Published 03 Nov 2017
Pharmaceutical companies dream of runaway success: drugs that immediately create sales of more than $1 billion. But developing and marketing such particular drugs has become so costly that only the largest pharmaceutical companies can afford to do so. Now that U.S. Food and Drug Administration has approved over-the-counter sales of the allergy drug Zyrtec, according to the McNeil Consumer Healthcare, which sells nonprescription Zyrtec. Zyrtec is the brand name of cetirizine and approved to ease allergy-related sneezing, watery eyes, and runny nose, as well as itching due to irritation. Zyrtec’s most common side effects include tiredness, drowsiness, and dry mouth.
According to Hitti (2007) the FDA’s approval of nonprescription Zyrtec follows the FDA’s approval of over-the-counter sales of Zyrtec-D in Nov. 9. However, Zyrtec-D will be kept behind pharmacy counters because it contains the nasal decongestant pseudoephedrine, sales of which are restricted by the Combat Methamphetamine Act. Nonprescription Zyrtec will be available in 5 milligram and 10 milligram tablets, 5-milligram and 10 milligram chewable tablets, and as syrup.
But the question is how these over-the-counter sales of Zyrtec will affect the developing and marketing such drugs. Midsize pharmaceutical companies do have a shot at developing themselves. A clutch of promising technologies would make it rewarding for them to develop and market drugs that challenge the less common diseases big pharmaceutical companies tend to overlook. At the same time, it will become easier and more profitable for midsize companies to in-license drugs developed by other companies for small-scale markets and to out-license possible blockbusters to big pharmaceutical companies, which can market them more effectively.
Furthermore, midsize pharmaceutical companies that happened to increase possible runaway success have found it more profitable to out-license them to big pharmaceutical companies than to market them alone. For example, Zyrtec, an allergy drug from UCB (Union Chimique Belge) Pharma, had 2006 sales of about $1.5 billion and it continues to be the most-prescribed antihistamine agent in the U.S. in a challenging market.
Zyrtec, the nation’s most-prescribed allergy drug, goes on sale over the counter, but don’t expect that to indicate immediate savings at the cash register. The move is eventually going to drive down the price of Zyrtec for consumers, predominantly once generic competitors hit the shelves. But for now patients who have been getting Zyrtec for small co-payments will find themselves paying more. Some of the competitors of Zyrtec are Allegra and Claritin. Kassirer and Reisman (2001) explained that for years these drugs have been available over the counter in several countries, including Canada, at a much lower cost than in the United States. They perform as well as the previous medicines, are in any case as safe, and as one advertisement pushes have very similar side effects as sugar pills: in general, an outstanding profile for drugs that treat and cure a nonfatal condition that is mostly seasonal but still yields substantial misery.
According to Meadows (2002) if the drugs enter the over the counter market, their cost is expected to drop significantly. In addition, patients who have insurance coverage may end up paying more for the drugs without a prescription; but co-payments are frequently high and extensive drug coverage is unusual. Even though physicians may be bypassed if prescriptions aren’t required, very similar is true when people self-medicate with the older antihistamines. And the issue that the drugs will be misused and abused and will lead to poor outcomes appears weak, given that very few such problems have emerged in this country with the older antihistamines or in other countries with the newer drugs.
However, competition still remains as threat for many pharmaceutical companies. One important reason of bothering competitor is to gain more access to the customers with high standard quality of products (i.e. drugs). Developments in technology change is another threat which in this market within the business ability to adapt. Competitor analysis is an important part of the business strategic planning process. Some businesses think it is best to get on with their own plans and ignore the competition. Others become obsessed with tracking the actions of competitors, often using underhand and illegal methods, securing data to describe competitors. But, some are happy simply to track the competition, copying their moves and reacting to the changes in a legal way, which means that businesses must know how the business influences customers so that the company can develop its own services and satisfy the customers. In other words, competition is defined by customers those who provide similar benefits and values.
However, whatever the approaches used in analyzing competitors are taking advantage of the benefits of the advanced information and communication technologies proves to be a critical success factor for many pharmaceutical companies. Information technology, particularly the Internet, has significantly affected the way people live. It has tremendously changed the way people exchange information and participates in business transactions in electronic commerce, allowing business models whose definition and scope are unattainable in traditional markets. The development of the Internet market has been influenced by the advancement in technologies, the corporate world’s change in perception, and the ever-changing lifestyles of the people.
The Internet reaches 426 million consumers worldwide (Pastore, 2001). North America accounts for the 43% of all Internet users, Followed by Western Europe (25%) and Asia (21%). This encouraging figure has resulted to the rapid increase in the number of firms that have integrated e-commerce philosophies on their systems. The United Nations Conference on Trade and Development (UNCTAD) sees that the Internet will continue to power world growth (Kundu and Singh, 2002). In fact, global e-commerce market was expected to jump from $286 billion in 2000 to $3.2 trillion in 2004 (eMarketer, 2001).
- EMarketer. (2001). The eGlobal report. January. Accessed 15 February 2008. Available at http://www.emarketer.com .
- Hitti, M. (2007). FDA OKs Over-the-Counter Zyrtec: Allergy Drug Zyrtec May Be Sold Without a Prescription. Available at WebMD Medical News.
- Kassirer, J.P. and Reisman, R.E. (2001). A Prescription for Industry Control. The American Prospect (12)14. The American Prospect, Inc.
- Kundu, S. and Singh, N. (2002). Explaining the Growth of E-Commerce Corporations (ECCs): An Extension and Application of the Eclectic Paradigm. Journal of International Business Studies, 33(4), 679.
- Meadows, M. (2002). Itching for Some Allergy Relief?. FDA Consumer (36)3. U.S. Government Printing Office.
- Pastore, M. (2001). The World’s Online Populations. Accessed 15, February 2008. Available at http://cyberatlas.internet.com/big_picture/geographicks/article/o,1323,5911_151151,00.html .