Allegra, Zyrtec Will Not Follow Claritin OTC In Near Future, Execs State

Aventis and Pfizer have no plans to switch their low- and non-sedating antihistamines OTC in the wake of Schering-Plough's decision to pursue FDA approval of nonprescription Claritin , company execs said at the SG Cowen healthcare conference in Boston March 13.

"We...firmly intend to maintain Allegra as a prescription product," Aventis Exec VP-Global Commercial Operations Thierry Soursac, MD, emphasized.

"We will continue to commit very significant resources toward supporting Allegra, including [direct-to-consumer] promotion," he added.

Pfizer has no immediate plans to switch Zyrtec OTC either, although the company appeared more open to the possibility than Aventis.

Responding to queries about whether Pfizer would consider a switch, a company rep said, "right now, probably not. That's something obviously we continually assess. I think right now...we're leaving all of our options open in terms of Zyrtec and [will wait to] see what actually happens in the marketplace."

Schering announced March 8 it had filed three supplemental NDAs with FDA to switch Claritin (loratadine) OTC (¹ (Also see "OTC Claritin Hatch/Waxman Exclusivity Not Expected By Schering-Plough" - Pink Sheet, 11 Mar, 2002.), p. 3).

Aventis' and Pfizer's comments indicate the two companies believe the prescription category will continue to show strong growth and draw consumers, despite the imminent arrival of Claritin's prominent brand name to the OTC market.

While it is unlikely health plans will stop covering the Rx drug class as a whole, with an OTC alternative on the horizon, Aventis, Pfizer and Schering could face significant pricing pressures from pharmacy benefit managers and health plans that are less amenable to providing coverage of the Rx drugs at the current level.

Aventis, Pfizer and Schering might have to lower the costs of Allegra, Zyrtec, and Clarinex , respectively, or offer PBMs greater rebates to entice them to keep the drugs on their formularies. Health plans also could increase the drugs' co-pays in an attempt to get consumers to switch to OTC Claritin.

The majority of insurers likely will take some time before making a decision concerning coverage of the Rx drug class. However, some plans already have made their decision; Blue Cross of California/ WellPoint Health Networks has decided not to cover Schering's follow-on drug Clarinex.

WellPoint led the push to switch the low- and non-sedating antihistamines OTC through a citizen petition filed in late 1998 (² (Also see "OTC Sale Of Rx Allergy Drugs Would Be Safer, Cut Costs - Health Plan" - Pink Sheet, 25 Jan, 1999.), p. 20).

Schering will face the difficult task of convincing health plans there are significant differences between Claritin and Clarinex that necessitate covering the latter drug. Aventis and Pfizer could face a different array of challenges.

The two firms will have to convince managed care providers that Allegra and Zyrtec are not interchangeable with either Claritin or Clarinex.

Addressing this issue, Aventis' Soursac noted that "managed care organizations could prefer to...switch as many" low- and non-sedating antihistamines as possible "OTC because they can save not only on the reimbursement of the drug, but maybe on the cost of the doctor visit."

"Nevertheless...even if there is a Claritin OTC," some consumers will still want Allegra, he said, "because [they] tried Claritin before and were not happy with it. There is large individual variation...The drug can be good for you and not good for me."

"The managed care organizations...need to take this into account," Soursac continued. The type of coverage provided after the dust settles will be determined by "the forces of the PBM, the patient request [and] the managed care interest," he said.

"Will there be pressure on rebates by managed care organizations? Probably. To what level, I don't know," he added.

Schering-Plough's strategy regarding its two allergy drugs is to "convert 100% of Claritin [users] over to Clarinex...then introduce Claritin to the OTC market," Schering Labs President Richard Zahn said.

He distinguished between the two drugs by pointing out Clarinex "is indicated for nasal and non-nasal symptoms, so this brings something to the table that was not there before."

Schering also plans to use its Rx experience in the OTC market. "We understand the allergy market. We know the patient demographics. We know profiles. We know symptoms, we know motivators, we know usage trend patterns...and we want to take that experience... while maintaining a prescription market," Zahn said.

In announcing its NDA filings with the agency to switch Claritin, Schering noted it would support any marketing effort for the nonprescription drug with a "comprehensive medical education campaign."

Besides distinguishing Claritin from its Rx counterpart Clarinex, Schering also will need to differentiate the antihistamine from existing OTCs. McNeil Consumer & Specialty Pharmaceuticals and Wyeth Consumer Healthcare have both filed 505(b)(2) applications with FDA to market nonprescription loratadine (³ (Also see "Claritin Patent Infringement Suit Brings Industry Into OTC Antihistamine Fray" - Pink Sheet, 4 Feb, 2002.), p. 3).

Although Claritin enjoys strong brand recognition, both McNeil and Wyeth would appear to have an advantage in managing large OTC launches. The two firms also have experience in the OTC allergy market - McNeil with its Tylenol Allergy line of products and Wyeth with the Robitussin and Dimetapp brands.

McNeil and Wyeth probably will opt to create new brands for their antihistamines, however, since loratadine products may not complement the existing products in their brand franchises.

Pricing also will undoubtedly play a role in both Claritin's success and that of its potential brand name competitors. The issue could become complicated if store-brand products also enter the market, as Schering, McNeil and Wyeth would be forced to contend with each other as well as lower-priced generics.

According to data from Chicago-based Information Resources, Inc., which excludes Wal-Mart revenues, the OTC cold/allergy/sinus category saw sales rise 1.6% to $1.88 bil. for the 52 weeks ending Jan. 27. McNeil controlled 14.3% of the market and Wyeth held 11.7%.

Pfizer Consumer Healthcare's Benadryl was the leading brand of cold/allergy tablets, with sales jumping 8.6% to $122.9 mil.; including the Sudafed franchise, Pfizer commanded 18.7% of the overall market. An eventual switch of Zyrtec OTC could help the firm protect its strong position in the category.