Pepsid AC

Positioning Strategy for Pepsid AC

Pepsid AC is an effective histamine H-2 receptor blocker manufactured by a Johnson and Johnson-Merck Pharmaceuticals joint venture company (JJM). As of 1994, its sales comprised a 13% share of the $B3.3 prescription peptic ulcer-heartburn market, with annual Pepsid AC revenues of $M387. The market leader is Zantac (Glaxo) with a 59% market share. The imminent loss of patent protections for these drugs (and the initial avoidance of OTC Zantac by Glaxo) has provided opportunities for the repositioning of Pepsid AC in the low-dosage generic OTC marketplace in an attempt to improve significantly its overall penetration, and also to compete directly in the $M750 antacid market. A target revenue objective of $75M per annum has been established by JJM.
The recent FDA set back to the SmithKline Beecham application for a symptom-control application for OTC Tagamet (because of specific drug interactions), when this application had been the...