Homeopathy looms on horizon

MMR, Jan 23, 2006

NEW YORK -- Homeopathic analgesic medications, while still constituting a relatively small market when compared with conventional analgesic drugs, are experiencing strong growth, according to Dale Nepsa, vice president of Hyland's Inc., a major supplier of homeopathic medicines, including several internal homeopathic analgesic drugs.

Until the late 1980s homeopathic drugs were sold primarily through natural food stores, according to Nepsa. Hyland's began selling its products through major retail drug chains in 1992. Nepsa estimates that the company's annual sales through discount stores now exceed $400 million. "Today we sell in nearly every drug chain in America, and they all have a core of about 10to 12 of our items," he says. He adds that natural food stores still account for a healthy share of the company's homeopathic products.

Hyland's offers homeopathic formulas for migraine headaches, arthritis and leg cramps. Nepsa says that the company's Leg Cramps with Quinine product accounts for 81% of the market of homeopathic remedies for leg cramps; Hyland's sold over $3.2 million of the leg cramp formula in the 52 weeks ending October 2, 2005, according to data from Information Resources Inc. He notes that superstores have been willing to take a chance on selling more homeopathic remedies based on the success of the company's leg cramp formula.

Nepsa says that the company's success in selling its products through drug chains and other retail stores has helped homeopathic products to grow overall and has even helped the natural food outlets to flourish as well. "That is because, by selling through mass market retailers, we now have more money for advertising and development," he points out.

In Nepsa's view homeopathic drugs are merchandized most effectively when they share shelf space with conventional medications; they should not be grouped in their own category, he says. "Merchants have trained people to shop by condition," he adds. "If you have pain you go to the analgesics section. In the past some retailers have tried to merchandize homeopathy as a category section, and it is the worst thing they could possibly do."

Nepsa says Hyland's works with various category managers at each retail chain. "We participate in their programs just like other over-the-counter drug companies."

Homeopathic medicine is based on the idea that active ingredients that are harmful when taken in large doses are actually therapeutic when taken in minuscule amounts. "Homeopathic medicines have two benefits: One is that they work; the other, even more important, is that they are very safe," Nepsa says.

Nepsa notes that homeopathic products are considered drugs under federal law and are regulated by the federal government in the same way as such conventional drugs as Tylenol are regulated. Homeopathic drugs are used to treat acute symptoms and are not to be confused with herbal medicines or vitamin supplements, he points out. "You will see drug facts on the back of our packages," he says.

Internal                     DOLLAR SALES            UNIT VOLUME
Analgesics               $218.1 mil. (+5.8%) *   37.9 mil. (+6.3%) *
(Liquids)
                            Percent Change          Percent Change
                                 vs.                     vs.
                           Prior 12 Months         Prior 12 Months
For 52 Weeks                 Supermarkets            Supermarkets
Ending 11/27/05                 +1.1%                   +0.8%
                             Drug Stores             Drug Stores
                                +8.7%                   +9.6%

Top Brands                      Dollar                   Unit
                               Sales **               Volume ***

 1. Children's Motrin         $54.1 mil.               8.9 mil.
 2. Tylenol                    47.3 mil.               7.2 mil.
 3. Children's Tylenol         39.6 mil.               6.5 mil.
 4. Infant's Motrin            22.4 mil.               3.1 mil.
 5. Children's Advil            7.5 mil.               1.2 mil.
 6. Advil                       2.1 mil.               0.4 mil.
 7. Tylenol PM                  1.2 mil.               0.2 mil.
 8. Gel Stat                    0.7 mil.               0.1 mil.
 9. Elixsure                    0.7 mil.               0.2 mil.
10. Motrin                      0.7 mil.               0.1 mil.

* Total of supermarkets, drug stores and discount stores excluding
Wal-Mart Stores Inc.

** All private label brands combined total $41.8 mil.

*** All private label brands combined total 9.9 mil.

Source: Information Resources Inc.