Market Barriers to the Development of Pharmacotherapies for the Treatment of Cocaine Abuse and Addiction: Final Report. Case Study 4: Nicorette



Drug Overview

Nicotine polacrilex is a smoking cessation therapy marketed under the trade name Nicorette by SmithKline Beecham in the United States and Pharmacia & Upjohn internationally for the treatment of nicotine addiction. The clinical effects of Nicorette allow the medication to serve as a temporary substitute for nicotine, slowly decreasing the patient's craving for nicotine. In contrast to the Nicoderm CQ transdermal patch, the Nicorette gum delivers a controlled dosage of nicotine to the body through the mucous membrane lining of the mouth (Nicorette 1997). Patients may obtain the medication over-the-counter at pharmacies or from their physicians. Clinical trials suggest that counseling and support received during the initial few weeks of treatment help patients cope with the behavioral aspects of nicotine addiction (Law 1995).

Market Overview

The potential size of the market for treatment of addiction to nicotine is significantly greater than that of other addictive substances such as heroin. According to a 1995 report by Abt Associates, approximately 496,000 people were addicted to opiates. In contrast, according to the Centers for Disease Control and Prevention, approximately forty-eight million Americans were current smokers in 1994. As Figure 32 highlights, the potential market for smoking cessation products has remained between forty-eight and fifty-five million people since 1965.

Figure 32: Total Number of Current Adult Smokers, 1965-1994

Figure 32: Total Number of Current Adult Smokers, 1965-1994

Key Issues from the Case Study

Similar to other pharmacotherapies for substance abuse addiction, government agencies have played an important role in the research and development of the medication. Government agencies financed many studies conducted in the late 1970s and early 1980s that led to FDA approval of Nicorette.

In contrast to most pharmacotherapies for substance abuse addiction, Nicorette is not subject to the different levels of federal, state, and local regulations and restrictions. The pharmaceutical companies involved in marketing Nicorette did not have to direct their time and energies toward rescheduling the medication or overcoming legislative barriers. Like more traditional medications, the medication was quickly introduced into the market after FDA approval.

A key difference between Nicorette and other medications for substance abuse addiction concerns the marketing strategies used by the pharmaceutical companies. SmithKline Beecham and Marion Merrell Dow (former licensee of Nicorette and now Hoechst Marion Roussel) were able to market the medication to the pharmacies and the physicians in the private sector. When Nicorette was approved as an over-the-counter smoking cessation therapy in 1996, the pharmaceutical companies were able to directly market the medication to smokers.

The following discussion provides a more comprehensive and detailed overview of the research, development, and marketing experiences of Nicorette.

Product History and Development Timeline

Figure 33: Timeline for Development, Approval, & Implementation of Nicorette

  Figure 33: Timeline for Development, Approval, & Implementation of Nicorette - 1Figure 33: Timeline for Development, Approval, & Implementation of Nicorette - 2

As the timeline in Figure 33 highlights, the first formal clinical study of nicotine and its withdrawal symptoms was conducted in 1942. However, the first clinical study on nicotine gum was not conducted until 1973 by Ferno et al. Clinical research on Nicorette and nicotine replacement therapy conducted throughout the 1970s and 1980s was financed jointly by the private and public sectors. In the early 1980s, Pharmacia & Upjohn were conducting clinical research that led to the development of nicotine polacrilex (i.e., Nicorette gum). The NDA for the 2 mg strength of Nicorette was submitted in 1983. In 1984, the medication was approved by the FDA as the first smoking cessation treatment therapy. In 1984, Marion Merrell Dow was licensed the rights to market the medication within the U.S. while Pharmacia & Upjohn marketed the medication abroad.

In 1992, the FDA approved the 4 mg strength of the medication and the patent on the compound expired. After obtaining FDA approval for the 4 mg medication, Marion Merrell Dow and SmithKline Beecham joined their "consumer product" lines. Marion Merrell Dow merged with SmithKline Beecham in an effort to halt the diminishing sales generated from Nicorette; the sales for the medications fell 17% between 1991 and 1992 due to the emergence of new nicotine replacement therapies. This merger served as the launching pad for the efforts to switch Nicorette from prescription medication to an over-the-counter (OTC) treatment. In February 1996, the FDA granted SmithKline Beecham the right to distribute the medication over the counter and granted a three-year market exclusivity on the OTC version until February 1999.

