Aug 22

Written by: IRI Blog
8/22/2009 1:07 PM

Here at IRI we’ve shared with you many facets of the changing rituals of the American shopper, from buying more private label to preparing meals at home.

How are tightened budgets, a U.S. population with changing needs, and a newly engaged government reshaping the face of the healthcare industry in America today? We explore these issues in our new Point of View: “New Trends Give Healthcare Manufacturers and Retailers New Headaches,” where we dive into changing consumer healthcare habits, the chronic illnesses threatening our healthcare infrastructure, and an activist FDA.

We surveyed 1,000 American consumers to learn how their healthcare habits have evolved since the beginning of the downturn, and the results are staggering. A whopping 25% have lost their insurance, and 32% can no longer afford their high-priced medications. Financially, consumers or their spouses have lost their jobs (21%), have seen a cutback in income (20%), or have seen their savings deplete significantly (27%). So, how are consumers responding to these new pressures? They are visiting the doctor less (55%), seeing “minute clinics” (10%) and, most notably, are avoiding obtaining medical care at all (43%).

Consumer behavior in regard to medication is changing as well. Consumers are taking over-the-counter (OTC) medications instead of visiting the doctor (40%) and moving from prescription to OTC (over 20%). Brand name drugs are suffering as well, with nearly 44% of consumers switching to generics in the interest of saving money. Our report also covers dollar-stretching tactics consumers are employing, like reducing dosage by skipping days or cutting pills in half (30%). And, just as consumers are moving towards mass merchandisers and club stores for food, they are migrating to cheaper retail outlets like super centers and grocery stores for their healthcare needs.

Another major influencer in the changing healthcare industry is the declining health of Americans. Obesity is rampant, and with it comes other ailments, such as diabetes and heart disease. Cancer and arthritis are other powerful and prevalent afflictions taxing the U.S. healthcare system. What are the effects of these diseases, and what kinds of steps are healthcare CPG manufacturers, the government, and pharmaceutical companies doing to combat them?

Life-enhancing medications are playing a major role in the changing healthcare industry. The new increased longevity of Americans, despite chronic disease, is due in large part to innovations in pharmaceuticals and available prescription drugs. This increased life expectancy leads to a larger burden on Medicare and government services and can put a strain on consumer budgets, forcing consumers to tern to public assistance for help in paying for medications.

Lastly, we researched the impact of the newly activist FDA. The FDA is becoming increasingly stringent on new and old medications alike, and is also considering more active regulation of dietary supplements. The FDA is also becoming increasingly vocal on drug risks for consumers. This means longer approval times and higher costs for the introduction of new medications, and the possibility of more probes by health advocacy groups.

It is apparent that the healthcare industry is undergoing a transformative shift as a result of these micro and macro level changes. Our Point of View covers these changes in rich detail, and offers the necessary prescription for healthcare CPG manufacturers, pharmaceutical companies, and retailers to stay competitive in this new healthcare environment. From knowing the shopper and creating effective, affordable drugs to maintaining vigilance over the actions of the government, it is critical that the industry stay aggressive and innovative.

We welcome your insights and thoughts on this new study, and are excited to share this new report with you. As always, stay tuned for more research and commentary from us…

Best,

Steve Johnson

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