Claritin has been sold OTC in most countries for many years. In the US, however, the OTC allergy market has been dominated by older, sedating antihistamines, led by Pfizer's Benadryl (diphenhydramine). This is despite the fact that the newer products are agreed to be safer: for example, a USA Today investigation in 2000 estimated that there were 600 automobile fatalities in the US each year due to the sedating effects of OTC antihistamines.
One major reason for keeping Claritin and its peers prescription-only was profit, and it is no coincidence that Schering-Plough had avoided OTC sale of its leading drug in the US until the end of its exclusivity began to loom. In 2001, the Claritin range accounted for approximately one-third of the company's revenues, and were the pharmaceutical products most heavily promoted to consumers.
US market development
The first effective antihistamine was discovered in 1944, and diphenhydramine was introduced the following year. As Benadryl, it was still the leading OTC antihistamine in the US in 2002; it went from prescription-only to OTC in 1981. Others include Schering-Plough's Chlor-Trimeton (chlorpheniramine), which went OTC in 1976. The main drawback of these older products is that they affect the central nervous system, causing sleepiness and impaired reactions, and their anticholinergic activity can also lead to dry mouth and urine retention.
Hoechst Marion Roussel (now Aventis) launched the first non-sedating antihistamine, Seldane (terfenadine), in the US in 1985. It was being considered for OTC sale when reports arose of dangerous cardiovascular side-effects and it was withdrawn, as was Johnson & Johnson's Hismanal (astemizole). Aventis then linked up with 'improved chemical entity' specialist Sepracor, and introduced a safer version, Allegra (fexofenadine), in 1996. Claritin was launched in 1993 and the leading trio in the R6A systemic antihistamine class was completed with the introduction of Zyrtec (cetirizine), developed by UCB, by Pfizer in 1996. Unlike Allegra and Claritin, Zyrtec causes a very slight degree of sedation.
US antihistamine (R6A) market share
12 months to September 2002
Source: MIDAS
Claritin rapidly became the top-selling systemic antihistamine in the US. According to IMS data, Claritin, Allegra and Zyrtec had combined US sales of over $3.3 billion in the 12 months to September 2002. By comparison, Benadryl, the OTC leader with over 40% of the market, had sales of less than $55 million in the same period, according to IMS data.
While health insurers like Wellpoint had asked the FDA to move the newer antihistamines OTC, saving them millions of dollars, there was no action from either the agency or Schering-Plough until early 2002 - though an FDA panel had deemed them safe for OTC sale in May 2001. In February, US Health and Human Services Secretary Tommy Thompson said he was considering OTC status for the three leading products, despite opposition from their manufacturers - conscious of the lower profits from non-prescription products.
Making the best of it
In August 2002, Schering-Plough lost a Claritin patent case that could have seen the drug's US exclusivity extended into 2004; it had sued a number of companies that had filed applications to market generic copies. In January 2002, it had finally introduced Clarinex (desloratadine), an active metabolite of Claritin designed to work faster and for longer than Claritin. Delays in the approval of Clarinex, however, left Schering-Plough little time to convert Claritin users to the newer product before the loss of exclusivity at the end of the year - though it did price Clarinex lower as an incentive.
Shortly after its legal defeat, Schering-Plough made a U-turn on its long-held stance that Claritin should not be sold OTC, and made an application to the FDA to transform its cash cow into a non-prescription product. In November 2002, this was approved, for all five Claritin presentations in their original prescription strengths (though its use in hives was yet to be finalized):
- Claritin Tablets (once-daily)
- Claritin RediTabs (orally disintegrating once-daily tablets)
- Claritin-D 24 Hour (once-daily tablets plus decongestant)
- Claritin-D 12 Hour (twice-daily tablets plus decongestant)
- Claritin Syrup (liquid formulation for children over two years of age)
Massive savings for insurers...
Merck & Co's pharmacy benefits manager Medco Health Solutions said the move would save health plans and employers up to $500 million. In 2002, its clients spent approximately $1.3 billion on non-sedating antihistamines, including over $600 million on Claritin. It is working with its clients to help them save up to 30% of their costs in the category.
The OTC availability will affect both Claritin and its competitors: insurers are less likely to cover Allegra, Clarinex and Zyrtec if patients can buy their own Claritin - or a generic copy - OTC instead. They will probably only be approved for patients in whom Claritin causes side-effects or shows little effectiveness, and charged at the highest co-payment rate.
This led to criticism from the American College of Allergy, Asthma and Immunology, whose President said, "The decisions are being made in the boardroom and not in the exam room as to what's in the patient's best interest." The ACAAI was also concerned that cost would force some allergy sufferers to use older, less safe productsl; moreover, they believe some patients will seek medical advice and care later than normal, when their disease is more advanced and the risk of co-morbidities, such as asthma, has increased.
...but not necessarily for consumers
Some patients will actually be worse off: one month's supply of Claritin cost $80-95 on prescription, but much of this was covered by the insurer. Schering-Plough cut the cost up to 75% for OTC sale, to 92 cents up to $1.17 a pill, but patients who paid less than approximately $30 a month in co-payments to their insurer (and many paid only $5-20) will therefore have to pay more for a month's supply.
Joining OTC Claritin will be generic versions of loratadine, including one from Johnson & Johnson and another, branded as Alavert, from Wyeth. When it approved the OTC switch for branded Claritin, the FDA also said any generic copies would only be sold OTC as well. Wyeth plans to launch Alavert on December 20, though Schering-Plough is still appealing the August patent ruling. Wyeth had not given any guidelines on pricing, but Schering-Plough's annual revenues from Claritin are expected to drop to the region of $400 million.
The FDA is still considering OTC status for Allegra and Zyrtec (and Clarinex, thanks to an April 2002 petition from Wellpoint), but Aventis is confident that Allegra can withstand competition from OTC/generic Claritin. It has teamed up with Cima to create a fast-dissolve version of Allegra, and is working on extending the product's uses. Pfizer too believes consumers will be loyal to Benadryl. Nevertheless, the availability of OTC Claritin represents a seismic shift in the US antihistamine market, and could provide an interesting model for further switches, such as the proton pump inhibitors (e.g. Prilosec) for heartburn.