Over-the-counter (OTC) medicine also known as OTC or non-prescription medicine refers that people can buy medicines without a prescription. They are safe and effective when it is followed with the directions mentioned on the label or as directed by the healthcare professional. OTC medicines normally involve range of products for the treatment of aches, pains, and itches. Some prevent or cure diseases, like tooth decay and athlete's foot. Other medicines help manage recurring problems, like migraine and allergies. In the US, the Food and Drug Administration (FDA) decides whether a medicine is safe and effective to sell-over-the-counter.

What’s new in OTC drugs market?

Over-the-counter (OTC) market has developed rapidly over recent decades. New distribution channels such as the internet or mail-order have been authorized in several countries. Additionally, the OTC market has been opened to retailers beyond the traditional pharmacy. The purchase of OTC drugs through the internet or mail-order does not present any specific difficulty for Special Health Authority (SHA) compliers as long as it represents just an additional distribution channel for established traditional providers of pharmaceuticals. Apart from that, the FDA has regulated most over-the-counter (OTC) drugs-that is available without a prescription-through OTC monograph process. For instance, as per the reports revealed by the US Food and Drug Administration (USFDA) on March 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to aid response efforts and eases the economic impact of COVID-19. Moreover, the CARES Act involves statutory provisions that reform and modernize the way OTC monograph drugs are regulated in the US. The CARES Act offers new process to regulate these OTC drugs rather than rule making process. The Act also authorized FDA to assess user fees to provide additional resources to regulate OTC drugs. According to the FDA, this new process for regulating OTC drugs included in the CARES Act could improve FDA's ability to address identified safety risks in a more timely and efficient manner in the forecast period. 

Market Dynamics

Easy availability and manufacturing of OTC drugs drives the global market

As more prescription allergy medicines have switched to OTC, pinpointing more convenient and affordable option for the ever growing population. As per the statistics revealed by the Consumer Healthcare Products Association (CHPA), the number of allergy sufferers who use OTCs has gone up from 66% in 2009 to 75% in 2015. Additionally, as per the statistics revealed by the Information Resources, Incorporated (IRI), in 2015, on average US households spend about US$ 338 per year on OTC products. OTC medicines provide affordable treatment options for both consumers and the healthcare system. The availability of OTC medicines creates significant value for the US healthcare system of around US$146 Bn in annual savings relative to alternatives. These results in US$94.8 Bn in clinical cost savings (except doctor’s office visits and diagnostic testing) and US$51.6 Bn in drug cost savings (lower priced OTCs versus higher priced prescription medicines). Furthermore, 86% of the US adults believe responsible OTC medicines use help lower costs for population. 

Cost-benefits, positive results and broader accessibility propels the OTC drugs market globally

As per the data revealed by the Consumer Healthcare Products Association (CHPA), OTC medicines empower individuals and families to meet everyday healthcare needs of the patient pool. 96% of the US adults believe OTC medicines makes easy for the individuals to care for minor medical ailments. Also, 93% of US adults prefer to treat minor ailments with OTC medicines before seeking professional care. Additionally, 70-90% of all illness episodes are addressed with self-treatment. Apart from that, consumers and taxpayers save US$ 5.2 Bn annually of half of the unnecessary visits to primary care physicians by more self-care, including greater consumption of OTC medicines. For every dollar spent on OTC medicines, the US healthcare system saves more than seven dollars.

Segmental Analysis

Over-the-counter (OTC) drug market is segmented based on product type and distribution channel. By product type, the OTC drugs market is segmented as cough, cold, and flu products, analgesics, dermatology products, gastrointestinal products, vitamins, minerals, and supplements (VMS), weight-loss/dietary products, ophthalmic products, sleeping aids, and other product types. Based on distribution channels, the market is segmented as hospital pharmacies, retail pharmacies, online pharmacies, and other distribution channels. 

Regional Landscape

North America is anticipated to dominate the global OTC drugs market. Proper streamlining and mandatory regulations of over-the-counter drug products is one of the prominent factors that contribute for the growth of global OTC drugs market. Majority of over-the-counter (OTC) drugs are not regulated like prescription medicines. Manufacturers of prescription drugs submit the clinical data to FDA to prove safety and efficacy of OTC drugs. Moreover, most of the OTCs rely on a "monograph" system that entails evaluating the safety and effectiveness of active ingredients in the product rather than the product itself. The monograph for each category includes active ingredient, dosage form, doses or concentration, and mandatory labeling and is published as a final rule in the Federal Register and codified in the Code of Federal Regulations. For instance, in March 2020, Congress announced final approval to long-needed legislation to improve the safety of over-the-counter (OTC) medications. The bill namely, "Over-the-Counter Monograph Safety, Innovation, and Reform Act" had support from the Pew Charitable Trusts and a diverse group of medical, public health, industry, and consumer interest organizations.

On the other hand, Asia-Pacific is emerging markets for global OTC drugs market. This is highly supported owing to increasing healthcare industries and surge in investment of by the government to develop healthcare industries. According to the reports revealed by the Invest India, the hospital industry in India accounts for 80% of the total healthcare market. Over-the-counter (OTC) pharma products play a major role in the healthcare industry. In India, adult population preference of OTC drug is almost close to 76%, according to the statistics revealed by the International Journal of Recent Technology and Engineering (IJRTE). Among that, 71% of the population is from rural areas of India. Also, presence of major players in OTC drug market in India contributes for the growth of global market. These involve Sun Pharma, Amurtanjan, Cipla, Dabur, Emami, G.S.K, Himalaya, Herbal, Koplen Ltd., Nicholas Piramal, P & G, TajPharma, and others.

Competitive Landscape

The prominent players of over-the-counter (OTC) drugs market involve Johnson & Johnson Services, Inc., Bayer AG, GlaxoSmithKline plc, Sanofi S.A., Dr. Reddy’s Laboratories Ltd., Cipla Limited, and others

Market Segmentation

Market By Product Type

Cough, Cold, and Flu products
Analgesics
Dermatology Products
Gastrointestinal Products
Vitamins
Mineral, and Supplements (VMS)
Weight-loss/dietary products
Ophthalmic Products
Sleeping Aids
Others

Market By Distribution Channel

Hospital Pharmacies
Retail Pharmacies
Online Pharmacy
Others

Market By Geography

North America
•    U.S.
•    Canada

Europe
•    U.K.
•    Germany
•    France
•    Spain
•    Rest of Europe

Asia-Pacific
•    China
•    Japan
•    India
•    Australia
•    South Korea
•    Rest of Asia-Pacific

Latin America
•    Brazil 
•    Mexico
•    Rest of Latin America

Middle East & Africa
•    GCC
•    South Africa
•    Rest of Middle East & Africa