Market research insight from Kalorama Information Reports, with a particular focus on diagnostics, biopharma and healthcare IT.
Thursday, May 10, 2012
OTC Drug Sales Not Recession-Proof
Results over the past few years may put to bed the theory that OTC drug sales go up during recession. It was something broadly predicted, including in our own reports. It turns out that OTC drugs were affected by consumers having less cash in their pockets, just as much as other products were. Some of the reasons for this are complex, and some are simple. Less money in your pocket?, Skip the visit the doctor. Don't visit the doctor, don't think you need any medicine, even OTC. But there's more than that...
Despite predictions that consumers in recessionary times would flock to cheaper OTC drugs, the world over the counter drug market grew little in the past few years. The market grew just 3.5% since 2008, according to our latest report on the subject, The World Market for Over the Counter (OTC) Drugs. According to the report, the 78 billion-dollar market for over-the-counter pharmaceuticals behaved as many products in the recent recession: almost no sales growth in 2009, and slowly increasing but below average growth in the past two years. OTC drug products are sold worldwide and the growth rates are highly fragmented by region and type of drug category. OTC drugs largely due to differences in economic conditions, perception of self-medication, education, access to medical advice and products, demographics, product availability, and incidence of diseases and medical conditions. There are a couple of reasons. Consumers reduced doctor visits and sought to trim all medical expenditures since 2009, which dampened the benefit from customers preferring the lower prices. Lower-priced drug store brands competed well with brand products, reducing prices paid. And increasing numbers of patients insured through Medicaid and Medicare were better able to purchase prescription products, reducing the need for OTC purchases.
regions showed faster or slower growth than average, and some drug categories
also showed better performance. These segments are detailed in Kalorama
Information’s report, The World Market for Over The Counter (OTC)