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Pepcid AC: OTC Launch Strategy Analysis

JJM wants to introduce the heartburn drug Pepcid AC as an over-the-counter drug after its patent expires on the prescription version. Studies show the OTC market has more long-term growth potential. Research also found positioning Pepcid AC for prevention of heartburn had higher consumer interest than treatment. Managers must choose between three options for FDA approval: conducting more prevention studies and launching later, bypassing committees for a treatment-only claim, or bypassing for both prevention and treatment claims.

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Rini Rafi
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436 views2 pages

Pepcid AC: OTC Launch Strategy Analysis

JJM wants to introduce the heartburn drug Pepcid AC as an over-the-counter drug after its patent expires on the prescription version. Studies show the OTC market has more long-term growth potential. Research also found positioning Pepcid AC for prevention of heartburn had higher consumer interest than treatment. Managers must choose between three options for FDA approval: conducting more prevention studies and launching later, bypassing committees for a treatment-only claim, or bypassing for both prevention and treatment claims.

Uploaded by

Rini Rafi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Pepcid AC: Racing to the OTC Market Group-1

Case Analysis

Introduction:

JJM wants to introduce Pepcid AC as new over the counter drug (OTC). It has 387 Million $ in
prescription sales from Pepcid and ranked 16 among all drugs.

Case Facts:

 OTC market is attractive for its long durability and growth opportunities when compared
to Prescription drugs with strong generic competition after patents run out.
 BASES-I: Positioning strategies – (i) prevention (ii) treatment with Prevention scoring
higher on purchase intention for prescription users (64% versus 49%). Competitive retail
Pricing of 2.95
 BASES-II: Approximated two-thirds of Pepcid AC’s first year sales would come at the
expense of existing antacids and one-third from Prescription drugs.

Dilemma:

Managers of JJM are contemplating on the below 3 options available

1. JJM to conduct more studies for the advisory committee and position for both
prevention and treatment claims for FDA approval. Launch the product as second in the
market after 6-9 months
2. By pass advisory committee recommendation and take the case to FDA for approval
with Treatment only claim
3. By pass advisory committee recommendation and take the case to FDA for approval
with prevention and Treatment claim

OTC Market of Interest:

 Patent protection of a drug is for a limited period and once the patent protection is lost,
strong generic competition arises.
 Over the counter business run for a long time due to its convenience, easy accessibility
and affordability.

Aggressive in the approach?

Plan and execution Approaches for implementation:

 Focus on the Marketing Mix:

o Price: As suggested by the BASES-I a retail price of 2.95$ retail price to be


competitive with current market antacids
o Product: focused on the R&D and clinical trial data for prevention
o Place: Distribution network on all retail stores for convenient access of Pepcid AC
o Promotion: High Spending on advertisement on the first year for branch
awareness.
Pepcid AC: Racing to the OTC Market Group-1
Case Analysis

 Brand Recognition: Use the potential first mover time to cultivate and satisfy the customer
segment to create brand recognition and recall.

First Mover Advantage:

 The product technology evolution and the product expansion in the US pharma industry is
slow and hence the combined effect of market and technological is calm water.
 First mover advantage gives us the long-term advantage for JJM in launching Pepcid AC as
the first mover.

[ CITATION Fer \l 16393 ]

Final Words:

 Even though JJM gets a blue ocean opportunity, competition is never irrelevant and the
product need to be evolving to have a long-term success.

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