Kalorama: Despite predictions to the contrary, OTC drug market not recession-proof
NEW YORK — Despite predictions that consumers in recessionary times would flock to cheaper over-the-counter drugs, the world's over-the-counter drug market grew just 3.5% in the past three years, according a report released by Kalorama Information.
"Results over the past few years may put to bed the theory that OTC drug sales go up during a recession," Kalorama Information publisher Bruce Carlson said. "It's something that was broadly predicted, including in our own reports. It turns out that OTC drugs were affected by consumers having less cash in their pockets just as much as other products were."
According to the report, the $78 billion market for over-the-counter medicines behaved as many products in the recent recession did: almost no sales growth in 2009 and slowly increasing but below average growth in the past two years.
Kalorama supplied a few possible reasons for the slow growth: consumers reduced doctor visits and sought to trim all medical expenditures since 2009, which dampened the benefit from customers preferring lower-priced OTC drugs; lower-priced drug store brands competed well with brand-name products, reducing prices paid; and increasing numbers of patients insured through Medicaid and Medicare were better able to purchase prescription products, reducing the need for OTC purchases.