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This article was originally published in The Tan Sheet

Executive Summary

WARNER-LAMBERT's Rx-TO-OTC SWITCH CANDIDATES INCLUDE MECLOMEN AND NICOTROL, Chairman and CEO Melvin Goodes told securities analysts in New York on April 21. "We make two products which could eventually go Rx-to-OTC and they are [the nonsteroidal anti- inflammatory drug] Meclomen and potentially [the nicotine patch] Nicotrol," Goodes noted. President and Chief Operating Officer Lodewijk de Vink added that OTC switches are "high" on the company's "agenda." Warner-Lambert described its plans to switch the analgesic/anti-inflammatory agent Meclomen (meclofenamate) to the OTC market as being "in an early stage." Tests are under way and "are looking good," the firm said. The Meclomen patent has already expired. Emphasizing the strength of the company's consumer product marketing, Goodes pointed out that Warner-Lambert already has "1,200 people calling on tobacco and confectionary distributors and that's a major plus for us and something which we want to explore." In addition, Goodes indicated that Warner-Lambert is interested in marketing Rx-to-OTC switch products from other companies. He told the analysts that Warner-Lambert has "been approached by a number of companies about the possibility of working with them on Rx-to-OTC switches [of their products] because [those companies] recognize our marketing capability around the world." Warner-Lambert credited "strong" sales of consumer products for the company's 2% growth in first quarter sales. During the quarter, U.S. prescription drug sales were down 12%. Consumer product sales in the U.S. grew 8% to $ 817 mil. while overseas consumer product sales rose 7% (12% at constant currency rates), the company reported. Halls cough tablets, Listerine mouthwash, Benadryl antihistamine products and Schick shaving products led the growth, Warner-Lambert said. In his presentation to analysts, de Vink highlighted the performance of the Halls line, which "strengthened its position [in 1992] as our leading consumer product" with worldwide sales of $ 380 mil. "Aided by line extensions in Canada, Colombia and Peru," De Vink noted that Halls sales grew 17% during the first quarter of 1993. In materials prepared for the analysts, Halls appears as Warner-Lambert's number two product in 1992, behind only Lopid (gemfibrozil), a prescription lipid-lowering agent that generated sales of $ 556 mil. last year. Other Warner-Lambert consumer products with sales over $ 100 mil. were Listerine ($ 332 mil.), Schick ($ 316 mil.), Rolaids ($ 126 mil.) and Benadryl ($ 118 mil.). De Vink said the introduction of Cool Mint Listerine "has helped expand volume sales in the overall mouthwash market by 6.6% [and] . . . helped drive Listerine's overall share to a recent high of 32%" in the U.S. Worldwide sales of Benadryl were aided by a 13 point increase in market share in Australia to 41%, de Vink said. In the U.S., Parke-Davis launched Benadryl Allergy/Sinus/Headache for allergy symptoms accompanied by sinus headache. Warner-Lambert is looking ahead to a Seldane switch as the biggest potential threat to the Benadryl line, and not Sandoz' recently switched Tavist, de Vink indicated. "Given the questionable launch of an OTC Seldane," de Vink stated, "Benadryl's position seems secure for the next few years." One analyst asked whether Warner-Lambert will be forced to discount its prices for consumer products in order to hold market share versus private-label products. John Walsh, president of the company's consumer product sector, responded that "the answer to private label is to be highly innovative in what you are doing in marketing . . . creating strong copy and creating meaningful product differences." He said Warner-Lambert believes it "can do that without resorting to everyday low prices."

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