GlaxoSmithKline ($GSK) and Johnson & Johnson ($JNJ) have settled a short-lived legal spat over GSK's allergy drug marketing claims--meaning that now, the only battle left will be the one for market share.
After claiming in a TV spot that its Flonase outperformed the No. 1 allergy pill--and controls 6 symptoms to its rival's one--Glaxo has reached a "mutually acceptable and amicable" agreement with competitor J&J, the terms of which are confidential, Reuters reports.
J&J, the maker of allergy hotshots Benadryl and Zyrtec, brought the suit earlier this month, claiming Glaxo made unsupported claims that would hurt those high-performing brands--even though they weren't named specifically. J&J argued that Zyrtec was the No. 1 allergy pill by sales, meaning consumers who saw GSK's spot would conclude it was inferior to Flonase.
GSK responded, bringing in Dr. Ran Kivetz, a marketing professor at Columbia University Business School to challenge those assertions.
"Different consumers are likely to rely on different constructs or beliefs when forming an inference (if any) regarding the identity," of the No. 1 leading allergy pill, he said in a court document. Consumers may identify the leader as "that brand or pill for which they have the highest brand awareness"--and arguably, that's Bayer's Claritin, he pointed out.
But the court fight is all over now, meaning it's time for both pharma giants to turn their attention back to OTC sales--likely top of mind for both drugmakers. Glaxo, which recently teamed up with Novartis ($NVS) to form an industry-leading consumer health joint venture, is gunning for a hefty share of the allergy pie after nabbing FDA approval for OTC Flonase last year.
And J&J, for its part, is gunning for a rebound at its McNeil consumer unit. Over the past few years, in the wake of major recalls, McNeil hasn't managed to get retailers fully stocked with its top consumer brands. Quality problems at a key plant forced McNeil to pull millions of packages of Motrin, Tylenol and Benadryl products, among others.
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