Three Cheers For Colds And Flu

Seasonal ailments promote healthy OTC sales for supermarkets, especially those with in-store pharmacies.

The cold and flu season is on its way, and that's good news for supermarket over-the-counter (OTC) medication sales.

"The big drivers of OTC medications are ailments that are going around — like the flu and colds," says Laura Miller, senior economist at the Alexandria, Va.-based National Association of Chain Drug Stores (NACDS). "A lot of the ups and downs in OTC sales are really dependent on that, more so than changes in the lineup of products."

Once again, the Centers for Disease Control and Prevention (CDC) is urging consumers to get their flu shots, and while the CDC isn't predicting a particularly severe flu season this year, the agency believes it's likely that the 2009 H1N1 influenza virus will continue to spread, along with seasonal viruses during the 2010-2011 flu season in the United States.

This year, Atlanta-based CDC says people 65 and older can choose from two flu shots: the regular one that will protect against three different flu viruses, and a new vaccine designed specifically for older consumers that contains a higher dose the agency says should result in a stronger immune response.

The CDC cautions that the only drugs that can effectively treat those who get the flu are prescription antivirals. Nevertheless, consumers can be expected to look for OTC relief, as they always do for flu-like symptoms and colds alike.

As such, supermarket pharmacists can expect to field many related shopper inquiries during the upcoming cold and flu season for advice as to what OTC medications they can use, which obviously can influence sales, particularly for stores that have in-store pharmacies vs. those that don't.

"I've seen anecdotal evidence that supermarkets with in-store pharmacies have higher OTC sales than those without a pharmacy," says Miller. "I believe it's because people ask for advice from the pharmacist about what over-the-counter medicines they can take for whatever happens to ail them."

Miller believes that pharmacies, including those within supermarkets that offer flu shots, will generate significant profits — both from the shots themselves, and quite possibly from incremental sales to consumers who come in for the shots.

"I suspect that offering flu shots will have an impact," she suggests. "Retail pharmacies did a tremendous business in flu vaccines last year, and that had a significant positive impact on the bottom line for the vaccine, and it may have contributed to other product sales as well. A lot of times when people go in for prescriptions, they purchase something else, including OTC products."

In recent years, the Food and Drug Administration has approved dozens of formerly prescription medications to be sold over the counter, including Exedrin Migraine, Rogaine, Zantac, Tagamet HB, Nicoderm, Claritin, Prilosec, Advil PM, Prevacid and, just last year, the Plan B One Step contraceptive.

"The NACDS 2010-2011 Chain Pharmacy Industry Profile" pointed out that such changes shift the purchase from third-party payers to consumers, and return pricing power to the retailer. Thus, rather than being subjected to the rates set by the insurance companies, retailers are able to have more control over the pricing of those products once they become OTC.

However, there have been indications from the FDA of some concerns regarding OTC switches. Not only has the pipeline of drugs waiting for switching been reduced, the agency has also taken a cautionary approach with some that have previously been approved, such as Zicam and Alli.

Cough Syrup Restrictions?

Another development underway at FDA could also affect supermarket OTC operations. An FDA advisory committee met in mid-September to address the potential abuse of dextromethorphan (DXM) cold medicine products and whether restrictions should be placed on their sale.

The concern, according to the U.S. Department of Justice, is the illicit use of DXM for "Robo-tripping" or "skitting" by teenagers — using products such as Robitussin and Coricidin to get high.

The Washington-based Consumer Healthcare Products Association (CHPA) has actively engaged parents and other groups to address OTC cough medicine abuse in general and DXM specifically in ways "that preserve the significant public health benefit of consumer OTC access to these important cough medicines."