The expected FDA approval later this year of low-dose Xenical (orlistat) as an over-the-counter medication could be good news for consumers struggling to keep their New Year's resolutions to lose weight, according to an international pharmaceutical research firm.

Two FDA advisory committees voted on Jan. 23rd to recommend that low-dose Xenical, be switched from prescription to over-the-counter status. If the FDA accepts this recommendation, the OTC version of the drug will be marketed by GlaxoSmithKline under the brand name alli (pronounced Al-EYE).

"Having an FDA-approved drug available as a weight-loss aid without a prescription would be a significant development for overweight consumers, and for the pharmaceutical industry," says Laura Mahecha, industry manager for the healthcare practice of Kline & Company's research division.

"The anti-obesity therapeutic class has suffered since the banning of ephedra from weight-loss supplements and the withdrawal of Fen-Phen, but the need for an effective product is maybe greater than ever," she added.

Kline's report says there is strong likelihood of switch approval for Xenical, approved by the U.S. as a prescription drug in 1999, particularly since the drug is currently available without a prescription in Australia and New Zealand, thus establishing the precedent for safe use as an OTC medication.

Xenical is not currently covered by most insurance plans, so its success as a prescription drug has been limited. U.S. sales, according to Mahecha, have been declining the past few years, and were estimated at $118 million in 2004

A new prescription anti-obesity drug, Acomplia (rimonabant), is expected to be approved for use soon, the Kline researchers said, adding that Acomplia is touted as being superior to both Xenical and Abbott Laboratories' Meridia -- the only two prescription weight-loss drugs currently approved for long-term use.

The convergence of these factors could translate into large OTC market potential for alli -- perhaps even larger than the sales it generated as a prescription drug, Kline said.

Strong initial sales are expected at launch, the researchers said, but given the unpleasant side effects that alli can cause and the relatively slow weight loss it offers, usage may drop off. The product is also expected to be priced at a premium -- from $60 to $90 per month -- so this will likely deter some patients from making initial or repeat purchases.

GlaxoSmithKline has said it intends to market the OTC drug not as a stand-alone product but as part of an overall weight-loss program offering consumers assistance in modifying behavior, diet, and lifestyle.

"For the first time, U.S. consumers will have a legitimate OTC weight-loss drug to use in their ongoing quest to lose weight," said Susan Babinsky, senior vice president and head of Kline's healthcare consulting practice. "If GlaxoSmithKline is effective in encouraging consumers to embrace the total weight-loss program, then they really have the opportunity to succeed. But this will take more than the traditional approach to consumer education, and we'll have to see how GlaxoSmithKline goes about this."