Pepcidac Case Study

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.

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.

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 growth in the category.

Competition: Given the market share and potential, as expected competition from the other prescription drug and the OTC companies are tough. Over the 97% of total antacid users and 91% frequent users are satisfied with the current product. Tums (19%), Pepto-Bismol (13%) and Maadox (23%) have significant presence in the antacid market. The Tagamet has well established confidence among users. The price of Tagamet could be priced lower than the Pepcid AC’s due to additional licensing fee.

On the other hand, Tagamet has more adverse effect and the medicine needs to be taken 4 times a day compared with less side effects and dose convenience. None of the competitor’s product prevents the heartburn.

Competitors Reaction: The major competitors are going to delve on their established credentials, may come up with similar product for prevention and lower dose.

Pepcid AC Strength: The once a day tablet has lasting action for 8h.This product has less adverse effect compared to Tagamet. Another attractive benefit is prevention of heartburn which no other product provides. The product will capture other products market

Pepcid AC Weakness: The efficacy of lower dose is yet to be proven. Based on study