Product intros, promotions amp up competition

DSN estimates that annualized sales of cold and allergy products through mid-June were up 7.9%, representing almost $570 million in incremental dollars.

What are the chances of that happening again?

The coming cough-cold season is difficult to project. On one hand, this year's cough-cold incidence will be going against very strong illness rate numbers from last year. In addition, with both McNeil Consumer and Novartis Consumer supporting the relaunch of a number of cough-cold products, the category is expected to be very promotional this season, a factor that could squeeze margins.

But fighting marketing dollar against marketing dollar isn't the only cold-cough-allergy card suppliers will be playing this year — expect the introduction of a number of new products. "We often talk internally about the fact that our No. 1 marketing tool is product and the fact that product really is king," Matthew Mannelly, president and CEO at Prestige Brands Holdings, told analysts recently. "As you look into the first few quarters of fiscal year 2014, you're going to see some other major new product launches from Prestige," he said. He added that the challenge is clear: "to manage pediatrics and cough-cold in the marketplace in light of the returning brands and the heavy investments that we believe those returning brands will make."

Among allergy remedies, there is a potential new switch on the horizon that, if approved, would place the first OTC nasal steroid Nasacort AQ into the hands of Chattem marketing executives. The Food and Drug Administration held a public meeting considering that Rx-to-OTC switch July 31.

That switch could open the door to a new class of allergy medicines. "Whatever happens to one of the nasal steroids will happen to all eventually," suggested David Seltzer, chairman, CEO and president of Hi-Tech Pharmacal, which manages a generic version of a competing nasal steroid.