Schering Consumer Strategy: Switch Claritin OTC, Establish Clarinex By DTC

Schering-Plough's planned over-the-counter switch for Claritin should help the company establish Clarinex as a prescription brand.

Schering disclosed March 6 that it filed supplemental NDAs "to switch all indications and market all formulations" of Claritin (loratadine). The applications were submitted Jan. 28, setting a Nov. 28 user fee action date.

A switch would create a clear differentiation between Claritin and the successor compound Clarinex (desloratadine), which Schering launched in January.

In the near term, an OTC switch for Claritin may make it easier for Clarinex to claim first-line status on managed care formularies once generic loratadine enters the market. Over time, Clarinex would presumably benefit from the perception that prescription drugs are more powerful than OTCs.

Past experience indicates that an OTC switch in a category does not necessarily hold back growth of prescription-only agents. Prescription NSAIDs, for example, have continued to have commercial success despite the availability of OTC alternatives.

FDA's Nonprescription Drugs Advisory Committee will consider OTC Claritin on April 22. While Schering said it submitted sNDAs for all Claritin formulations, the advisory committee will only review the tablet, redi-tab and syrup applications, not the 12-hour and 24-hour extended-release formulations.

The committee has already voted that Claritin is an appropriate candidate for OTC status. FDA convened NDAC in May 2001 to consider Wellpoint's 1998 citizen petition asking FDA to force a switch of Claritin (along with Aventis' Allegra and Pfizer's Zyrtec ) (¹ (Also see "Antihistamine OTC Switch Moves To Legal Arena After Committee Votes" - Pink Sheet, 14 May, 2001.), p. 34).

The upcoming review will focus primarily on "whether loratadine can be appropriately labeled to treat chronic idiopathic urticaria in an OTC setting." During the 2001 review of the petition, FDA noted that, unlike rhinitis, CIU is not a well established OTC condition.

The potential Claritin switch puts Schering in an unusual position. During the first advisory committee review, Schering argued there was not yet sufficient postmarketing safety data to merit a switch. Schering said that FDA has not asked the company to submit a safety study to support a switch. The company would not say if it has conducted such a study.

The first review also included the Pulmonary-Allergy Drugs Advisory Committee, but Schering's application will be considered solely by NDAC.

If Schering conducted additional research to establish CIU as an appropriate OTC condition, that could be a basis for a claim of at least partial exclusivity for the switch. Given the first advisory committee vote, Schering may have difficulty establishing any grounds for exclusivity for use of Claritin for OTC treatment of rhinitis.

If the CIU claim is not approved for OTC use, there would be a silver lining for Schering in the affirmation by FDA that there are antihistamine indications that should remain prescription only. Although the Wellpoint petition relates only to Claritin, Allegra and Zyrtec, Schering must also consider the potential precedents for Clarinex.

Schering gave a clear signal of its intention to pursue OTC Claritin in a Jan. 31 press release announcing litigation against McNeil Consumer Healthcare and Whitehall-Robins over 505(b)(2) applications for OTC loratadine. While emphasizing its opposition to a forced switch, Schering noted that it "is continually considering options to give the company the flexibility to maximize its business opportunities" (² , p. 24).

The review deadline for OTC Claritin falls a month before the loratadine compound patent expires on Dec. 19. Schering is in litigation with 13 ANDA applicants as well as the two 505(b)(2) sponsors seeking to enforce patents that run through 2004 and 2008.

Generic companies have begun considering potential partnerships for private label versions of OTC Claritin, assuming the switch takes effect. Initial industry estimates suggest that the market for generic versions of an OTC would be roughly half as large as for a generic Rx version, factoring in the effect of increased royalties under partnership deals and the potential that some generic companies would abandon the product altogether.

The decision over whether Claritin OTC merits three years of Waxman/Hatch exclusivity offers another potential complication for generic manufacturers.

Schering announced the OTC filing shortly after launching its DTC advertising campaign for Clarinex.

Investors had expected the ads to break earlier this year. Schering was pressed on its plans for marketing Clarinex during a Feb. 25 meeting with analysts (³ (Also see "Schering-Plough Clarinex Has 12.3% New Rx Share As Of Feb. 25" - Pink Sheet, 4 Mar, 2002.), p. 28).

FDA pre-approved the Clarinex DTC campaign, Schering said.

The ad campaign was timed for the spring allergy season - but may also play a central role in the Congressional debate over DTC advertising.

In announcing the Clarinex campaign, Schering presented a defense of the "value" of DTC advertising, calling it "an important platform to encourage open discussion between patients and healthcare professionals."

Congress and industry are gearing up for a debate over the merits of prescription drug advertising for consumers (⁴ (Also see "Pfizer-Funded DTC Study Concludes Physicians Find Ads Beneficial" - Pink Sheet, 18 Feb, 2002.), p. 3).

"The education program includes a dedicated web site, a series of print, broadcast and online advertisements, and information displays for doctors' offices and pharmacies." The launch included full-page ads in the March 4 New York Times and Washington Post.

The ads highlight the prevalence of allergies, using the theme: "Billions of Allergens, One Tiny Blue Pill." Web site slogans include: "All day. All night. All year. Clarinex"'; "Feel like yourself everyday - season to season"; and "Season to season, and everyday in between."

Although Schering is not discussing the size of the campaign, the company's marketing agreement with AOL Time Warner could be an indicator of the breadth of the DTC promotion. The media company issued a separate press release announcing the Clarinex campaign. "The cross-marketing initiative will take full advantage of AOL Time Warner's multiple television, online and print ads" reaching "over 45 mil. Americans," AOL Time Warner said.

New York-based Competitive Media Resources estimated that Schering spent $201.2 mil. on the Claritin DTC campaign in 2001.