Impact of parents embracing generics

Andrea Gardner Oct 19, 2010

Impact of parents embracing generics

Andrea Gardner Oct 19, 2010


STEVE CHITOAKIS: Johnson & Johnson’s voluntarily
recalled more bottles of Tylenol. There have been more complaints of the over-the-counter painkiller smelling musty and moldy. J&J also reports third-quarter earnings soon.
Those recalls of millions of bottles of Children’s Tylenol, Motrin and Benedryl could affect the bottom line by sending parents to other lesser-known brands.

Reporter Andrea Gardner explains.

ANDREA GARDNER: My baby Olivia is running a fever. Usually Id give her Infant Tylenol. But it was recalled back in April. So now, generic acetaminophen is my only choice. I don’t usually give my daughter generic drugs. I buy it for myself, but when it comes to my baby I go with the brand.

I asked consumer psychologist Kit Yarrow what that’s all about.

KIT YARROW: Parents are just 100 percent dialed-in to caring for their kids, and especially when we are dealing with health products, if there is any risk at all that you are jeopardizing that — that is going to drum up a boatload of guilt. That’s really driving a lot of brand purchases, that not only is your kid going to get over their cold, but that you’re a good parent.

But after months of having only generics to choose from, parents have realized there is no boogieman in the bottle. Yarrow says, this could be a game changer, especially in the down economy.

YARROW: I don’t see parents going back to branded products when they’ve realized that generics work just the same.

An early survey suggests moms are split. Just about half said they still trust brands like Tylenol the most. About a quarter said J&J products are about the same as generics. But only a small percentage of parents would need to change their minds to create a boon for generics manufacturers. Many drug stores have already asked them to ramp up production. One of the top makers, Actavis, says it has increased production five-fold for its children’s Ibuprofen products.

But pharmaceutical analyst Damien Conover with Morningstar says when the Johnson’s brands hit the shelf, the balance could shift.

DAMIEN CONOVER: You’ve got a brand name that is very entrenched in consumers’ minds. That is gonna be very difficult for other providers of these over-the-counter medicines to really come in and displace after the manufacturing comes back online.

Conover says expect a barrage of ads from J&J in 2011 and ’12, with a message of trust, and changes made in the wake of the recall.

In Los Angeles, I’m Andrea Gardner for Marketplace.

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