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This article was originally published in The Tan Sheet

Executive Summary

NATURAL/HERBAL MEDICINES WILL "COME OF AGE" OVER THE NEXT 20 YEARS, J. Paul Jones, PhD, Procter & Gamble VP-R&D for OTC health care products, forecasted at the Nonprescription Drug Manufacturers Association annual research and scientific conference in Washington, D.C. Jones was part of a Nov. 18 panel that was asked to predict what the OTC market would be like in the year 2010. Referring to the high consumer acceptance of natural and herbal remedies in India and China, Jones maintained that "once we understand [their] medicine systems, I guarantee you, our confidence in natural remedies will increase and someone will capitalize on them in the United States." Jones predicted that the herbal products category is "one area that will really challenge FDA as they decide how to regulate natural products and ingredients." He added: "What could be safer than a natural product with a 2,000-year history of use." The "biggest" issue for the OTC industry, Jones said, is the "amount of work we are still doing to defend our products within the monograph process." Due to the ongoing nature of the monograph process and the "significant" change of scientific standards, Jones continued, certain products have had to be "continually updated." Products under "open monographs are being required to submit far more data than for approved products in closed monographs," Jones asserted. He noted that it is "ironic" that prescription drugs approved 20 to 30 years ago remain unchallenged while monographed drugs are being "continually reworked." Jones urged the OTC industry to "forge a better, more understanding partnership" with FDA's Office of OTC Drug Evaluation and the Nonprescription Drugs Advisory Committee to "quickly end this defensive period in our history." The P&G exec called on OTC drug manufacturers to "work with FDA to simplify the process for minor changes and beef up the requirements for significant changes." He urged the industry "quit acting confused over which are which." Jones also predicted that OTCs will have a stronger presence in the marketplace over the next two decades, with companies making Rx-to-OTC switches a higher priority. "We all know that there is going to be increasing pressure from all directions on the cost of drugs, especially prescription drugs," he said. "This will encourage companies to switch drugs to OTC status sooner than in the past when the switch was typically driven by patent expirations and generic competition," Jones maintained. He continued: "Today, most if not all OTC switches occur long after the Rx development is completed and well into or near the end of the patent protected prescription marketing period." In the future, drug firms will increasingly "incorporate switch strategies into initial prescription strategy," Jones predicted. "We will be agonizing over lost OTC sales and profits" if prescription products "are not switched soon enough," he told the group. Jones also commented on the future of private-label OTCS. "Consumers like the savings, governments like the savings and most companies other than health care companies like the savings," Jones said. "We can curse this turn of events or we can see it as a set of forces that drive the OTC industry for a period of unprecedented growth and opportunity," Jones said. Diane Rose, VP and general manager of Gross Townsend Frank Hoffman, Inc., also acknowledged the consumer drift toward store brands, but speculated that it is due to a lack of "real choice" in the OTC market. Consumers are "confused and one of the ways they let us know that is by turning more and more to price." She asserted that when store "shelves are overloaded with products that are not all that distinctive . . . lower price is one way to make a decision." Noting that the U.S. population is "getting older with every decade," Rose declared that consumers will increasingly demand products to "prevent health care problems and forestall the natural deterioration that comes with aging." She forecasted, for instance, that consumers will be looking for ways to "cope more effectively" with failing eyesight, incontinence problems, hearing loss, foot and joint difficulties, memory loss, loss of mobility and organ deterioration. Products that may appeal to this population include: "tonics" to maintain a "youthful" appearance; products that "restore hair to its original color"; and "products that actually keep eyes healthier longer" and "preclude the need for eyeglasses." Easier-to-open packaging, easy-to-read labels and easier-to-swallow products in powder forms will also be in high demand, Rose predicted. Bailey & Robinson Senior VP and former FDA Associate Commissioner for Legislative Affairs Marc Scheineson told the NDMA attendees that new technologies would redirect the OTC industry. Scheineson predicted that the "information highway" will soon make cable television and PC interaction with doctors for medical advice a "reality." He suggested that diagnostic programs would bring interactive medical encyclopedias "into the home" along with "media physicians and pharmacists" to "diagnose, prescribe or sell . . . [via] interactive TV." Scheineson also speculated that on-line labeling information will be available at home along with comparative pricing and cost- benefit analyses. "Labels will require so much information that they will be contained on computer chips attached to the product," Scheineson said. Scheineson also mentioned the possibility of drugs being offered for sale on a "home pharmacy network." Scheineson suggested that there will be a "huge transformation" in the advertising and promotion of OTCs. "There will be a removal of ad flutter through active, not passive, TV selection" by consumers who can "screen ads for personal care products." He also predicted "immediate purchasing capabilities via interactive video," which could make "impulse buying a multi- million dollar business." The former FDAer concluded that "technological innovation that used to build a company for decades can now be obsolete before it receives regulatory approval or reaches the store shelf."

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