Sanofi’s Rx-to-OTC switch Nasacort Allergy 24HR will be positioned in the crowded allergy category as providing dual relief from allergy and decongestion as an OTC, while most competitors offering both are sold behind the counter.

While its dual role and OTC status might provide a marketing edge, the brand still must overcome potential barriers that could hamper sales, such as consumer preference for pills over sprays, weaker brand awareness than competitors and less loyalty among Rx allergy spray users.

The Spring 2014 launch of the triamcinolone spray “will offer another OTC option for the full range of nasal allergy symptoms, including nasal decongestion, which is not currently included in the indication of any monotherapy oral antihistamine,” Sanofi spokeswoman Lori Lukus said.

Zyrtec D, Allegra D and Claritin D all offer nonprescription allergy relief and decongestion, but because they combine their unique active ingredients with pseudoephedrine they are relegated to behind the counter sale. Without pseudoephedrine, McNeil Consumer Healthcare’s Zyrtec(cetirizine HCI), Merck & Co. Inc.’s Claritin(loratadine) and Sanofi’s Allegra (fexofenadine) are available OTC but are indicated only for allergy relief and not decongestion.

Products like Sudafed PE Sinus and Allergy, which also makes allergy and decongestion claims, can be sold OTC because they replace PSE with phenylephrine. But the decongestant PE is contested by some as less effective than PSE and other decongestants Also see "Data Support Phenylephrine Efficacy, But More Studies Needed – NDAC" - Pink Sheet, 17 December, 2007..

Having to weigh easy OTC access of a potentially less desirable product against waiting to ask a pharmacist for a more effective combination product likely has left some consumers disenchanted.

Indeed, Lukus notes that a recent survey revealed nearly 60% of nasal allergy sufferers who used currently available OTC products, including oral anti-histamines and decongestants, are not very satisfied with the medicine they use.

This discontent opens a space for Nasacort Allergy 24HR, which FDA approved for OTC Oct. 11 for the relief of runny nose, sneezing, itchy nose and nasal congestion Also see "Sanofi’s Nasacort First-In-Class Switch Receives FDA Approval" - Pink Sheet, 11 October, 2013..

In addition, Sanofi believes that the OTC market can support the addition of another OTC option because “up to 60 million Americans suffer from seasonal and year-around hay fever and other respiratory allergies,” Lukus said.

Laura Mahecha, industry manager for health care at Kline & Co., agrees with Sanofi that there is room in the allergy category for another product, but cautions the Nasacort 24HR must overcome other obstacles.

Room For Category Growth

“Allergy is always a big category and it seems to grow exponentially” when new products switch from Rx, rather than fragmenting into smaller pieces, Mahecha said.

In 2007, the OTC allergy category was worth $865 million at the manufacturer level, and with the addition of Zyrtec in 2008 and Allegra in 2011 the category almost doubled to $1.6 billion, she said. From 2011 to 2012 alone, OTC allergy sales climbed 7.5% from $1.47 billion to $1.58 billion, which far outpaced most other OTC categories that typically grow 1% to 3% a year.

This demonstrates that “those oral tablets, when they switched, added an enormous amount to the category,” she said, noting during Allegra’s first year OTC in 2011 it sold $288 million and Zyrtec’s first year in 2008 sold $406 million.

Mahecha explained the fragments in the allergy category continue to grow rather than shrink when a new switch launches because allergy consumers tend to stick with their molecule and follow it from Rx to OTC.

“Allergy is a very unique category in the sense that some drugs are effective for some allergy sufferers and others are not,” which means when users find one that works, they stick with it, even if other products become available, she said.

Mahecha pointed out this will help protect sales of Allegra from being cannibalized by Nasacort, but it also will protect Zyrtec and Claritin sales.

Pointing Rx Users To Switch

Since Nasacort is a first-in-class switch it might pull some curious users, at least temporarily, from other OTC products, but it most likely will pull the bulk of new users from consumers who use other Rx allergy sprays, Mahecha said. A consumer’s long-term commitment to Nasacort then might hinge on how the product’s price, which is not public yet, stacks up to co-pays for the other Rx sprays.

Even if the OTC cost is higher than the co-pays for competing Rx sprays, consumers could be willing to pay a slight premium for the convenience of obtaining the drug from a retailer without first visiting a doctor, Mahecha said.

Sanofi likely will work with third-party payers, such as managed care groups and insurers, to drive users to OTC Nasacort from competing prescription allergy sprays with similar indications.

“It is in both of their interests to get consumers to stop using the Rx benefits toward this and to pay out of pocket” for an OTC treatment, Mahecha said.

