Contents:

Scope and Themes What you need to know Definition Consumer research methodology Abbreviations and terms Abbreviations Terms Executive Summary Sales driven by incidence, population factors A healthy market boosted by Rx switches and new product launches Tablets lead market as liquids slip and nasal products gain ground Mergers consolidate supply structure Ad & promo Professional staff drive sales to drug channel—even for common cold and allergy remedies The consumer Incidence of ailments and usage of remedies Attitudes towards CF&A remedies The ethnic consumer What the future holds Market Drivers Incidence of cold, flu, and allergies Key points Details Figure 1: Severity of flu (only), October 2006 Figure 2: Severity of nasal allergies/hay fever (only), October 2006 Seasonal severity Figure 3: Influenza seasonal severity, in the U.S., 2000-06 Higher contraction risk among children, women, elderly Figure 4: Population by age, 2002-12 Figure 5: Population of OTC flu remedy users, based on those confirmed to have the flu, by gender, 2002-12 Rx switches boost sales Uninsured turn to self-care, diagnosis Shift of pseudoephedrine to behind the counter Alternative remedies cut into OTC sales Vaccines and Rx remedies compete with OTC Figure 6: Preference for OTC vs. Rx cold, flu, and allergy remedies, October 2006 Market Size and Trends Market size Figure 7: Total U.S. retail sales of cold, flu, and allergy remedies, at current and constant prices, 2002-07 Wal-Mart estimate Market trends Multi-symptom relief Flavor Natural/organic ingredients Market Segmentation Cold, flu, and allergy remedy segments Figure 8: FDM sales of cold, flu, and allergy remedies, segmented by delivery form, 2005 and 2007 Tablets Figure 9: Sales of cold, flu, and allergy remedy tablets, at current and constant prices, 2002-07 Liquids Figure 10: Sales of cold, flu, and allergy remedy liquids, at current and constant prices, 2002-07 Nasal products Figure 11: Sales of cold, flu, and allergy remedy nasal products, at current and constant prices, 2002-07 Supply Structure Introduction Companies and brands Figure 12: Manufacturer FDM sales of cold, flu, and allergy remedies in the U.S., 2005 and 2007 Tablets Figure 13: Manufacturer brand sales of cold, flu, and allergy remedy tablets, in the U.S., 2005 and 2007 Liquids Figure 14: Manufacturer brand sales of cold, flu, and allergy remedy liquids, in the U.S., 2005 and 2007 Nasal products Figure 15: Manufacturer brand sales of cold, flu, and allergy remedy nasal products, in the U.S., 2005 and 2007 Advertising and Promotion Introduction Figure 16: Promotional expenditures of the top CF&A manufacturers*, 2005-06 Television marketing campaigns Schering-Plough Figure 17: Corocidin TV spot—high blood pressure-safe Pfizer, Inc. Figure 18: PediaCare liquid TV spot—pediatrician-endorsed Figure 19: Sudacare Shower Soother and Sudacare Vapor Plug TV spot—non-medicated Figure 20: Sudacare Shower Soother TV spot—non-medicated Procter & Gamble Figure 21: Vicks NyQuil and Vicks DayQuil TV spot—fast relief Figure 22: Vicks NyQuil TV spot—tried and true McNeil Figure 23: Children’s Motrin liquid TV spot—pediatrician-endorsed Figure 24: Tylenol Cold Multi-Symptom TV spot—multi-symptom; comparative advertising Figure 25: Children’s Tylenol Plus Cold TV spot—multi-symptom; doctor-recommended Adams Respiratory Therapeutics Figure 26: Mucinex DM TV spot—memorable character Wyeth Labs, Inc. Figure 27: Advil TV spot—multi-symptom relief Figure 28: Robitussin TV spot—wide product range Novartis Figure 29: TheraFlu Warming relief TV spot—restorative Figure 30: Triaminic Nighttime Cold & Cough TV spot—child-friendly advertising Other companies Figure 31: Zicam TV spot—consumer testimonial Figure 32: Zicam Cough Max TV spot—convenience Figure 33: Alka-Seltzer Plus liquid TV spot—multi-symptom relief Figure 34: Aleve cold/sinus TV spot—“real people;” circumvents pseudoephedrine restrictions Retail Distribution Introduction Figure 35: U.S. FDM and convenience store retail sales of cold, flu, and allergy remedies, by channel, 2005 and 2007 Drug stores Figure 36: U.S. drug store sales of cold, flu, and allergy remedies, at current and constant prices, 2002-07 Supermarkets Figure 37: U.S. supermarket sales of cold, flu, and allergy remedies, at current and constant prices, 2002-07 Mass merchandisers Figure 38: U.S. mass merchandiser sales of cold, flu, and allergy remedies, at current and constant prices, 2002-07 Convenience stores Figure 39: U.S. convenience store sales of cold, flu, and allergy remedies, at current and constant prices, 2002-07 The Consumer: Use of Cold, Flu, and Allergy Remedies Summary Incidence of ailments, usage of remedies Incidence of flu