Pepcid Ac Case Study
Problem Statement: JJM wants to market Pepcid AC reduced dosage of prescription drug as Over the Counter (OTC) medicine. Based on its efficacy to prevent and treat the heartburn, an application to market was rejected by the advisory committee of FDA. The JJM management has to present an alternate strategy to prove Pepcid AC efficacy as an OTC drug. The objective was to enter the market before Smithkline Beecham’s Tagamet and other competitor’s product enter the market. It is important for Pepcid AC to enter before others to reap the fist mover advantages. They get to set the initial price and capture the market share. Since Tagamet and Zantac have established credibility and market share in the prescription drug domain allowing their products would adversely impact Pepcid AC’s sales and profits. Based on the provided information I provided possible strategies to move forward toward launching the product in the market. Strategic Situation Facing Management: The switching of prescription drug to the OTC offers huge opportunity for pharmaceutical companies. Especially, when the patent protection is nearing the expiration, big pharma companies have plans to extent the patent life or switch to OTC if possible to ensure continued sales and profits. There are many examples cited in the case study for the above. In the current case, the total sales for H2 receptors is around 2.9bn (1993) and for the OTC antacid market was 745m (1994). A total of 525m prescription was issued for 72m patients over the past 18 years. The market size and potential is too big to ignore. The market research conducted by BASES, shows that the sizable number of prescription users and dual users are willing switch to OTC Pepcid AC. The users prefer prevention to treatment or both. BASES data showed that the patients prefer treatment. However, other focus group study showed that prevention selling point could provide better positioning in the market and set stage for better...
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