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Tufts report: Pace of switching drugs from prescription to OTC status will increase

BOSTON, MASS., Jan. 27, 2004 -- Responding in part to growing public concern about rising spending on prescription medicines, the FDA will accelerate the switching of prescription medicines to over-the-counter status, according to the Tufts Center for the Study of Drug Development.
Supporting the effort will be the drug companies themselves, as well as third-party payers, reported the Tufts Center in its recently released Outlook 2004 report on drug and biotech development trends.

"Consumers, especially those who pay out of pocket for prescription medicines, like the change from prescription to over-the-counter status, because it usually means lower prices for those products," said Tufts Center Director Kenneth I Kaitin.

"People whose health insurance plan offers some form of drug benefit, however, frequently do not benefit from such a switch in status, since insurers typically don't cover the cost of over-the-counter drugs. At the same time, insurers often raise co-pays for prescription- only drugs remaining on formulary in the same therapeutic category."

The Tufts Center's Outlook 2004 also notes:

  • Up to 15 blockbuster drugs (each with more than $1 billion in annual sales) due to lose patent protection through 2008 are candidates for prescription to over- the-counter switches.
  • The overhaul of Medicare, due to take effect in 2006, which explicitly prevents the federal government from negotiating drug prices with pharmaceutical firms, will increase pressure on private pharmacy benefit managers to be more forthcoming about negotiated prices and rebate pass-throughs to health plans, employers, and beneficiaries.
  • To cut costs, at least 10 state Medicaid agencies will establish restricted formularies and expand disease management programs.

Source: The Tufts Center for the Study of Drug Development

Posted: January 2004