Should GSK prioritize expanding its over-the-counter product line or focus resources on developing new prescription medications?

Introduction

The trade-off between expanding GSK's over-the-counter (OTC) product line and focusing resources on developing new prescription medications is a critical strategic decision. This scenario involves balancing immediate market opportunities with long-term innovation potential. I'll analyze this trade-off by examining market dynamics, resource allocation, and potential impacts on GSK's business model and stakeholders.

Step 1

Clarifying Questions (3 minutes)

• Based on recent market trends, I'm thinking OTC products might be showing stronger growth. Could you share any data on the relative market sizes and growth rates for OTC vs. prescription medications in GSK's key markets?

Why it matters: Helps prioritize resources based on market potential Expected answer: OTC market growing faster but smaller overall Impact on approach: Would influence balance of short-term vs. long-term focus

• Considering GSK's current product portfolio, I'm curious about the revenue split. What percentage of GSK's revenue currently comes from OTC products versus prescription medications?

Why it matters: Understand current business model and potential for disruption Expected answer: Majority from prescription, but OTC growing Impact on approach: Would affect risk tolerance for shifting focus

• Looking at our R&D pipeline, I'm wondering about our current innovation capacity. How many potential blockbuster drugs do we have in late-stage clinical trials for prescription medications?

Why it matters: Assesses potential for future growth in prescription segment Expected answer: 2-3 promising candidates in Phase III trials Impact on approach: Would influence resource allocation to maintain pipeline

• Thinking about our manufacturing and distribution capabilities, how easily could we scale up OTC production without significant additional investment?

Why it matters: Determines feasibility of rapid OTC expansion Expected answer: Moderate capacity available, some investment needed Impact on approach: Would affect timeline and budget for OTC expansion

• Considering regulatory landscapes, are there any upcoming policy changes that could significantly impact either OTC or prescription drug markets in our key regions?

Why it matters: Anticipates external factors that could influence strategy Expected answer: Potential for easier OTC approvals in some markets Impact on approach: Might favor OTC expansion in certain regions