NCPA - National Center for Policy Analysis


August 22, 2005

Consumers benefit from self-administered over-the-counter (OTC) medications because of lower prices and easier access. However, rigid FDA rules lock many drugs that are readily accessible to consumers in other countries behind U.S. pharmacy counters, say Paul Kittinger, an intern, and Devon Herrick, a senior fellow, both with the National Center for Policy Analysis.

The FDA can approve a prescription drug for OTC sale once it decides that the benefits outweigh the risks, the potential for abuse is low, consumers can self-diagnose the condition, labels can be easily understood and administration by health practitioners is unnecessary.

The 89 prescription products the FDA has switched over the past 30 years include such familiar brands as Advil, Afrin, Drixoral, Aleve, Pepcid AC, Zantac-75, Nicorrette, Rogaine and Lamisil. Recently, however, FDA approval for OTC sale has slowed dramatically, say Kittinger and Herrick:

  • In the past five years, it has reclassified only seven prescription drugs (including the bestselling drugs Claritin and Prilosec).
  • Over a 20 year period, by contrast, European countries approved about four times as many prescription medications for OTC sale as the United States, according to a 2003 report from the Tufts Center for the Study of Drug Development.

Every year, Americans spend more than $200 billion on prescription medicines, but only one-tenth that amount -- about $20 billion -- on OTC medications. Moreover, the average price of an OTC medication is much lower than that of a prescription drug:

  • The average name-brand prescription costs about $96.
  • Generic prescription drugs cost about $28.
  • OTC drugs cost an average of about $7.

Stringent FDA rules limit consumer access to treatments that could safely be moved over the counter. One solution is to allow any drug approved for OTC use in Europe to be sold in the United States, says Kittinger and Herrick.

Source: Paul Kittinger and Devon Herrick, "Patient Power: Over-the-Counter Drugs," National Center for Policy Analysis, Brief Analysis No. 524, August 22, 2005.

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