[Obesity Discussion]

Drug Store News Jan 16, 2006


Weight-loss remedy is a heavy favorite to be next successful Rx-to-OTC switch

Michael Johnsen
There are as many as three medicines caught in the Rx-to-OTC switch pipeline that, assuming they are approved, will likely have great impact on OTC sales in the years to come. The problem is that only one appears likely to make it through any time soon: GlaxoSmithKline's weight loss remedy, orlistat.

A pair of Food and Drug Administration advisory committees will begin considering GSK's orlistat switch application Jan. 23, and a decision from the FDA could come as soon as October.

If GSK is successful in bringing the diet aid drug over-the-counter--in the weeks preceding the first advisory committee meetings, many experts suggested the switch seemed likely--it will mark the first OTC medicine approved for weight loss since phenylpropanolamine, also known as PPA, was pulled from the market in 2000. Of course, GSK would have a monopoly on OTCs approved for weight loss--most other weight loss aids in the category rely on such natural ingredients as thermogenic herbal complexes. And, while that would be a tot in itself, weight loss just may be one of those categories that is more successful OTC than in the prescription-only environment--much like nicotine replacement, another strong category for GSK.

Despite the higher dollar ring on the other side of the counter, the sheer volume created by the increased consumer accessibility of an OTC switch could add up to big dollars for GSK, especially in a category such as weight loss. Obesity, like smoking, leads to myriad potentially deadly health conditions. And, like smoking was not too long ago, it is a national health issue of epidemic proportion. Clearly, the numbers are there. It's riving up health care costs, driving down life expectancy and, in the end, the impetus is on the consumer: i.e., lose weight, quit smoking, etc.

Moreover, weight loss is not necessarily a condition for which a patient makes a doctor's appointment, noted Laura Mahecha, a switch analyst with market research firm Kline & Co.---especially not if that person has already tried dieting on his or her own and failed. That s a large portion of the population. According to Mahecha, orlistat could reach as high as $200 million in overall sales

That would quickly put orlistat on pace to become king of the OTC diet aid mountain. For the 52 weeks ended Nov. 27, the top ,three items in the category included Carter-Reed's Relacore, which is well on its way to reaching $25 million in annualized sales across food, drug and mass (minus Wal-Mart), according to Information Resources Inc., followed by Cortislim at $21.5 million and TrimSpa X32 at $17.2 million.

Meanwhile, as a prescription-only remedy, Roche, which marketed orlistat under the brand name Xenical, reported $55.4 million in sales for the nine-month period ended September 2005.

And even if orlistat is allowed-to switch, at least two factors could pose significant challenges. First, there is the matter of its high price point--projected to be as high as $100--that could be somewhat prohibitive for many consumers, and second, its potential to produce some rather unpleasant side effects, including oily stools and flatulence, should the orlistat dieter not adhere to a strict low-fat diet.

The cost really may not be too much of a problem. Increasing numbers of items in the supplement and weight loss aisles are entering the category with prices in excess of $50. Retailers seem to have managed to control shrink, as evidenced by the numbers of these products that remain on shelf rather than behind the pharmacy counter or glass.

But, the side effects may be a bigger problem. Orlistat works by preventing the ingestion of fat, which causes its unpleasant side effects--any fat not absorbed by the body must be eliminated. For some, those unpleasant side effects may help increase compliance with their low-fat diet. But others may simply be turned off by the experience.

Side effects aside, there may be an opportunity to play off the low-fat connection, cross-merchandising a product such as orlistat alongside displays of low-fat foods--however that is an adjacency that will be more easily leveraged by supermarket pharmacies than traditional drug stores.

As for other drugs caught in the switch pipeline, there are some experts that still hold out hope for a successful statin switch sometime within the next year or two. But the short-term chances seem slim, to say the least. Past usage studies have determined that statins have a poor track record of self-selection among OTC patient groups, a fact that has doomed past switch applications for such drugs as Mevacor and Pravachol. Neither Merck nor Bristol-Myers Squibb--which have presented their respective cases to FDA no fewer than three times in the last five years to no avail--have been able to figure out how to educate consumers on appropriately self-selecting a treatment for an asymptomatic condition such as high cholesterol. BMS is expected to present Pravachol for a potential switch candidate a second time, though a timeline has not been established. Pravachol loses patent protection in April.

Still, there are some that remain bullish on a statin switch. "Statins will move to OTC status; it's just a question of when and if some form of [behind-the-counter] conditions will be required," stated Susan Babinsky, senior vice president of Kline's Healthcare Consulting Practice. "Our analysts are projecting OTC revenues of more than $500 million in 2007, based largely on switch revenues from Mevacor and Pravachol."

Then there is Plan B, which has been mired in politics rather than safety issues. There is little concern that the emergency contraceptive poses any threat to safety; the debate surrounding the controversial emergency contraceptive has been decidedly more philosophical than science-based.

While it is conceivable that acting FDA commissioner Andrew von Eschenbach will render a decision once and for all as Congress has demanded, prevailing theory is that decision will be delayed at least until a new FDA commissioner is confirmed by the next presidential administration--sometime in 2009.

MICHAEL JOHNSEN