By Michael Applebaum

While the prescription-drug industry has been licking its wounds of late, things seem far healthier in drugstore aisles. Over-the-counter remedies posted respectable gains last year. According to IRI data, the cold/allergy category was up 6.9% to $2.34 billion, for example, while antacids fizzed with sales of $104.5 billion, an increase of 6.1%.

The best performance belonged to private-label OTC brands—clearly, a function of the consumers' desire to save money during the recession that economists have yet to call a recession. "Grocery prices are up 17%. Gas is up 100%. There's no question consumers are looking for the best value wherever they can get it," said Art Nystrom, Nielsen's associate client director for Walgreens.

Same Potion, New Lotion
For some time, OTC drug brands have tried to one-up each other with catchy new forms, such as gels, strips and powders. Many industry observers decry the extension strategy, which they call a drag on innovation in an overcrowded category.

The tide of "new" products appears to have slowed this year, but there have been several notable entrants. In February, GlaxoSmithKline launched Tums Quik-Pak, an antacid powder that dissolves on contact. A TV spot, via Arnold Worldwide, New York, featured George Jetson in need of speedy relief after downing a chili-dog food tablet. "Tums stands for 'fast relief,' but consumers are always striving for relief in more convenient forms," said Syd Rollock, vp-health and wellness at GSK.

A Real Stomach-Turner
Prilosec is facing a growing threat from makers of Omeprazole—the generic Prilosec. Manufacturer Perrigo in Allegan, Mich., first obtained approval to market Omeprazole back in 2006 (others are on the way), and its sales have been climbing ever since. Perrigo's fiscal third-quarter revenue shot up 39%, to $504 million. As of March 31, Prilosec's 12-month sales were up 4% to $391.3 million, per IRI, while sales of private label antacids had jumped 10.4% to $144.5 million.

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