Generic Nicotine Replacement Products Start To Smoke In 2000
This article was originally published in The Tan Sheet
Executive Summary
Private label OTC smoking cessation products thrived in 2000, their first full year on the food, drug and mass market, recording sales well over $100 mil. and capturing nearly a 20% dollar share, according to data from Information Resources, Inc. (Chicago).
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Private label OTC smoking cessation products thrived in 2000, their first full year on the food, drug and mass market, recording sales well over $100 mil. and capturing nearly a 20% dollar share, according to data from Information Resources, Inc. (Chicago). Boosted by the entry of several new products in late 1999 and early 2000, sales of private label nicotine replacement gums and patches soared 665.9% during the year to $114.2 mil., compared to $13.8 mil. in 1999. The generics realized an 18.9% share of the market in the 52 weeks ended Dec. 31, making a sizable dent in GlaxoSmithKline's dominance. The private label charge has been led by Watson Pharmaceuticals' introduction of generic nicotine replacement gum in April, as well as the 1999 launches of equivalents to Novartis' Habitrol transdermal patch and Perrigo's nicotine patch acquired under a licensing deal with Elan Pharmaceuticals. Despite the increased competition over the past 18 months, GlaxoSmithKline continues to enjoy a strong hold on the $604.2 mil. category, largely reflecting the firm's efforts to enhance its franchise with extensions such as mint- and orange-flavored Nicorette gum and Clear NicoDerm CQ patches. Nicorette and NicoDerm CQ collectively own over 80% of the U.S. market, with respective dollar shares of 52.7% and 27.7%. SmithKline Beecham had commanded more than 90% of dollar share since the debut of the category in 1996. Revenues for both brands fell by double digits in 2000, according to IRI. Nicorette gum sales declined 11.3% to $318.5 mil., while NicoDerm CQ dropped 20.5% to $167.3 mil. (1 ). Pharmacia's Nicotrol patch has not fared well, nearly falling off the chart with an 80.5% drop in sales to $2.1 mil. The brand, which Pharmacia purchased from McNeil Consumer Healthcare in June, holds just .3% of the market. Another category in which private label marketers continue to excel is antacid tablets, where generics - led by H2 antagonist products - leapfrogged Warner-Lambert's Zantac 75 into the second ranking behind J&J/Merck's Pepcid AC. Private labels hopped up 29.2% to $163.1 mil. and a 16.1% market share, according to IRI. Pepcid AC remains on top with sales of $191.4 mil. and an 18.9% share. The brand slipped 8.9% in the 52 weeks, but could rebound or at least stave off further losses with its recently launched antacid/H2 combination Pepcid Complete. Ads for the first product to claim both fast-acting and long-term acid relief began in January, making direct comparisons to other stomach remedies on the market, including GSK's Tums (2 (Also see "Tums Calcium For Life PMS, Bone Health Supplements Targeting Women" - Pink Sheet, 15 Jan, 2001.)). GSK has countered with comparative ads of its own (3 (Also see "Tums Ultra" - Pink Sheet, 29 Jan, 2001.)). Several Tums SKUs remain top-10 antacid tablets, according to IRI, with Tums, Tums EX and Tums Ultra accounting for nearly 10% of the category. All three, however, slipped in dollar sales during 2000. Looking broadly at all OTCs tracked by IRI, industry revenues were comparatively flat, with many categories - such as internal analgesics, stomach remedies and cold/allergy - dropping slightly. In contrast to 1999 sales, only a few peripheral product areas made gains for 2000 (4 (Also see "Migraine, Arthritis Internal Analgesics Post Strong 1999 Sales Growth - IRI" - Pink Sheet, 7 Feb, 2000.)). The main factor likely contributing to falling revenue in the cough/cold and allergy categories was the voluntary withdrawal of phenylpropanolamine-containing OTCs. Cold/allergy/sinus tablets/packets were down 4.2% for the year on sales of $1.56 bil., according to IRI. Most notably, Bayer's Alka-Seltzer Plus fell 23.4% to $91.3 mil. One of the few categories recording increased sales was liquid sore throat remedies, which gained 9.9% to $47.5 mil. Still led by P&G/Vicks' Chloraseptic with a 43.4% market share, McNeil's Tylenol Sore Throat leaped into the second spot, grabbing a 20.4% share. The sore throat liquid, which hit shelves in October 1999, posted a 350.5% increase in sales over its shortened launch year, for total sales of $9.7 mil. (5 (Also see "Tylenol Sore Throat Line Extension To Debut In October" - Pink Sheet, 14 Jun, 1999.)). Chloraseptic posted revenues of $20.6 mil., dropping 6.3%. Private label throat remedies moved down in the category, sharing space with Cepacol (J.B. Williams) with 15.4% and 13.3% dollar shares, respectively. Warner-Lambert's Halls Defense Drops was the big gainer in the sore throat drops segment with sales of $21.8 mil. and a 5.3% dollar share. The extension replaced Halls Zinc Defense in mid-1999. Original Halls remain atop the $411.7 mil. category with a 28.2% dollar share on sales of $116.1 mil. |