Sanofi deal spotlights pharma OTC action

When Sanofi-Aventis agreed to buy consumer healthcare specialist Chattem earlier this week, the $1.9 billion deal set industry tongues a-wagging about OTC meds and their importance to pharma sales growth. Who's well-positioned in the OTC market these days, and who's likely to be playing catch-up in 2010? And who's likely to be content with little or no OTC business?

In that latter category, put Bristol-Myers Squibb. CEO Jim Cornelius' (photo) string-of-pearls strategy--and his bid to go biotech--isn't likely to leave much room for OTC endeavors. Among those likely to spend time and money building up consumer-product and OTC business is Pfizer, whose CEO recently lamented the 2006 sale of its consumer healthcare business to Johnson & Johnson. Pfizer got a smaller OTC position via the Wyeth buyout--a business with $2.7 billion in 2008 sales. If CEO Jeff Kindler (photo) has his way, that number will only grow.

Put Sanofi in this running-to-catch up category, too; even with Chattem, its OTC biz will only be in fifth place globally, and CEO Chris Viehbacher (photo) appears to have big plans for Chattem expansion.

As for the companies that already have a big presence in the OTC market, think Johnson & Johnson--obviously, as the only true conglomerate in Big Pharma. Then there's GlaxoSmithKline and Novartis, both of which have been pursuing diversification as a hedge-the-prescription-drug-bets strategy. That's not likely to change, however. So on balance, we can probably look for more OTC action next year.

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