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| Anne Whitaker, the North American president of pharmaceuticals for Sanofi US |
Sanofi's ($SNY) got a new OTC offering, and consumers will soon have a steroid-based nasal spray option in drugstore aisles. Friday, the FDA backed the sale of allergy med Nasacort as an OTC med. It's a win for the company, whose consumer healthcare strategy focuses on switching drugs over from prescription status. And it sets a regulatory precedent for other companies looking to do the same.
The approval makes Nasacort, which treats hay fever and upper respiratory allergies, first in its class as an OTC med. "We believe there is significant value in making certain types of medicines, like Nasacort, directly available to consumers," said Anne Whitaker, the North American president of pharmaceuticals for Sanofi US. "Allergy sufferers will benefit from having an additional treatment option, and it is a strong addition to our existing consumer healthcare portfolio."
There's also value there for Sanofi, with the OTC conversion marking a revenue opportunity for the French drugmaker. The approval adds Nasacort to Sanofi's Chattem consumer healthcare division, which it picked up in an effort to diversify its offerings in advance of the patent cliff. Sanofi charged Chattem with launching an OTC version of blockbuster allergy med Allegra, which it did in 2011 to the tune of €211 million ($280 million) in revenue that year.
With peak sales of $375 million, Nasacort's OTC sales would be considerably smaller; the prescription version generated €71 million (about $94 million) last year. But the market is substantial: IMS Health figures quoted by The Wall Street Journal list nasal steroid allergy sprays at $2 billion in 2012 sales, with more than 47 million prescriptions written. And Sanofi, which reported a dismal 9.8% slide in net sales last quarter, will appreciate the boost.
The approval comes as Sanofi is reorganizing its consumer healthcare operations to grow that business further. Last week, it tabbed its consumer healthcare division for worldwide expansion, creating a new Global Consumer Healthcare segment. The company said the move would "strengthen innovation" and build "some global brands or global brand platforms in support of the regional or local brand carriers." The division has already doubled its sales from €1.42 billion ($1.93 billion) in 2008 to €3.01 billion ($4.09 billion) in 2012, buying out businesses around the world to become one of the top OTC players worldwide.
Other Big Pharma companies have come up with similar ideas to offset patent losses. And while the FDA in the past hasn't been so gung-ho to grant OTC status, Sanofi's approval may just represent an opportunity for other drugmakers to follow suit. The result? A shift that would open up consumer access while saving money for government programs that pay prescription prices--and keep sales coming for drugmakers, of course.
- here's the release from Sanofi (PDF)
- get more from the WSJ (sub. req.)
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