This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

FDA Peers Over the Counter

When federal advisory committees meet later this week to decide if Merck's (MRK) cholesterol drug Mevacor can be sold without a prescription, they may be taking the next step in putting more health care responsibility into the hands of patients -- or more money in the pockets of drugmakers and insurers.

Since the mid-1970s, efforts to switch drugs from so-called status Rx to over the counter (OTC) have been couched in terms of patient empowerment and consumer savings. "OTC medicines continue to be an extremely cost-effective option for the millions of consumers who are following the trend of self-reliance," says the Consumer Healthcare Products Association, which represents over-the-counter product makers.

"The FDA's goal is to increase Rx-to-OTC switches by 50% on average," the Food and Drug Administration said in a budget request for the recently completed fiscal year. The FDA said it should become "more proactive in recommending" switches "that could result in further consumer empowerment in self-medication as well as provide an expedient way to significantly reduce consumer health care costs for certain ailments."

But neutral observers say the switches are essentially motivated by companies trying to wring extra profits out of flagging prescription products and by insurers and managed-care companies trying to cut costs.

"Maintaining sales post-patent expiry is a key driver of the implementation of an Rx-to-OTC switch," said Adele Schulz, a health care analyst at Datamonitor, a London-based health care strategy firm. Companies often wait until a prescription product is near its patent expiration date, then they seek to switch the drug to "capitalize on hard-earned brand equity even after patent expiry," Schulz said.

"Switching drugs to over-the-counter availability reduces insurers' prescription drug costs but increases the costs for most patients," says a recent study by the Tufts Center for the Study of Drug Development at the Tufts University School of Medicine in Boston. "However, some will benefit, particularly uninsured patients, who previously had to pay the full retail prescription price and the cost of physicians' visits."

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs