Modern Factors Shape the Emergency Contraception Market in the US

The over-the-counter (OTC) emergency contraception (EC) market is booming in the US driven by growing demand and less restrictive market regulations.  According to the Centers for Disease Control and Prevention (CDC), the percent of sexually experienced women aged 15–44 to have used EC has increased from 4% in 2002 to 11% between 2006 and 2010. More recently, retail sales of EC surged 86% between 2008 and 2013, making it the fastest growing of all OTC remedies. Strong growth is expected to continue as US policy makers recently eliminated behind-the-counter controls on Teva Pharmaceutical’s Plan B One Step (levonorgestrel), which has had significant impact on the retail environment and will influence brand sales moving forward. Additional factors, including the Affordable Care Act’s (AFA) policy towards birth control and recent doubts about efficacy in women of a certain weight, will add a volatile element to the market.

US: Forecast Growth by OTC Category 2013-2018

Source: Euromonitor International

EC, a historically controversial category, has undergone a series of regulatory changes over the past decade. After approving Teva Pharmaceutical’s Plan B for prescription-only use in 1999, the US Food and Drug Administration (FDA) allowed non-prescription access in 2006 for women aged 18 and older. Following a court ruling in 2009 stating the arbitrariness of the defined age, the restriction was lowered to 17, with those younger requiring a prescription. In February 2011, Teva Pharmaceuticals submitted an application to the FDA requesting non-prescription status for Plan B One Step for women under the age of 17. All signs pointed towards approval as the FDA later released a statement declaring there to be “well-supported and science-based evidence that Plan B One-Step is safe and effective and should be approved for non-prescription use for all females of child-bearing potential.” However, in an unprecedented action, the secretary of the Department of Health and Human Services (HHS) overruled the FDA’s decision, sparking significant controversy over whether decisions being made regarding EC were political or scientific in nature. Regulations remained unchanged until April 2013, when a US district court judge from New York ordered the reversal of the denied request and mandated that Plan B be available as OTC for all ages. After overwhelming pressure from medical and advocacy groups, the Obama administration backed down and the Justice Department announced in June 2013 that age restrictions would be lifted. Currently, Plan B is available to all ages without restriction as science appears to have trumped politics.

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The lifting of the age restriction certainly has the potential to increase sales for Plan B, which has been granted exclusive rights to all-age sales. However, in all reality, this opens up only a limited consumer segment in the US, sexually active females aged 16 and younger. According to the CDC, sexually experienced women aged 20-24 have the highest incidence of EC use with 23%, followed by women aged 25-29 with 16%. Women aged 15-19 have an incidence of 14%, which is likely lower among those 16 and younger. Also, with an increase in sexual education among teenagers, alternative forms of birth control, such as hormonal contraception and condoms, will be the first line of defence.

The truly significant development of Plan B being granted unrestricted OTC status is its availability in the retail environment. This product is now available in the aisle at a number of retailers across the nation, which will promote visibility, awareness and, given the sensitive nature of the product, provide an element of discretion as it will no longer be required to ask for the product at the pharmacy counter. Not only is Plan B more accessible in brick-and-mortar retailers, it is now available for purchase online, opening up a whole new distribution channel. While internet sales will most certainly promote growth of Plan B, it will be interesting to see to what extent due to contradictory factors. Given the urgency of use for EC since these products are only effective within 72-hours of sexual activity, many will prefer to visit their local drugstore, which constituted 52% of sales in2013, to purchase the product as soon as possible. On the other hand, online purchase will allow for nearly complete discretion and expedited shipping will make this a feasible option. Plan B One Step for example is in fact “Prime” eligible on Amazon.com.

As a result of increased accessibility, as well as an additional potential customer base, Teva Pharmaceutical has been given a tremendous advantage over its direct competitor, Next Choice by Actavis. Next Choice is still restricted to women aged 17 or older and prescription-only if younger.  Consequently, this brand is tucked away behind-the-counter and unavailable online. When searching for Next Choice on Walgreens.com, for example, the page redirects to the “similar product” Plan B. Though value share for Plan B and Next Choice were roughly even in 2012, 52% and 48% respectively, the gap grew in 2013 to 56% and 44% in favour of Plan B. This trend should continue as long as Plan B has exclusive OTC rights.

Although increased accessibility and demand will support EC growth in the future, other factors such as the AFA and the recent FDA review of efficacy among women of a certain weight, introduce a certain degree of unpredictability.  Under the AFA, all FDA approved contraceptive measures will be covered without charging a co-payment, coinsurance, or deductible when accompanied by a prescription. In all likelihood, this policy should have a limited impact on the EC market. Given the urgency and the implications of missing the 3 day window, many women will simply forgo visiting a health care provider and assume the cost. However, for those that do consult a physician, it may increase their awareness of alternatives, such as Watson Pharmaceuticals ella (ulipristal acetate) which is a stronger EC available by prescription only, which in turn may have a negative impact on future sales of OTC EC.

Another unfavourable factor for the OTC EC market is the uncertainty of effectiveness among women of a certain weight. The FDA will be performing a review following developments in the European Union and the updated labelling of Laboratoire HRA Pharma’s Norvelo stating a reduction in efficacy in women weighing 165 pounds or more. If the FDA finds scientific support for this reduction in efficacy, the gains in the customer base of adolescents aged 16 and younger would be more than negatively offset. About 42% of the female population aged 15 or older in the US is obese, and another 27% is overweight. Given current population estimates, this development has the potential to impact about 70 million women. While it is well-known that many OTC products are less efficacious among the overweight and obese populations, the implications of decreased effectiveness for EC are much greater than say for cough, cold, and allergy medications. Therefore, many of these women will prefer a method that they can fully trust, like the stronger prescription only EC ella.

While future EC retail sales growth in the US is unquestionable, developments in the retail environment, an updated health care policy, and a changing potential customer base adds a significant degree of uncertainty.