NCPA - National Center for Policy Analysis


February 10, 2005

Consumers save money when medicines are sold over the counter, says Devon M. Herrick, a senior fellow with the National Center for Policy Analysis.

For evidence, consider the allergy drug Claritin, formerly available only by prescription:

  • In 2001, a year's supply of Claritin cost about $1,066; two doctor visits a year to obtain prescriptions would likely push the yearly total to over $1,200.
  • In late 2002 Claritin was approved for over-the-counter (OTC) sale, and the price soon dropped to $365 per year, about $1 per tablet -- no doctor visits required.
  • Currently consumers can buy an entire year's supply of OTC Loradatine, the generic version of Claritin, for as little as $31 at a Costco or local dollar stores.

Thus competition has driven the price of generic Claritin down to 10 to 25 cents. Consumers can save almost 98 percent compared to the combined cost (in 2001) of doctor visits and purchases of prescription Claritin, says Herrick.

Some seniors currently pay as much as $1,500 annually on cholesterol control. Mevacor costs about $800 per year exclusive of lab tests and doctor's visits. Lovastatin, the generic version of Mevacor, sells for about half that amount. This suggests that competing drugs, discounted prices and generic over-the-counter versions of prescription drugs could drive the cost of cholesterol treatment down by as much as 90 percent:

  • Merck's proposed selling price of $1 per daily dose for OTC Mevacor ($365 per year) is the same as the initial suggested retail price of OTC Claritin.
  • Had Mevacor became available without a prescription, within three years a generic version could have driven its cost down to 25 cents per daily dose, possibly lower.

Seniors would likely have saved an average of about $1,000 per year, says Herrick, but a Food and Drug Administration panel has voted down OTC Mevacor.

Source: Devon M. Herrick, "Patient Power: Access to Drugs," Brief Analysis No. 500, National Center for Policy Analysis, February 10, 2005.

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