Late entrant over‐the‐counter and Rx market entry strategies

Abstract

PurposeThis paper aims to explore market dynamics and strategic issues that contribute to a late entrant's success in achieving market leadership in the prescription (Rx) and over‐the‐counter (OTC) markets. In the Rx market, consumers must receive physicians' approval before purchasing the product. In the OTC market, consumers make the final drug choice.Design/methodology/approachData on sales (both Rx and OTC) and direct‐to‐consumer advertising expenditures for nine gastrointestinal drug products were obtained covering a 17‐year period. Ordinary least squares regression was employed.FindingsThe findings show that late‐market entrants, despite existing challenges, can become market leaders. This applies to both the Rx and OTC markets, via varying mechanisms.Originality/valueThis study is unique in demonstrating the differential mechanism in achieving market success for late entrants in the Rx and OTC markets.