Because of its necessary nature, demand for cough and cold medicine will grow steadily
Los Angeles, CA (PRWEB) January 26, 2012
Over the five years to 2012, the Cough and Cold Medicine Manufacturing OTC industry has enjoyed stable growth. From 2007 to 2012, revenue is expected to rise at an average annual rate of 1.2% to $2.3 billion. Demand for over-the-counter (OTC) cough and cold medicines is primarily linked to the occurrence and severity of cold and flu seasons, and changes in private health insurance coverage. During the recession, a greater percentage of Americans were unemployed, causing the number of individuals with private health insurance coverage to drop. According to IBISWorld industry analyst Caitlin Moldvay, “as per capita disposable income dipped, consumers were more likely to turn to more inexpensive OTC alternatives.” Abnormally severe flu seasons during 2008 and 2009 also aided revenue growth during the recession. In 2008 and 2009, revenue grew 2.1% and 2.0%, respectively. After a slight dip during 2010 due to a mild flu season, revenue has continued to grow; in 2012, revenue is anticipated to rise 1.6%.
There are currently 21 companies in the industry; with no change compared to 2007. Industry manufacturers include large pharmaceutical companies such as Pfizer, Reckitt Benckiser and Johnson & Johnson. These companies produce household brand names such as Robitussin, Advil Cold & Sinus, Mucinex and Tylenol. The Cough and Cold Manufacturing OTC industry benefits from substantial economies of scale, which boost profit margins. Moldvay added, “considering the risks associated with drug development, profit margins for the industry are high.”
Private label brands will likely be a continued source of competition for the industry. They are typically owned by retailers or suppliers that do not primarily manufacture the products. Private label brands, often available at drugstores or discount retailers, will grow more popular over the next five years. However, rising per capita disposable income during the next five years will likely slow growth of private label brands as cost considerations become less of a deterrent for consumers. Because the industry manufactures a necessary product for American households, demand is expected to continue rising, aided by export growth during the period. Nevertheless, the industry will face continued external competition from the use of private label brands sold in drug stores, which are selling more OTC products.
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This industry manufactures over-the-counter (OTC) cough and cold treatments and suppressants. Products include systemic remedies like antihistamines and combination products, decongestants and medicated candies. The industry does not include companies that are primarily retailers, like pharmacies or department stores.
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