and allergies Figure 40: Incidence of flu and nasal allergies/hay fever, by age, January-October 2006 Severity of flu and nasal allergies/hay fever Figure 41: Severity of flu and nasal allergies/hay fever, by age, January-October 2006 Use of cold, flu, and sinus remedies Figure 42: Use of cold, flu, and allergy remedies, by age, January-October 2006 Preferred brands of cold, flu, and allergy remedies Figure 43: Preferred brands of cold, flu, and allergy remedies, by age, January-October 2006 Frequency of usage of cold, flu, and allergy remedies Figure 44: Frequency of usage of cold, flu, and allergy remedies, by age, January-October 2006 OTC vs. Rx cold, flu, and allergy remedies Figure 45: Preference for OTC vs. Rx cold, flu, and allergy remedies, by age, January-October 2006 Ailments treated with cold, flu, and allergy remedies Figure 46: Ailments treated with cold, flu, and allergy remedies, by age, January-October 2006 Household usage of children’s cold, flu, and allergy remedies Figure 47: Household usage of children’s cold, flu, and allergy remedies, January-October 2006 Types and brands of children’s remedies preferred among households Figure 48: Household preference for types and brands of children’s cold, flu, and allergy remedies, January-October 2006 Teen use of cold, flu, and allergy remedies Figure 49: Teen use of cold, flu, and allergy remedies, by gender and age, January-October 2006 The Consumer: Attitudes towards Cold, Flu, and Allergy Remedies and Their Side Effects Summary Attitudes towards cold, flu, and allergy remedies Figure 50: Attitudes towards cold, flu, and allergy remedies, by gender, August 2007 Figure 51: Attitudes towards cold, flu, and allergy remedies, by age, August 2007 Figure 52: Attitudes towards cold, flu, and allergy remedies, by number of children in household, August 2007 Side effects from cold, flu, allergy remedies Figure 53: cold, flu, and allergy remedy side effects experienced in the past 12 months, by age, August 2007 The Consumer: Ethnic Use of Cold, Flu, and Allergy Remedies Summary Incidence of ailments, usage of remedies among ethnicities Incidence of flu and allergies among ethnicities Figure 54: Incidence of flu and nasal allergies/hay fever, by race/ethnicity, January-October 2006 Severity of flu and nasal allergies/hay fever among ethnicities Figure 55: Severity of flu and nasal allergies/hay fever, by race/ethnicity, January-October 2006 Preferred formulations of cold, flu, and allergy remedies among ethnicities Figure 56: Preference for 4-6-hour or 12-hour cold, flu, and allergy remedies, by race/ethnicity, January-October 2006 Preferred brands of cold, flu, and allergy remedies among ethnicities Figure 57: Preferred brands of cold, flu, and allergy remedies, by race/ethnicity, January-October 2006 Frequency of usage of cold, flu, and allergy remedies among ethnicities Figure 58: Frequency of usage of cold, flu, and allergy remedies, by race/ethnicity, January-October 2006 OTC vs. Rx cold, flu, and allergy remedies preferences among ethnicities Figure 59: Preference for OTC vs. Rx cold, flu, and allergy remedies, by race/ethnicity, January-October 2006 Ailments ethnicities treat with cold, flu, and allergy remedies Figure 60: Ailments treated with cold, flu, and allergy remedies, by race/ethnicity, January-October 2006 Attitudes towards cold, flu, and allergy remedies among ethnicities Figure 61: Attitudes towards cold, flu, and allergy remedies, by race/ethnicity, August 2007 Side effects from cold, flu, allergy remedies experienced among ethnicities Figure 62: cold, flu, and allergy remedy side effects experienced in the past 12 months, by race/ethnicity, August 2007 Future and Forecast Future trends OTC switch of Zyrtec promises market boost FDA advisory panel advises against children’s cough and cold remedies; manufacturers pull infants’ remedies Market forecast Cold, flu, and allergy remedies Figure 63: Forecast of total U.S. retail sales of cold, flu, and allergy remedies, at current and constant prices, 2007-12 Cold, flu, and allergy remedy tablets Figure 64: Forecast of U.S. FDM sales of cold, flu, and allergy remedy tablets, at current and constant prices, 2007-12 Cold, flu, and allergy remedy liquids Figure 65: Forecast of U.S. FDM sales of cold, flu, and allergy remedy liquids, at current and constant prices, 2007-12 Cold, flu, and allergy remedy nasal products Figure 66: Forecast of U.S. FDM sales of cold, flu, and allergy remedy nasal products, at current and constant prices, 2007-12 Forecast factors Appendix: Trade Associations

Companies Mentioned

- Schering-Plough - Pfizer, Inc. - Proctor & Gamble - McNeil - Adams Respiratory Therapeutics - Wyeth Labs, Inc. - Novartis - Zyrtec