Advocates of switching certain drugs from prescription to OTC often claim patients experience cost savings with no decline in quality of care... . Projections of patients' savings are extremely sensitive to the assumptions made about OTC effects on out-of-pocket drug costs, which depend on drug coverage, and on use of medical services. Using health plan data and consumer cost data, this study quantifies the effects of 4 recent prescription-to-OTC switches on patient costs and medical service use.

Advocates of switching drugs from prescription to OTC have pointed to several benefits of this switch, including lower health care costs, expanded pharmaceutical markets, and greater consumer reliance on self-care.[1-3] Studies have imputed savings to consumers from lower OTC prices, fewer physician encounters, reduced loss of work hours, and greater convenience.[4-6] Imputed savings are highly sensitive to their underlying assumptions. Drug coverage, which is typically unavailable for OTC products, can make prescription products far less expensive at point of need. While the physician's role in prescribing medications may be eliminated, medical complications resulting from ineffective self-care can increase physician use.[7-9] Patient out-of-pocket costs and frequency of physician office visits are factors that can and should be objectively quantified. Since January 1997, there have been 15 FDA OTC approvals for agents that were or are also sold as prescription products. Most of these have been newer versions of older OTC approvals (eg, Zantac Effervescent) and new indications (eg, migraine) that were previously prescription only for ingredients already sold OTC (eg, ibuprofen). Only 4 products were newly switched from prescription to OTC. These are cromolyn (Nasalcrom, approved January 6, 1997); tioconazole (Vagistat, approved February 11, 1997); ketoconazole (Nizoral, approved October 10, 1997); and terbinafine (Lamisil, approved March 9, 1999). In this study, consumer out-of-pocket health care costs and medical service use are analyzed for these 4 products. Consumer Out-of-Pocket Drug Costs Methodology OTC product prices were obtained from CVS, a retail pharmacy chain. Prescription out-of-pocket drug costs were calculated for 3 insurance scenarios.

For all products, out-of-pocket drug costs and medical service use increased as products switched from prescription to OTC status. The evidence does not support the view that prescription-to-OTC switches benefit patients either financially or medically.

While removal of drug coverage may result in cost savings to third-party payers, the extent to which these savings are ultimately conveyed to the consumer is uncertain.

Medicaid recipients do not pay premiums for their drug coverage, so it is difficult to imagine how this class of consumers would benefit from lower OTC prices.

Privately insured individuals do pay premiums, but these are heavily subsidized by employers; the extent to which any premium reductions would be passed on to employees in the form of higher wages or other benefits is unclear. Even if it is assumed that third-party savings were fully transferred to the consumer, it still does not follow that the consumer is better off. The consumer can only benefit if health care prices are reduced sufficiently to compensate for the removal of coverage.

This study examined a broader safety question concerning self-care outcomes associated with OTC switches. It provides evidence that medications switched to OTC status have been associated with increased medical visits and increased complexity of these visits (as measured by higher average costs of visits). Several interrelated explanations for this finding exist. Not all consumers are adept at self-care, ultimately requiring increased medical intervention. For the poorest patients, treatment may simply terminate when drugs go OTC. Other patients may access medical care to obtain substitute pharmaceuticals that have not become OTC and are still covered by insurance. As medicine becomes more complex, the dangers of self-care increase.

Funding Information This study was supported by the Integrated Therapeutics Group, Schering-Plough Corporation, Kenilworth, NJ.