Pepcid AC Case Study
1- Introduction
Developed and commercialized by Merck, Pepcid is a prescription drug for treatment of heartburn. Different from regular antacids that just neutralize acids in the stomach, Pepcid belongs to a class of drugs known as H2 receptor antagonists, which reduce stomach acid secretion by blocking the histamine H2-receptor on the cells producing gastric acid. Third in the H2’s class to enter the prescription drugs market, Pepcid was never able to reverse course and take market leadership from competing products such as, Zantac from Glaxo and Tagamet from SmithKline.
In recent years, the possibility of developing a lower dosage form of Pepcid for the OTC market became an attractive business proposition. Merck was not alone in this venture, all major competitors in the H2 receptor antagonists market entered in a race to get FDA approval for a lower dosage version of its original prescription drugs, including Glaxo and SimthKline. In order to gain regulatory approval, drug makers must prove safety and efficacy of the medication. Furthermore, the willingness of consumers to comply with directions specified on the product label is also an important consideration. Nine of the top-ten OTC brands introduced since 1975 were formerly prescription only drugs. A famous example of successful prescription to OTC switch was the pain killer Advil.
Not experienced in bringing prescription drugs into the OTC market, Merck joined forces with Johnson & Johnson, which had extensive experience in the consumer products market. The result was the creation of a mutually beneficial alliance known as JJM. Being the first entrant into a new OTC market would present JJM with a unique opportunity to potentially becoming the market leader in the H2 receptor antagonist OTC market.
The challenge for JJM, was obtaining FDA approval for Pepcid AC, the OTC version of Pepcid, ahead of its competitors. Tagamet was running head-to-head with Pepcid, trailed by Axid and Zantac,
Developed and commercialized by Merck, Pepcid is a prescription drug for treatment of heartburn. Different from regular antacids that just neutralize acids in the stomach, Pepcid belongs to a class of drugs known as H2 receptor antagonists, which reduce stomach acid secretion by blocking the histamine H2-receptor on the cells producing gastric acid. Third in the H2’s class to enter the prescription drugs market, Pepcid was never able to reverse course and take market leadership from competing products such as, Zantac from Glaxo and Tagamet from SmithKline.
In recent years, the possibility of developing a lower dosage form of Pepcid for the OTC market became an attractive business proposition. Merck was not alone in this venture, all major competitors in the H2 receptor antagonists market entered in a race to get FDA approval for a lower dosage version of its original prescription drugs, including Glaxo and SimthKline. In order to gain regulatory approval, drug makers must prove safety and efficacy of the medication. Furthermore, the willingness of consumers to comply with directions specified on the product label is also an important consideration. Nine of the top-ten OTC brands introduced since 1975 were formerly prescription only drugs. A famous example of successful prescription to OTC switch was the pain killer Advil.
Not experienced in bringing prescription drugs into the OTC market, Merck joined forces with Johnson & Johnson, which had extensive experience in the consumer products market. The result was the creation of a mutually beneficial alliance known as JJM. Being the first entrant into a new OTC market would present JJM with a unique opportunity to potentially becoming the market leader in the H2 receptor antagonist OTC market.
The challenge for JJM, was obtaining FDA approval for Pepcid AC, the OTC version of Pepcid, ahead of its competitors. Tagamet was running head-to-head with Pepcid, trailed by Axid and Zantac,