MBA 560 – Marketing Principles
Pepcid AC Racing to the OTC Market
The managers at Johnson & Johnson/Merck Consumer Pharmaceuticals Co. (JJM) have two options regarding their newest over-the-counter (OTC) drug Pepcid AC. The first option would be to pursue both claims of treatment and prevention, which would help differentiate their drug from other competitors OTC drugs that are also pending FDA approval. The first option could require up to 9 months of additional studies and investments to provide further evidence to the advisory committee and FDA. Conversely, they could choose the second option, to bypass the recommendations of the advisory committee and take their case directly to the FDA with the goal of being the first to enter the market. If they choose the second option, they would also need to decide whether to request approval for both claims or just the treatment claim. Option two is the best course of action based on the evidence and data presented in the case. They should only seek approval of the treatment claim and work to get the required additional evidence for the prevention claim approval in the near future to differentiate as more drugs enter the OTC market. All marketing claims regarding “the uses, benefit, or efficacy of any drug” (King, et al. 2003) require approval by the FDA. JJM progress toward approval for Pepcid AC as an OTC heartburn remedy was stalled in late July of 1994. The advisory committees requested additional evidence to support JJM’s claims that Pepcid AC prevented and/or provided relief from heartburn. JJM’s largest competition for first-to-market was SmithKline Beecham’s drug Tagamet, which had also been stalled by the advisory committee for the FDA. At one time JJM had conceded the first-to-market slot SmithKline Beecham due to the recent decisions of the advisory board they had an opportunity to be first-to-market. This is the optimal time for JJM to enter the highly competitive...
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