Clinical Development and Product Positioning

Clinical Trials, Phases I - III

As highlighted in the previous section, the first clinical trial that identified the withdrawal symptoms generated by the loss of nicotine was conducted in 1942 by Johnston et al. Intensive research on nicotine dependence and nicotine withdrawal symptoms, however, did not occur until the 1970s. During the early 1970s, researchers inferred nicotine dependence from titration studies, studies that confirmed the nicotine seeking behavior, and nicotine withdrawal symptoms (Henningfield 1997). This research, funded in part through grants from NIDA, the National Cancer Institute (NCI), and the National Heart, Lung and Blood Institute (NHLBI), laid the groundwork for researching nicotine substitution therapy and alternative delivery systems for nicotine. The initial nicotine replacement therapy was investigated in the early 1970s by Ferno et al. (Nunn-Thompson 1989). Based upon the hypothesis that nicotine was the agent that caused the smoking dependence, Ferno sought to develop a mechanism for nicotine replacement to help reduce the characteristic craving for cigarettes. In 1973, Ferno et al. developed the chewing gum formulation (nicotine polacrilex) that would give the body reduced amounts of nicotine until the dependence on nicotine was eliminated. Research on this replacement therapy continued throughout the 1970s and received top priority from the FDA.

NDA Applications

In 1981, Pharmacia & Upjohn submitted the NDA for nicotine polacrilex; the NDA for the 2 mg strength gum was subsequently approved in 1983 (Nunn-Thompson 1989). After obtaining FDA approval, Pharmacia & Upjohn licensed the rights of Nicorette to Marion Merrell Dow to market the medication in the United States. Research on nicotine replacement systems continued by NIDA supported researchers including Jarvick, Hughes, Griffiths, and Henningfield (Henningfield 1997). Throughout the 1980s, research on Nicorette gum continued. Clinical trials were conducted throughout the 1980s that determined that nicotine replacement therapy was more effective when accompanied by behavioral adjuncts including counseling, nicotine weaning, and relapse prevention. According to clinical trials conducted through 1985, patients that received nicotine polacrilex gum had 27% abstinence rates with intensive specialized support, 21% with minimal support, and 10% when the medication was taken at the advice of a physician.

Concurrent to the research on the efficacy of nicotine gum in clinical settings, Marion Merrell Dow and Pharmacia & Upjohn were conducting research on the efficacy of 4 mg doses versus 2 mg doses of Nicorette. In 1992, the FDA approved the 4 mg dose of Nicorette gum in conjunction with the approval of four other nicotine replacement therapies including Nicoderm CQ and Nicotrol nicotine transdermal patches.

SmithKline Beecham Merger and the OTC Research

The merger between SmithKline Beecham and Marion Merrell Dow consumer lines in 1992 initiated the clinical research for the potential switch of Nicorette from prescription medication to an OTC remedy (The Tan Sheet 1993). Clinical trials on the efficacy and safety of the OTC product were conducted throughout the spring of 1993 and were completed in August 1993. Research continued in 1994 when SmithKline Beecham (which had obtained marketing rights to Nicorette as of January 1, 1994) submitted the SNDA. In the SNDA, SmithKline included a non-clinical study on the comprehensiveness of the labeling to consumers, two clinical studies that examined physician's prescription rate of the medication and the patients' subsequent quit rates, and two OTC use trials. FDA determined that these clinical trials demonstrated the safety and efficacy of the OTC product and FDA approved the Rx-to-OTC switch in February 1996. In October 1996, the FDA granted the product 3 years of market exclusivity under the Waxman-Hatch regulations retroactive to the OTC approval date (The Tan Sheet 1996). The Waxman-Hatch regulations were established under the Drug Price Competition and Patent Restoration Act of 1984 and these regulations set the criteria for drugs (prescription and OTC) seeking market exclusivity. To obtain market exclusivity, the following criteria must be met:

  1. The FDA must not have approved an identical drug product with the same conditions of use prior to this request.
  2. The NDA or SNDA must contain reports of new clinical investigations, not studies relied on for the approval of another drug product or a previous NDA.
  3. NDAs must be supported by clinical studies other than bioavailability studies.
  4. The clinical studies in the NDA must be conducted or sponsored by the person submitting the application and the studies must be essential to the approval of the NDA.

Product Marketing Strategy and Sales

In contrast to other pharmacotherapies to substance abuse addiction, the manufacturers of Nicorette did not have additional significant market barriers after FDA approval. After the approval of the prescription strength form of Nicorette, Marion Merrell Dow focused its energies on the physicians and the pharmacies. The company educated physicians and pharmacists concerning the efficacy of the medication when taken in conjunction with physician support and behavioral counseling.

Marketing Strategy

Following the OTC approval of Nicorette gum, SmithKline launched a new marketing strategy directed at consumers. SmithKline utilized numerous different approaches to educate the public about the new medication, including the following:

  • Commercial advertisements in the media. In April 1996, SmithKline Beecham launched television advertisements that featured portraits of quitters that had relied upon Nicorette to stop smoking. The advertisements were 30-second spots that aired during prime-time programming.
  • Nicorette Webpage. SmithKline Beecham created a webpage about its medication for smokers that surfed the web. The webpage educated potential consumers about the medication, provided "helpful hints" for smokers, and had a dependency quiz that potential consumers should take prior to purchasing Nicorette. In addition, the webpage linked to the company's Committed Quitters Program, "a personalized 12-week smoking cessation program that will . . .keep you on the road to quitting."
  • Creation of a partnership with the American Lung Association. SmithKline gave the American Lung Association a grant to establish a hotline entitled "Counselors on Call." This hotline operated from April 17 - 26, 1996, to coincide with the launch of the OTC version of Nicorette. Smokers that contacted the hotline received counseling from ALA officials who provided information on smoking cessation including the use of Nicorette (The Tan Sheet 1996).

