BY MICHAEL JOHNSEN
Sales of pseudoephedrine products sold behind the pharmacy counter are on the upswing again, some 32 months after being mandated to BTC placement by federal legislation with the passing of the Combat Meth Act, and accordingly, are attracting a more loyal consumer to the category.
“[Loyal consumers] spend twice as much on the PSE category as the average consumer spends on [all other] front-end cough-cold products,” commented David Howenstine, vice president of category and trade development for Wyeth Consumer Healthcare. “We also know that they make twice as many trips to purchase these products as the average cough-cold front-end consumer.” Spending twice as much and visiting twice as often makes for a very valuable consumer, Howenstine said.
“These are people who probably used pseudoephedrine-based products before they were restricted, who felt that they were the best products available to them and who have since decided that it’s worth standing in line at the pharmacy counter, showing their license and signing their name in order to get those products,” Jim Mackey, senior vice president of sales and operations for Schering-Plough, told Drug Store News.
Sales of PSE products range anywhere between $450 million and $600 million across food, drug and mass (minus Wal-Mart) on an annualized basis, according to data shared by a few suppliers in the category. And while there may be some disagreement in what SKUs are included into that PSE sales mix, suppliers reported a low-single-digit decline in annualized sales of around 3 percent. But for the latest 26 weeks, each of the suppliers reported, PSE sales experienced double-digit growth of almost 16 percent. Historically, however, comparisons are made to the $1.2 billion in PSE sales that food, drug and mass (minus Wal-Mart) outlets captured prior to the migration behind the counter, as was reported by the Nielsen Group for 2005.
And for that reason, sales of PSE products were always seen as a net negative. The product assortment was rationalized from some 60 SKUs to less than 20, including store brand equivalents, and not only was the pharmacy counter considered a hurdle to access for those products, the same federal legislation that relocated PSE behind the counter placed restrictions and logging requirements on sales as well.
Pseudoephedrine products are still selling well, even after new regulations placed them behind the counter.
That presented a double-whammy for pharmacy operators: Not being able to buy sufficient quantities to treat a cold for an entire family presented a likely inconvenience for the consumer, and the amount of time required of the pharmaciy technician, and in some states the pharmacist, to log the PSE sale presented a definite inconvenience for the pharmacy operator, who already is pressed thin.
But now the formula has changed. Federal sales restrictions have more or less regulated the sale of PSE products into those retail outlets with a pharmacy. And both the comparisons of PSE sales before and after BTC migration, as well as the SKU rationalization of the PSE category, have cycled through.
Now PSE sales are growing again in their own right.
“We sell more Claritin D today from behind the pharmacy counter than we sold of Claritin D when it was a full-access product,” Mackey noted. Schering-Plough, along with other suppliers like McNeil Consumer (particularly with the launch of Zyrtec-D earlier this year) and Wyeth, has continued to support its PSE products through consumer advertising, which may help to explain why the category didn’t sail altogether into the sunset with its BTC placement. It’s that consumer
advertising effort from these suppliers, combined with the increased level of brand loyalty enjoyed by PSE marketers, that has helped to buoy the PSE category, Mackey said.
And retailers, too, have done their part to help support the segment. A more loyal consumer driven by consumer advertising into the store justifies line-of-sight merchandising behind the pharmacy counter, Howenstine commented, noting that as a best practice in the category, most retailers have optimized their BTC sets that way. “[It] helps build awareness and shopa-bility in-store,” he said.
And while the product may have been moved behind the pharmacy counter, the brands still maintain—and merit—presence on shelf, given that most PSE consumers still are shopping for their products in the self-care aisles. The placard system that has become standard for PSE products—where card replicas of the PSE products are placed within the cough/cold and allergy planograms—is an important tool in driving consumers to the pharmacy counter.
“About 70 percent of all pseudoephederine shoppers go to the shelf first,” not to the pharmacy counter, Mackey said, citing Schering-Plough research. “Of those 70 percent, about half of them will take the PSE card to the pharmacy … to execute the transaction.” And that shopping pattern is replicated even among shoppers who are buying their PSE products for the nth time. “On the third purchase, 50 percent of the shoppers are still going to the shelf first and using the card systems, [because] what the cards allow consumers to do is select brand, select size and shop price. They want to do all these things right there on the shelf just like they would when they’re making a normal purchase.”
The card system also helps retailers improve efficiency behind the counter. “What we have found is that a [PSE] purchase made with the card, because it makes it simple for the pharmacist to know what product is being selected, there is a 1.4-minute times savings per transaction,” Mackey said. That means “ 1. 4 minutes multiplied by the number of units sold in pharmacies today saves 1. 2 million man hours in the pharmacy [per year],” he added.
Another factor that helps improve efficiency behind the pharmacy counter is alphabetizing the products in the PSE set, Howenstine offered. It helps the pharmacist or pharmacy technician quickly locate the product when the consumer asks for it by brand name.
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