. Ultimately, the decision to enter the OTC market comes down to a assessment of demand for your product in this new environment. A well informed decision will be made on a forecast that accounts for the specific business drivers of the OTC market.

Understanding the opportunities and implications of the Rx to OTC switch What motivates healthcare professionals to recommend a new OTC concept, patients to purchase it, and what barriers need to be overcome.

Among Healthcare professionals:
  • What is the perception of an OTC
 product concept?
  • What target patient group is recognized by physicians for an OTC product?
  • What would trigger physicians to to recommend an OTC product to their patients?
  • What would be the expected acceptance of an OTC product?
  • Which other products in the market would it compete with?
  • Is there a risk of cannibalization of Rx product?
Among consumers:
  • Are patients aware of the risks related to their condition?
  • What are consumers’ perceptions of their disease? How severe do they consider their
  • condition to be?
  • What is the perception of an OTC concept for their disease and is it well understood?
  • Is there willingness to pay for an OTC product? If so, how much?
  • Which other products in the market would it compete with?
  • What is the expected acceptance of an OTC product?
The potential of an OTC concept lies in the having the right mix and determine the optimal price by integrating consumers’ and healthcare professionals’ perspectives in a holistic market model.

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