Potential Effects of Introducing Behind the Counter Drugs
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WORKING P A P E R Potential Effects of Introducing Behind the Counter Drugs NEERAJ SOOD, ERIC SUN, XIAOHUI ZHUO, AND MARGARET BLUME-KOHUT WR-608-ASPE August 2008 Prepared for the Office of the Assistant Secretary for Planning and Evaluation, United States Department of Health and Human Services This product is part of the RAND Health working paper series. RAND working papers are intended to share researchers’ latest findings and to solicit informal peer review. They have been approved for circulation by RAND Health but have not been formally edited or peer reviewed. Unless otherwise indicated, working papers can be quoted and cited without permission of the author, provided the source is clearly referred to as a working paper. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. is a registered trademark. Contents Abbreviations ................................................................................................................................ ii Introduction..................................................................................................................................iii Chapter One: Review of the Literature...................................................................................... 1 Introduction............................................................................................................................... 1 Methods..................................................................................................................................... 2 The Effect of BTC/OTC Drugs on Utilization ......................................................................... 3 The Effect of BTC Drugs on Utilization............................................................................. 3 The Effect of OTC Drugs on Utilization ............................................................................ 6 Conclusions......................................................................................................................... 9 The Effect of BTC/OTC Drugs on Health.............................................................................. 10 The Effect of BTC Drugs on Patient Health..................................................................... 10 The Effect of OTC Drugs on Patient Health..................................................................... 11 Conclusions....................................................................................................................... 14 The Effect of BTC/OTC Drugs on Costs................................................................................ 14 The Effect of BTC Drugs on Medical Costs..................................................................... 15 The Effect of OTC Drugs on Medical Costs .................................................................... 16 Conclusions....................................................................................................................... 23 Conclusions............................................................................................................................. 24 References............................................................................................................................... 27 Chapter Two: The Effect of OTC Drugs on Physician-Office Visits ..................................... 31 Introduction............................................................................................................................. 31 Data......................................................................................................................................... 33 Methods................................................................................................................................... 34 Results..................................................................................................................................... 38 Conclusions............................................................................................................................. 42 References............................................................................................................................... 44 Appendix to Chapter Two.......................................................................................................... 45 Chapter Three: Effect of BTC/OTC Drugs on Utilization, Prices, and Expenditures......... 46 Introduction............................................................................................................................. 46 Background............................................................................................................................. 48 Data and Methods ................................................................................................................... 50 Data................................................................................................................................... 50 Methods............................................................................................................................. 52 Results..................................................................................................................................... 56 Results Using International Sales/Prices as Controls ....................................................... 56 Results Using Domestic Sales of Same-Class Drugs as Controls .................................... 57 Discussion............................................................................................................................... 59 References............................................................................................................................... 61 Appendix to Chapter Three .......................................................................................................63 i Abbreviations BTC behind the counter CUSTOM Consumer User Study of OTC Mevacor DD difference-in-differences FDA U.S. Food and Drug Administration GERD Gastro Esophageal Reflux Disease GI Gastro Intestinal H2RA H2-receptor antagonist HMO health maintenance organization NAMCS National Ambulatory Medical Care Survey NDA new drug application NRT nicotine-replacement therapy OTC over the counter PPI proton-pump inhibitor UTI urinary tract infection ii Introduction In the United States, drugs can be divided into two categories: prescription drugs, which are only available with a physician’s prescription, and over-the-counter (OTC) drugs, which can be freely purchased from many outlets, such as pharmacies and grocery stores. Both classes of drugs are regulated by the U.S. Food and Drug Administration (FDA). OTC drugs can be introduced to the market in one of two ways. First, particularly for older drugs, the FDA has established drug monographs that detail acceptable ingredients, dosages, and formulations. Products conforming to these monographs can be marketed without premarket FDA approval. If a monograph does not exist for a particular drug, then the drug must be approved via the new drug application (NDA) process, which is similar to the process used to approve new prescription drugs. As with new prescription drugs, approval requires evidence demonstrating that the drug is safe and effective. In addition, the drug manufacturer or interested party must also establish that (1) the benefits of OTC approval outweigh the risks, (2) the potential for misuse and abuse is low, (3) consumers can understand the product label and accurately diagnose themselves for the indicated condition, and (4) health practitioners are not required for the safe and effective use of the product. The requirement for a physician’s prescription imposes a regulatory barrier to access which has advantages and disadvantages. The main advantage of this barrier is that it prevents misuse of prescription drugs, which may have serious consequences in many cases. Moreover, this requirement places the use of the drug under a physician’s supervision, making it easier for him or her to encourage adherence to instructions, monitor any adverse effects, and identify any potential contraindications. However, requiring a prescription also imposes additional time and monetary costs on the patient; these may reduce access to potentially beneficial therapies. Although it is clear that the advantages of physician supervision may outweigh these increased costs in the case of drugs with high toxicity profiles, it is less clear in the case of many drugs with low toxicity. Therefore, in an effort to increase access to select low-toxicity drugs by eliminating the costs associated with obtaining a physician’s prescription, the FDA is considering a third classification, called behind-the-counter (BTC) drugs. These drugs would be available without a physician’s prescription but, unlike OTC drugs, would not be freely available iii to patients. Rather, they would be available only in pharmacies and upon consultation with a pharmacist. By removing the requirement for a physician’s prescription, BTC drugs may increase access to beneficial therapies by lowering the time requirements and monetary costs associated with obtaining a physician’s prescription, thereby improving patient health and wellbeing. Moreover, BTC drugs could reduce medical spending directly (by reducing the amount of money spent on physician-office visits) and indirectly (to the degree that increased access to these drugs becomes a substitute for more-expensive forms of care).