P&G Launches ZzzQuil To Enter OTC Sleep Aid Category

While other national brand names compete in the OTC sleep aid tablet category, P&G’s NyQuil line extension is by far the biggest name among current players in the liquid product category, which has annual growth of nearly 80%.

Procter & Gamble Co.’s ZzzQuil products leverage the firm’s VicksNyQuil brand into the rapidly growing consumer health care sleep aid market.

While other national brand names compete in the OTC sleep aid tablet category, the Cincinnati-based household, personal and health care giant’s NyQuil line extension is by far the biggest name among current players in the liquid product category, which has annual growth of nearly 80%, according to SymphonyIRI Group’s market research.

Entering the OTC sleep aid market likely is more attractive to drug manufacturers and marketers since Johnson & Johnson’s McNeil Consumer Healthcare business voluntarily recalled its Simply Sleep product after coming under fire from FDA for quality control oversight. McNeil has yet to relaunch Simply Sleep and several other OTC brands the J&J business pulled from the market in the wake of FDA’s investigation into its OTC manufacturing (Also see "McNeil Expands Tylenol Recall As FDA Criticizes Firm's Response To AERs" - Pink Sheet, 18 Jan, 2010.).

P&G's single-ingredient ZzzQuil (diphenhydramine) sleep aid in tablet and liquid forms.

Photo courtesy of Procter & Gamble

P&G extended its OTC drug business into the sleep aid market with its ZzzQuil diphenhydramine 50 mg products, indicated for occasional sleeplessness, after opting out of a marketing rights agreement with Somaxon Pharmaceuticals Inc. for a potential OTC version of a currently Rx drug indicated for insomnia .

In a June 18 release, P&G described the potential market for OTC sleep aids by noting that National Sleep Foundation research shows more than one in four adults suffer from occasional sleeplessness. Indeed, science and technology market research firm BCC Research in a 2010 report said it expected the segment to grow 8.9% between 2009 and 2014.

NSF board member Joseph Ojile, a physician and founder and CEO of Clayton Sleep Institute, said in the release that OTC sleep aids containing diphenhydramine, like lifestyle changes, behavioral approaches and physician care, “are a good option for people whose only symptom is not being able to fall asleep occasionally.”

Single-Ingredient Approach

A P&G spokewoman noted while ZzzQuil builds on the brand, NyQuil has multiple active ingredients –acetaminophen and diphenhydramine – and is indicated for cough/cold.

ZzzQuil “is just for sleep and, because Vicks NyQuil has a strong equity with a cold, it seemed like a natural extension for consumers that just need to sleep, not when they’re sick or sore,” the spokeswoman said.

Indeed, analgesics and combinations are still the largest growing OTC drug by class with the market expected to reach $635 million in 2014, a 9.2% increase since 2009. But antihistamines are a close second, with 7.9% growth and $212.2 million in 2014, according to BCC Research.

Formulating ZzzQuil without acetaminophen also gives P&G the opportunity to appeal to consumers cutting down on use of the ingredient after FDA in 2009 required manufacturers to add to product labels new warnings about the risk of liver toxicity due to overdose (Also see "Acetaminophen Overdose Risk Persists Despite Label Changes – Study" - Pink Sheet, 11 Jun, 2012.).

“We’re becoming more aware of that complication anecdotally, so you get to the issue that you can’t afford to take risks, and even if it’s relatively small, it’s still there,” Ojile said in an interview.

The single-ingredient formulation not only could differentiate Zzzquil from acetaminophen-containing OTC sleep aid products, like McNeil’s Tylenol PM, but also from products containing ibuprofen, like Advil PM from Pfizer Consumer Health Care Group.

Although those products are indicated both for pain relief and sleep, Ojile pointed out consumers turn to them to purchase a sleep aid without a prescription. “If you have occasional sleeplessness, the other medicines in [cough/cold and pain relief products] can give a fair amount of side effects,” he said.

OTC brand consultant Donald Riker said the combination of being linked to the NyQuil brand and having a single-ingredient formulation could position ZzzQuil well in the marketplace. “ZzzQuil, as a simple, one-ingredient, old fashioned diphenhydramine product, is equivalent to others such as Unisom and many store brands,” said Riker, president and founder of On Point Advisors LLC.

However, competition already is strong in the category and consumers using pain relief or cough/cold products for sleeplessness might not want to change brands, he said.

“The whole point of NyQuil was to relieve systems so you could rest,” but now P&G is trying “to shoehorn NyQuil into a narrower sleep-aid positioning.” Riker said.

He added that “the real competition” for Zzzquil will primarily be Advil PM and Tylenol PM, followed by generic Rx products, private-label OTCs and the Unisom line from Sanofi’s Chattem Inc. business, which include diphenhydramine, acetaminophen/diphenhydramine and doxylamine products.

The NyQuil brand’s link to treating sleeplessness is not lost on the Sleep Foundation. “People have a degree of comfort with that brand and patients will frequently tell us that they were using [NyQuil] for sleep.”

Big Name In Category

The brand equity could have a more pronounced impact in the liquid sleep aid category, which currently does not include a product marketed by a firm close to P&G’s size or with close to the brand recognition of NyQuil.

But the absence of a major player is not hindering sales growth in the category. Liquid sleep aid product sales grew 78.4% to $8.1 million in the 52-week period through May 13, according to SymphonyIRI’s data from supermarkets, drugstores and mass market retailers excluding Walmart.

The dominant products in the category are NeurobrandsLLC’s Neuro Sleep, with $4.2 million in sales for 57% of the market after 205.6% growth, and SarPes BeveragesLLC’sDream Water, with $2 million in sales for 24.8% market share after 246.9% growth in the time period.

Chicago-based SymphonyIRI’s data show OTC sleep aid tablet sales grew 12.6% to $158.7 million during the period. Private-label product sales lead the category with $70.2 million in sales, 44.3% share and 12% growth. The Unisom line and GlaxoSmithKline Inc.’s Sominex are the leading brand-name OTC products. Nutritional supplements promoted for benefiting sleep account for substantial market share in the category, at around $101 million in 2012, according to SPINS.

In addition to those indicated for sleep, some single-ingredient diphenhydramine tablet products are marketed for allergy relief, adding to P&G’s competition in this category. But taking the pain relief drug out of the mix serves another purpose: redefining the category.

“We believe that removing acetaminophen from ‘sleep aid’ products helps define the sleep aid category for consumers and will reduce the confusion within the category,” said Vincent Porpiglia, co-founder and chief operating officer of SarPes.

The Miami-based firm makes a melatonin liquid sleep aid and packages it in 2.5-ounce shots, like popular energy drinks. The firm reported 275% growth in net sales year to date.