Schering Plough: Replacing Claritin

Schering Plough is a large pharmaceutical company with over 22,000 employees worldwide, and over $6.8 billion in sales worldwide. The company is considering two options to replace its flagship drug, Claritin (an antihistamine), as Claritin's patent is soon to expire. One drug is targeted toward nasal congestion, the other towards asthma; however, each drug is at a different stage in the development process, one has greater market potential but was still in its early development stage, the other drug could be launched within the year but would appeal to a much smaller market. The company must decide which drug to pursue or whether to focus on both drugs or neither. The case allows students to do a traditional NPV analysis and decision analysis and the use of simulation.