Marketing Sales

As highlighted by the table below, the sales of Nicorette increased dramatically after the FDA approval of the OTC version of the medication. Sales in the second quarter of 1996 increased over 100% from the sales in the first quarter, rising from $37 million to $78 million. During 1996 alone, the sales from Nicorette surpassed $225 million dollars. This figure is comparable to target peak annual revenues for new drugs of major pharmaceutical companies. Nicorette is sold at an average wholesale price of $3.77 per day (2 mg strength) and $6.59 per day (4 mg strength), and retails in pharmacies in the range of $45 to $55 for a 108-count package of Nicorette and $25 to $30 for a 48-unit package (Garrett 1994; Tan Sheet 1996). By comparison, the average wholesale price of $3.77 per day for Nicorette (2 mg strength) is more expensive than methadone ($0.50 per day) and LAAM ($2.00 per day), but is less expensive than naltrexone ($4.50 per day).

In terms of market share, Nicorette currently dominates the smoking cessation treatment product market; Nicorette accounts for 81 percent of the market, while its closest competitor, Nicoderm CQ only accounts for 6.5 percent of the market (Tan Sheet 1997).

Figure 34: Nicorette Sales in 1996 in U.S. Market

Figure 34: Nicorette Sales in 1996 in U.S. Market

Policy Interaction in Product Development and Distribution

As discussed above, the federal government played an important role in the development of the medication. Grants from NCI, NIDA, and NLBHI funded, in part, research that laid the groundwork for the development of nicotine replacement therapies. After Ferno et al. developed the nicotine polacrilex gum, the FDA granted this research top priority (Nunn-Thompson 1987).

During the early 1980s, the FDA acknowledged the emergence of treatment systems for smoking cessation. In response to the research on these treatments, the FDA established conditions under which OTC smoking deterrent drug products would be recognized as safe and effective. In its proposed conditions, the FDA acknowledged that a single protocol for the evaluation of smoking deterrent products is not necessarily universally appropriate. However, the FDA also acknowledged that "it is imperative that well-controlled clinical trials be performed to evaluate these drugs. In designing these trials, important issues must be considered carefully in order to ensure proper evaluation" (Federal Register 1982). The guidelines and the conditions established by this panel of officials shaped the clinical trials that were eventually conducted on Nicorette and other smoking cessation products approved for OTC use.

Likely Future of the Product

Currently, the 2 mg and 4 mg strengths of Nicorette are available to consumers as OTC products. In February 1996, Nicorette obtained market exclusivity for their product under the Waxman-Hatch regulations; this market exclusivity will expire as of February 1999. Phase IV clinical trials are currently being conducted by SmithKline Beecham on safety of the medication in adolescents; it is uncertain whether these clinical trials will be employed to get a new indication for the medication.

Currently, three smoking cessation products, Nicorette gum (SmithKline Beecham), Nicoderm CQ patch (SmithKline), and Nicotrol patch (McNeil), have been approved by the FDA for OTC use. Product development continues and new methods of delivery (i.e. inhalers) have recently been approved by the FDA for prescription use. Once the market exclusivity on Nicorette, granted as of February 1996, expires in February 1999, SmithKline is likely to see other comparable products vying for market share.


As discussed above, the market for smoking cessation products differs significantly from the markets for medications such as LAAM or naltrexone. First, the size of the potential market varies tremendously. According to the Centers for Disease Control and Prevention (CDC), nearly 48 million people identified themselves as current smokers in 1994. In 1995, there were only 496,000 individuals that were identified as heroin addicts. The potential return on investment is higher in the market for smoking cessation in part due to its tremendous size. Second, manufacturers of Nicorette did not have to overcome regulatory barriers (i.e. rescheduling of the medication) after FDA approval, and did not have to adhere to DEA regulations. Once Nicorette was approved, the drug companies were able to initiate their marketing strategies throughout the country. Third, SmithKline Beecham and Marion Merrell Dow were able to directly market the medication to physicians in the private and public sectors and to pharmacies; their marketing strategies were not limited to a select number of highly regulated clinics.

These differences have significantly influenced the level of market penetration obtained by the smoking cessation products versus the market penetration of other pharmacotherapies for substance abuse addiction. In the past 15 years since its initial approval, Nicorette has been taken by over 13 million people in the United States alone (The Tan Sheet 1996).