Counter Actions

From now on, ask your local pharmacist about Sudafed.Leading retail chains this month began removing pill-form cold and allergy medications containing pseudoephedrine from shelves and placing them behind the pharmacy counter.The move came in response to legislative activity at both the state and federal levels seeking to mandate the same action in attempt to hinder the illegal manufacture of methamphetamines, for which pseudoephedrine is an ingredient. (See Related Articles.) Several states have already passed laws requiring the products in question to be removed from open shelves; legislation is pending in numerous others, as well as in Congress.Rather than wait to be told, Wal-Mart, Target, Walgreens, CVS and other leading retailers decided to remove the products and direct shoppers to the pharmacy department to obtain them. (See images at right.) It also has sent product marketers into emergency-strategy mode to find ways to keep their brands "visible" within stores. Information Resources, Inc. this week issued a report tracking the sales impact these shelf bans have had in two states that already have laws. The following is a release discussing the findings.June 6, 2005 -- Across the country, consumers seeking relief of allergy/cough/cold symptoms will be required to alter their typical shopping process in many states and within several leading retailers nationwide by requesting their preferred products at the pharmacy counter, rather than simply selecting them from the shelf. In fact, their favorite product may not even be available, as shelf space behind the counter is limited and not all brands will have a space.Designed to inhibit the use of over-the-counter products containing pseudoephedrine (PSE) in the making of the illegal drug methamphetamine, current and pending legislation across the majority of states, proposed national legislation, and initiatives of major retailers to place products containing PSE behind pharmacy counters are not only changing the way consumers shop, but are also creating major new forecasting, marketing, and merchandising challenges for manufacturers and retailers. The varying requirements by state have added tremendous complexity to effectively managing this category.To help industry participants understand the current and potential impact of these events on category sales and opportunity, Information Resources, Inc. conducted an extensive study of sales trends in Oklahoma and Illinois -- states in which PSE legislation has been in effect long enough to measure impact -- pre- and post-legislation. Study results were revealed today at the NACDS Marketplace Conference in New Orleans by Robert Doyle, Senior Vice President of IRI's Healthcare Solutions Group.Dramatic Sales Impact in OklahomaThe study found that in Oklahoma, where legislation requiring that all pill-form PSE products be placed behind pharmacy counters was enacted in April 2004, the number of PSE items available to consumers was reduced by more than one-third. Further, during the 12-month period following legislation, PSE product volume sales in Oklahoma declined 16% versus the prior year, while non-PSE product sales increased 24% across food, drug and mass merchandise channels (excluding Wal-Mart). Many consumers are choosing to switch to non-PSE products, rather than spending the extra time to request PSE products at the pharmacy.The legislation has not affected all sales channels equally. PSE product sales actually increased significantly in drug stores in the weeks following legislation, but suffered major declines in grocery stores, where item reduction was more dramatic and opportunity was more limited due to the number of stores without pharmacies. The net result has been a shifting in volume share of PSE products from grocery stores to drug stores. This is bad news for grocery stores, which are likely missing out on the sale of other products, as well, when consumers go to drug stores instead for their allergy/cough/cold products.Minimal Sales Impact in Illinois Less stringent legislation that only requires single-ingredient PSE products (but not combination products), to be placed behind the counter, reported compliance issues in urban areas and a strong allergy season, post-legislation, reduced the sales impact in Illinois. While sales growth of non-PSE products has recently outpaced PSE product growth, the PSE growth trend in Illinois is positive."The allergy/cough/cold category is in a state of flux. Both manufacturers and retailers are struggling to accurately assess demand for both PSE and non-PSE alternatives and need to quickly implement strong consumer marketing and communication programs to ensure that they protect and grow share within this incredibly valuable consumer segment," explains Doyle. "Ongoing, state-by-state and retailer-by-retailer tracking of consumer purchase behavior and sales trends is imperative, as is strong collaboration between manufacturers and retailers."About the ReportFindings presented in Planning for the Unplanned: Understanding the Impact of New and Potential State Legislation on the Cough/Cold Category are based upon an extensive analysis of several IRI data sources: the InfoScan sales tracking service, the RxPulse Patient Panel, and the MedProfiler Health & Wellness survey, as well as interviews with leading retailers and manufacturers.

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