Millions of consumers could end up paying more for some widely used medications as more drugs are switched to over-the-counter status in coming years.
That's because over-the-counter drugs normally are not covered by private insurers' prescription plans or medical-assistance programs.
"Anytime a former prescription drug goes over the counter, it represents a savings for the health plan," said William F. Custer, director of research for the Employee Benefits Research Institute.
Just how much the increasing number of OTC conversions will involve a cost shift from insurer or medical-assistance program is not clear.
"The question is sitting there," said John Walden of the Nonprescription Drug Manufacturers Association. "We in this country have not faced up to the impact of these switches."
He said that in many countries with national health plans an unabashed effort is being made to save costs by making common medications available without prescriptions."
Also uncertain is how often consumers will ask physicians for a prescription version or an alternative prescription drug in order to take advantage of their prescription plans.
According to the industry and analysts such as James Callandrillo of Klein & Co., a New Jersey business consulting firm, over-the-counter medications save the economy billions of dollars annually. The savings comes from eliminating visits to doctors, not taking time off from work, saving travel costs, saving the costs of providing insurance services and the lower cost of over-the-counter medicines. By the year 2000, Klein estimates, the savings will exceed $34 billion.
Insurers' costs for prescription plans have been growing as they have become a fixture of employer health plans. A Bureau of Labor Statistics survey of medium and large firms, for instance, found that 95 percent of the plans featured out-of-hospital prescription benefits.
"Prescription drug coverage is an extremely important part of a health plan," said Donald R. White of the Health Insurance Association of America. "Employees expect it."
The largest costs, Custer noted, are due to drugs prescribed for chronic ailments.
"Non-prescription drugs are cost-effective and will save U.S. health plans," said Callandrillo.
In the case of Monistat 7 and Gyne-Lotrimin, two widely used treatments for recurrent vaginal yeast infections that became available without a prescription earlier this year, the savings will be "tremendous," Callandrillo said.
"The cost has been transferred to the consumers and away from the health-care system," said Callandrillo, who added that the market for prescription yeast-infection drugs was over $200 million.
Doug Petkus of Schering-Plough said sales of its Gyne-Lotrimin have jumped dramatically since the switch early this year.
"Right now we're over $100 million for the year since Feb. 1," he said. Prescription sales for all of 1990 were $22 million.
As a prescription, Gyne-Lotrimin sold for between $20 and $22. Petkus said the over-the-counter price ranged from $10.99 to $18.99, with an average of around $14.
Johnson & Johnson's Ortho Pharmaceutical subsidiary said its Monistat 7 also has done well since it reached the over-the-counter market in March, although a spokeswoman declined to reveal sales numbers.
"We're very pleased with the results so far," said Clare Castaldo. "We expect to be a leader. We were leading on the prescription side by about four to one."
Castaldo said the suggested retail price of Monistat is $17.50 compared with about $25 as a prescription, but said it's being sold many places for less.
Since the federal Food and Drug Administration began reviewing over-the-counter medications in 1976, it has approved only 49 prescription to over-the-counter switches, including antihistamines such as Chlor-Trimeton, Drixoral and Benadryl 25 and nasal decongestants such as Afrin, Dristan Long-Lasting and Actifed. One of the most successful crossovers has been the painkiller ibuoprofen, approved in 1984; Advil and Nuprin are ibuprofen compounds.
Because of a convergence of marketing forces and a new focus by the FDA, a number of top-selling drugs now appear poised to join the crossover ranks.
The over-the-counter market currently has manufacturers' sales of $10.6 billion annually, and analysts say that converting prescription medications to over-the-counter sales is a key to future growth, especially if new product categories and new and expanded uses are approved.
"The Rx to OTC is such a powerful product-launching tool that companies are very pro-active," Callandrillo said. In some cases, consumer-products companies have approached drug manufacturers about helping them market top-selling drugs over the counter.
A Klein study estimated first-year sales of the top 11 potential crossover drugs at more than $1 billion.
Walden said NDMA members are planning to petition the FDA for 48 to 50 more switches over the next three to five years.