Rx-to-OTC Switch Data

Rx-to-OTC Switch Management Issues

Rx-to-OTC Switch Trends

Where to find more information on Rx-to-OTC Switches

ENEMY #1: Time
(Or Short Term Management Thinking)

Does your management have the long term vision and commitment for switch success? Meaningful competitive advantages can be achieved if proactive planning and development are pursued early enough.

For example, SWITCH estimates that the switch of a lower dosage product to create dual Rx/OTC status could require 43-82 months from the time Management decides to pursue a switch until the product with approved labeling can be shipped into the market. Importantly, if a switch with a year or two of remaining patent protection is desired, then this amount of time needs to be added to the total lead time.

Lots of Opportunity to Differentiate
While the fundamental pharmacology of a molecule cannot be changed easily, there are a number of variables that can be added or modified to create meaningful competitive advantages to consumers in an OTC product.

Question: When Should Switch Effort Start?
Answer: Yesterday!
The lead time is the single greatest barrier to a timely market entry. Proactive planning and development should start immediately after the basic assessment concludes that a drug is switchable. This should clearly also be started with as much lead time as possible before R&D develops the switch submission for regulatory agency review. Product development, packaging, clinicals, submissions and regulatory reviews require an incredible amount of time, not to mention resources and expense.

ENEMY # 2: A Shortage of Resources
You'll need to fight for resources just to get them and the constant competition for resources can further consume development time. While switch development is typically very focused and inexpensive compared to Rx development, your switch effort will be competing for resources that could be applied to the next blockbuster Rx drug.

To win resources, the switch must have a clear development plan and sound marketing and technical rationale behind it. Even after resources have been budgeted, your switch can experience delays due to project priorities in R&D rescheduling.

Accordingly, it is critical to put together a comprehensive switch team with key members from: Rx Marketing, Product Development, Medical, Clinical, Legal and Regulatory as well as from OTC Marketing, a consumer advertising agency and Marketing Research.

The consumer marketing and advertising members will drive the process to develop product advantages for the OTC market. But more importantly, the other team members will ground the product ideas in reality from technical, legal and regulatory points of view. Quite significantly, they also will become key champions for your project in their respective areas of the organization.

Key Points in the Pursuit of Product Differentiation
1. Engineering Product Advantages
The team should first identify and assess who will be the OTC competition, both in terms of existing OTC products and of other Rx products that are likely to switch. For example, in the H2 antagonist switch the competitive set should have included OTC antacids, Rx H2 antagonists and Rx Carafate (sucralfate).

Second, an analysis of the current differences in competitive products should be developed. For a switch to be successful, it must meet current category requirements. Examples in the H2 antagonist case are indicated below. The current category requirement before H2 antagonists switched was on the all important efficacy dimension - the product needed to be as fast acting as antacids. Ideally, a switch should be better than the current OTC product advantages with none of their disadvantages. Success can even be derived just by overcoming a current product disadvantage, as was the case of acetaminophen analgesics that had no aspirin side effects.

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Consumer marketing and advertising members will drive the process to develop product advantages for the OTC market. More importantly, the other team members will ground the product ideas in reality from technical, legal and regulatory points of view.

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Key Points in the Pursuit of Product Differentiation
2. The Basic Essence of OTC Drugs
Most important, the team needs to identify an array of potentially new product benefits and features for your switch which are different from competition and meaningful to consumers.

It is important to distinguish advantages that are product benefits from those that are product features. Both can be desirable, but benefits are more important than features.

With medications, there are basically three types of product benefits: efficacy, safety and ease of use. Generally, in terms of their order of consumer benefit importance, efficacy is by far the most important. If the drug does not work, then its safety or ease will not save it.

If there is no category differentiation on the efficacy dimension, then safety or ease of use can become a major point of distinction. The specific nature of the safety or ease of use benefit and its consumer perceived value would determine how meaningful they are. Each of these benefit types can be dimensionalized more specifically:



In contrast, product features are not benefits themselves but actually are or are perceived to be contributors to the delivery of product benefits or support the credibility of the claim of the benefit. Examples of desirable product features might be, as shown below:



Again examining the H2 switches, OTC Pepcid addressed both the current category requirement of being fast acting and its own disadvantage of being slow acting with a prophylactic claim. One doesn't have to wait at all for relief if the problem is prevented from ever happening.

Indeed, the prophylactic claim put Pepcid on par with fast acting antacids on the critical criteria of the speed of relief benefit. Once competitive on this key consumer benefit, Pepcid's other advantages of being perceived as a more efficacious prescription-based medication and being a pleasant to take swallowable tablet medication could be elevated into consideration for further competitive advantage.

Key Points in the Pursuit of Product Differentiation
3. Deciding Which Product Benefits and Features to Develop
Often, a large number of alternatives can be screened judgmentally and reduced down to a manageable number. Here we might use criteria such as appropriateness for the OTC therapy area as well as commercial feasibility. Key new benefit advantages (or disadvantages to be overcome) should follow the ranking of consumer benefit importance, starting with product efficacy. Faster acting is more appropriate for acute conditions like headache, while longer lasting relief is more appropriate for protracted or chronic conditions like muscular pain.

Market research will be needed, however, to assess the less obvious features to determine whether consumers perceive them to be competitively unique and meaningful advantages. This often happens in the areas of product safety and ease of use.

To conduct this research, product concepts need to be developed that represent:

• The benefits and features of the major existing OTC brands,
• The expected benefits and features of competitive switch brands and
• The planned new benefits and features of your switch.

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Alternative product concepts for your switch with different planned benefits and features can be developed and consumer tested to learn the relative value of different new benefits and features.

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Key Points in the Pursuit of Product Differentiation
4) Why Is So Much Lead Time Needed?
The chart below indicates some rough ranges of time needed for various development efforts. In this example, the eventual plan to be executed includes the switch of new dosage form with a reduced dosage strength in new packaging.

An estimated 43-82 months in total development time is estimated. Almost all steps are sequentially performed. However, new packaging tooling development can be performed in addition and in parallel to accelerated stability testing in existing packaging for product needed for the clinical testing.

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An estimated 43-82 months in total development time is needed from conception to reaching the marketplace. Almost all steps are sequentially performed.
The two most important criteria for a switch success are product differentiation and switch timing.

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Conclusion:
The two most important criteria for a switch success are product differentiation and switch timing. We have tried to provide you with a general set of guidelines on product differentiation. We hope it has been useful. However, each switch situation has its own unique characteristics.

In a future issue we will address the issue of timing. For now, let's just say that first is usually better if you are opening up a new indication or have a breakthrough product (such as non-sedating antihistamines). However, that is no guarantee of success. The first H2 to switch in many markets was Tagamet and look where that is today.

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