To prompt consumers to try an OTC product, managed care groups often “will send out letters or emails [with] a coupon and say, ‘This is now available without a prescription, so go buy Nasacort.’ This looks like they are being really proactive with their allergy suffers, but in essence they are saving costs along the way,” she added.

Teaming with health care providers and managed care plans can generate up to two to three times the consumer awareness as marketing campaigns that do not, according to executives who have reached out to these groups in previous Rx-to-OTC switches Also see "Switch Sponsors Find Key Partners In Payers, Providers and Managed Care" - Pink Sheet, 29 September, 2008.. The campaigns for Zyrtec, Claritin and Prilosec OTC all used managed care plans in different ways to advance sales after switches Also see "Zyrtec Model Shows Managed Care’s “Softer” Side For Switching Patients" - Pink Sheet, 1 December, 2008..

In addition to working with insurers, Sanofi likely will market Nasacort through outreach to providers and pharmacists and directly to consumers.

Lessons From Allegra Launch

Sanofi is not ready to share marketing information about Nasacort, but the strategies its subsidiary Chattem Inc. used to launch Allegra when it switched could shed light on a potential campaign.

When Allegra launched OTC in March 2011, Chattem created a sense of continuity with Rx users of the product by creating packaging that recalled the prescription product’s packaging by making only small changes Also see "Allegra Brand Revision Will Sell Romance, Emotion" - Pink Sheet, 22 October, 2012..

Chattem’s advertising also zeroed in on consumer complaints about current OTC allergy relief products – that they had to sacrifice either speed of acting or suffer drowsiness, according to the Nielsen Co., which recognized the campaign as a Breakthrough Innovation Winner in 2013.

Chattanooga, Tenn.-based Chattem created the tagline “now you can have it all: only Allegra combines fast, non-drowsy, 24-hour relief,” to appeal with “empathy and relevance” to consumers’ needs, according to the Nielsen Co. Brand imagery also addressed emotional and social needs by showing consumers with allergies energetically gardening, walking dogs and hiking without suffering.

By addressing consumers’ needs and emotional and social dimensions, Allegra demonstrated that “being a late entrant to a crowded market can nonetheless prove highly lucrative” with $680 to $690 million in revenues in its second year, Nielsen noted.

Nasacort has an opportunity to copy this success by addressing an unmet consumer need – such as easy access to a drug indicated for both allergy symptoms and congestion – and playing to consumers who might not want to take the time to buy behind-the-counter allergy and decongestant combination therapies, or who have limited access to those products.

OTC Popularity Of Sprays Uncertain

Mahecha also thinks playing up Nasacort’s indication, single-ingredient formulation and benefits will help drive sales more than a campaign highlighting the product’s different delivery platform. She said most OTC consumers prefer allergy medications as tablets, not sprays, so the platform could hold down sales of Nasacort.

“I don’t foresee this being a $300 million a year brand” like Zyrtec, Claritin or Allegra because “people just don’t like sprays in terms of form,” she said.

Sprays are messy, can sting and in the short term usually aggravate the problem they are intended to relieve, she said. She added existing OTC sprays for allergies and congestion, including Merck’s Afrin (oxymetazoline HCI), “just haven’t done as well” competing with allergy products in tablet or capsule forms.

In the 52 weeks ending Oct. 6, sales at the retail level of allergy tablets in 2013 reached $4.24 billion compared to sprays, which only reached $551.5 million during the same period, according to IRI, a Chicago-based market research firm.

Existing OTC allergy sprays likely will not be significant competitors for Nasacort because they can be used only short term and target a different consumer set, Mahecha said.

She claimed while Afrin and other oxymetazoline HCI products like Vicks Sinex and Dristan promise to relieve congestion instantly, compared to a potential delay of a day to a week of lead time for Nasacort, consumers cannot use them for more than three days without a rebound effect causing their symptoms to worsen. Likewise, they do not promise to relieve itchy noses and sneezing like Nasacort does.

The short-term use and other restrictions “severely limit sales potential and growth potential of the Afrin brand” and others like it, Mahecha said.

Brand Awareness Lacking

Another factor that could keep sales of Nasacort from rivaling Zyrtec, Claritin and Allegra is it has substantially weaker pre-switch brand awareness.

“Claritin had an enormous brand awareness and a lot of direct-to-consumer advertising and spending behind it” before it switched, “same with Zyrtec, same with Allegra,” Mahecha said.

A lack of consumer awareness could hinder Nasacort sales by reducing the number who follow it from Rx to OTC. If consumers cannot recall the brand of Rx allergy spray they use, they might not think twice about switching to a different Rx product. Educating consumer and providers about Nasacort 24HR’s OTC status could be crucial to moving users of the Rx product to the OTC side.

Nasacort OTC Dual Allergy/Decongestion Relief Could Be Marketing Edge

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