Acid controller battle begins round three

Drug Store News,  Feb 12, 1996  

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If pay-per-view television covered the OTC business, April 22 would be sold out for all 24 hours. That's the date Zantac 75 from Warner Wellcome Consumer Healthcare is slated to make its nonprescription debut in the United States. Expectations are high among chain drug OTC buyers that the combination of Zantac's prescription heritage, high name recognition, safety profile and reputation among health professionals will make it a huge success. Chain drug buyers agree: Zantac 75 is expected to become the leading acid-controller and the best-selling product in the entire OTC department.

On second thought . . .

In fact, those familiar with marketing plans for Zantac 75 said Warner Wellcome was compelled to rethink the brand's launch date after discussing sales projections with the trade. First-year manufacturer sales of between $200 million and $300 million are projected for Zantac 75, according to a source familiar with the brand.

"I told them I would sell in a month what they were thinking I would sell in a year," said a major chain OTC merchandising executive who was glad to see the date pushed back. "When all is said and done, Zantac 75 is going to dominate the business."

A divisional merchandise manager at another large chain also has high expectations: Zantac 75 is going to be the single biggest OTC product," he said.

Those type of responses from the trade and the volume of orders being placed apparently compelled Warner Wellcome to rethink its original launch date of February 27. By delaying the launch nearly seven weeks retailers expect that Warner Wellcome will be able to avoid potential product shortages that might arise from what the company has promised to be the largest marketing campaign in the company's history. Company officials previously announced Zantac 75 would be available during first quarter 1996 although a specific launch date was never publicly announced. Citing competitive reasons, company officials declined comment on the April 22 launch date.

Reasons for optimism

Regardless of when the product launches, optimism among chain drug buyers about Zantac 75's prospects are grounded in some hard facts. There were close to million prescriptions written for Zantac (ranitidine) during 1995, according to data from IMS America. In contrast, the combined total of prescriptions for Tagamet (cimetidine), Pepcid (famotidine) and Axid (nizatidine) was about 26 million.

"As the world's most-prescribed medicine of its kind for the last five years, Zantac 75 will enter the consumer marketplace from an enviable position of leadership," said Robert Casale, vice president of gastrointestinal marketing for Warner Wellcome. The fact that Zantac 75 enters the U.S. market after Pepcid AC and Tagamet HB doesn't concern Casale, who looks to the brand's experience in the United Kingdom. Facing circumstances similar to those in the U.S., it entered the U.K. market after Pepcid AC and Tagamet 100. Zantac 75 took five months to become the category leader in the U.K., with-a 56 percent market share, according to Casale.

Success overseas

"We fully expect to repeat the prescription success of Zantac and the U.K. OTC success of Zantac 75 in the U.S. OTC marketplace," Casale said.

The Zantac 75 launch will set off another round of frenzied promotional activity, which one buyer referred to as "more fun and games." Extensive couponing and rebating supported the June 1995 launch of Pepcid AC and the August launch of Tagamet HB as those brands sought to build early market share. Nielsen sales data in drug, food and mass through Jan. 6 indicate that sales of Pepcid AC were $125.4 million compared to Tagamet HB with sales of $67 million. Mylanta, with sales of $130 million, leads the category in sales.

Chain drug buyers agree that the extensive promotional activity has made it difficult to t(;il who will be the category's eventual winners and losers. For the time being, a "let-the-dust-settle" attitude is the approach being taken to manage the category, according to buyers.

"It's been hard to tell what is going on, and it is going to get even cloudier with the launch of Zantac 75," commented a buyer at a larger chain.

In fact, several buyers said they don't plan to review the category until later in 1996 after Whitehall Robins has launched its Rx-to-OTC switch H2 blocker Axid (nizatidine). Of the four H2 products, Axid was the last to enter the prescription market. There were about six million Axid prescriptions written during 1995, making it the smallest of the H2s. The Food and Drug Administration has given Whitehall Robins an approvable letter, but at press time the company was awaiting final marketing clearance.

Prevention only

When Axid does arrive, it will be indicated only for the prevention of heartburn. Conversely, Zantac 75 is indicated for treatment of heartburn. Pepcid AC is indicated for both prevention and treatment of heartburn. Tagamet HB initially had only the treatment indication but subsequently received Food and Drug Administration clearance also to make prevention claims.