Prilosec OTC Making Inroads Into Abbott’s Prevacid
This article was originally published in The Tan Sheet
Executive Summary
Abbott Labs plans to counter the launch of Prilosec OTC with a broad direct-to-consumer advertising campaign for its Rx proton pump inhibitor Prevacid
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Abbott Labs plans to counter the launch of Prilosec OTC with a broad direct-to-consumer advertising campaign for its Rx proton pump inhibitor Prevacid . Sales of Prevacid have been impacted negatively by the September 2003 launch of nonprescription Prilosec (omeprazole). Prevacid is sold by TAP, a joint venture between Japanese pharmaceutical firm Takeda and Abbott. Fourth quarter sales for Prevacid were down 5.8% to $828 mil. "Prevacid script trends in the fourth quarter were driven largely by a slowdown in market growth for the proton pump inhibitors," CEO Miles White said during a Jan. 16 earnings call. White cited the "near-term impact of an OTC entrant and some temporary disruptions in the marketplace" for the downturn. P&G said that Prilosec OTC garnered a 17% share of the heartburn category after only three months on the market with $69 mil. in sales. Still, Prevacid is the market leader in the PPI category, according to Abbott, with a 29% share. TAP plans "to defend and build its share within the PPI market, to improve sales force effectiveness and continue DTC activities including a new television and print advertising campaign." Many Rx firms did not expect to see a meaningful effect on their gastroesophageal reflux disease/heartburn offerings following the OTC Prilosec introduction due to the different indications for use. However, some firms, including many generic makers, are now starting to see some erosion in sales as a result of an omeprazole product being offered to consumers. "TAP is anticipating that the PPI market will grow modestly in 2004," White concluded. TAP expects to see sales growth in 2004 from a newly approved combination pack of Prevacid and a common NSAID for arthritis patients at risk for ulcers who are also indicated for NSAIDs. Separately, Abbott does not plan to do any more major acquisitions for the year following its purchase of glucose monitoring firm TheraSense for $1.2 bil.. White maintained: "I don't foresee any significant deal activity ahead. Instead our focus this year is on executing the major initiatives already underway." |