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Rx-TO-OTC SWITCH KEY IS "NEW" OR "BETTER" OTC THERAPY

This article was originally published in The Tan Sheet

Executive Summary

Rx-TO-OTC SWITCH KEY IS "NEW" OR "BETTER" OTC THERAPY, former Warner-Lambert Category Director-New Products Larry Haverkost suggested at a Sept. 22 conference on managing the Rx-to-OTC process sponsored by the Institute for International Research. "You need to give FDA a reason for a switch," he advised, especially to manufacturers entering crowded categories. In the current regulatory environment, "if you look at the way all of the switches are being reviewed by the panel and the agency, they're looking at non-drug issues. They're looking at improved public health," Haverkost told the industry audience. That idea was echoed by other members of an industry panel, including SmithKline Beecham Director-Regulatory Affairs Thomas Blake, who said that without a public health benefit, FDA would have no incentive for a switch. "With Rx-to-OTC switches until now, priority at the FDA was dead last," Blake charged. He said that the low priority of switches was attributable to FDA not being "involved with the commercial opportunities" of switching. "From a public health standpoint, switches are dead last because the drugs are already out there -- unless you show a public health advantage," Blake advised. "[Then] you're bumped up in priority, and if you do that, you win hands down," he explained, saying: "FDA is not impressed by your argument that your drug is going off patent." "Switching a drug is a creative exercise. Sometimes you can look at an existing situation in the marketplace and you can demonstrate a public health problem that . . . you can come along and solve," Blake said. Before beginning the switch process, Haverkost suggested that drug companies should ask: "Is there really a need out there for this to switch?" He suggested that physician opposition to the switch may be a "very practical" concern for companies with both prescription and OTC divisions. "If there is no prescription replacement in that [new OTC] category, this is the doctor's armamentarium and you can't take his last bullets away," he cautioned. Blake recommended that manufacturers would be better served by trying to win approval to simultaneously market Rx and OTC versions of the same drug. "Try and find criteria whereby you can . . . split apart the indications of exactly the same drug" by looking for "non-consumer diagnosable conditions," he advised. Such an approach, Blake indicated, would continue to qualify the drug for third-party reimbursement. Citing the profitable Rx and OTC marketing of the Lotrimin antifungals, Blake said that dual marketing "gets you out of the trap of looking at those magic prescription dollar sales and attempting to extrapolate to what you think your OTC sales may be. That's going to be a fallacy; there's essentially no good way to predict what the sales will be when you switch from Rx to OTC. Focusing on the disease and not the drug may get you into a new category, find lead in -- hopefully -- to patient education materials and so forth." Another key to a successful switch is tapping "thought leaders" in all areas of health care, the industry panel concurred. "If you don't do that across all categories, you may be surprised to not have a good outcome at the time the proposal goes forward," Warner-Lambert Category Director-Consumer Health Catherine Segal said. Although most thought leaders are medical professionals, "thought leaders can be anywhere," Haverkost said. He recommended seeking out "people on the information side of the business, because they are strategists." And while "you should know everything about your consumer" in the OTC arena, Haverkost suggested, "the advice I got from those [communications] thought leaders was to make sure the communication stays with the professionals . . . It never occurred to me to give pharmacists samples when you switched a drug as a way to get information to the consumer". The panel also concurred that a third class of drugs is not a suitable alternative to, the switch process. While the third class is an "enticing" option for companies caught in a "slow approval process" or facing "significant regulatory hurdles that they can't overcome," David Cooke, brand management director at SmithKline Beecham, told the group to be wary of the long-term effects of third class marketing. "What happens when that particular medication loses exclusivity?" he asked the group. "The promise, of course, to us all is that it's going to speed up this process dramatically. . . . My biggest fear . . . is that that lure can be somewhat deceptive." Under the current system, when an OTC loses exclusivity, "store brands will come out and you will compete with them and you will lose 12% of your business, 15%, possibly 20%. That's accepted," Cooke said. "But I believe that in a third class situation what will happen is that you will lose similar [sales] to the Rx side of the business, you will lose 75% of your business within 12 months because the pharmacist of course is put into a situation where they can recommend . . . their brand as being just as effective, and in fact they can take the consumer out of that decision-making process," he predicted.
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