Claritin Sales Raise Questions About Growth Opportunities For Switches

Sales of Schering-Plough's Claritin are already lagging in the first quarter compared to the same period last year.

Claritin sales were down 9% to $117 mil. versus $129 mil. in the first quarter of 2003. Still, OTC Claritin had sales of $415 mil. in 2003, making it the most successful switch ever, according to Schering.

However, the slow-down in the first quarter for Claritin somewhat confirms certain fears in the nonprescription drug industry that Rx-to-OTC switches provide an initial growth period during the first year of launch but decline once on the market with other branded and private label products.

For example, Wyeth's competing Alavert allergy medicine accounted for $17.6 mil. in first quarter sales, a decrease of 16.4% compared to the year-ago period. The branded loratadine product was launched at roughly the same time as Claritin in December 2002.

Private labelers continue to gain ground in the loratadine market. Store brand 10 mg loratadine tablets had a market share of 56.2% for the four weeks in March, beating out Claritin, according to Leiner Health Products.

The decline in Claritin sales underscores the importance of getting three-year market exclusivity and magnifies the risks to a growing OTC switch product in the face of fierce competition.

In order to receive exclusivity, a company must perform a clinical study or multiple trials for a different dose and new indication that are appropriate for an OTC population to support a new NDA.

Schering-Plough made the decision to switch Claritin over the counter just prior to patent expiration in December 2002 through the approval of several supplemental NDAs.

The firm kept the same dose and indication for the OTC version as its prescription counterpart at the time. Claritin (10 mg loratadine) tablets, RediTabs and syrup were approved for "temporary relief of symptoms of hay fever or other respiratory allergies: runny nose; sneezing; itchy, watery eyes; and itching of the nose or throat."

Pharmacia & Upjohn was denied exclusivity for its OTC baldness treatment Rogaine due to only performing one clinical study that was not "essential" to the product's approval.

Nonprescription Rogaine launched in April 1996 and faced almost immediate branded and private label competition, which contributed to an eventual sales decline.

On the other hand, AstraZeneca conducted clinical studies and changed indications for Prilosec (omeprazole) as an OTC. While Rx Prilosec was indicated for treatment of gastroesophageal reflux disease, Prilosec OTC (marketed by P&G) was indicated for "treatment of frequent heartburn."

Prilosec OTC, which was approved in June 2003, will have patent exclusivity until June 20, 2006.

Nonetheless, for Schering, it remains unclear what Schering is going to do with its next-generation Clarinex (desloratadine). Clarinex' first patent is set to expire in October with multiple other patents running until 2007.

Global sales of Clarinex were down 25% to $130 mil. compared to last year, including a 48% decrease in U.S. sales to $69 mil. Schering's manufacturing consent decree, signed by former CEO Richard Kogan in May 2002, is limiting production within the Clarinex franchise as well, CEO Fred Hassan said during an April 22 earnings call.

"We, at this time, only have Clarinex tablets available," Hassan stated. "The allergy business is a palette of the phase tablets, the Claritin-D 12, and the Clarinex-D 24 and the Clarinex syrup. By having a palette of allergy products, you are more relevant to the specialties, such as the allergists, [ear, nose and throat], and the primary care doctors." Clarinex-D 24 is in Phase III trials and Clarinex syrup is under review at FDA.

Hassan said the firm is looking into outsourcing manufacturing of products affected by the decree but that Schering does not want to compromise its relationship with FDA. "The outsourcing question is being looked at already. But, more importantly, we've discontinued a lot of products, and that's affecting our overhead absorption, and so that itself is very, very costly for the company."

The consent decree has affected a "very large part" of the firm's U.S. sales. "Many of those products in our tail died because of the consent decree...Most of them are gone permanently," Hassan noted.

Schering has completed 107 of the 212 "significant steps" of its GMP work plan, according to Hassan.