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FDA Peers Over the Counter

Tufts School of Medicine researchers say switches can reduce choices and raise prices for managed-care clients. They interviewed 12 top managed-care organizations and found "a strong tendency" to remove the switched drugs from their formularies -- a list of approved drugs -- and to raise co-payments on similar prescription medications.

"Increasing the co-payments of prescription drugs in the same class gives patients further financial incentive to take the over-the-counter drug," said the Tufts study in the British Medical Journal.

Researchers found that each managed-care firm removed loratadine from its formularies when the drug went OTC and raised co-payments for similar prescription antihistamines. Loratadine is the generic name for Schering-Plough's (SGP) Claritin. The researchers said one-third of the HMOs are removing all other similar antihistamines from their formularies.

The managed-care firms acted similarly with omeprazole, the generic name for AstraZeneca's (AZN - Get Report) Prilosec, which belongs to the proton pump inhibitor class. Eight removed omeprazole from their formularies, and seven raised the co-payments for prescription proton pump inhibitors.

Corporate Strategy

Drug industry observers say Claritin is a good illustration of how a drug company responds to its economic interests.

In 1998, the managed-care company WellPoint (WLP) took the unusual step of asking the FDA to recommend that three prescription antihistamines, including Claritin, become OTC products.

Schering-Plough opposed WellPoint's petition. Two days before a May 11, 2001, meeting of two federal advisory committees, Schering-Plough issued a press release saying OTC Claritin "would force patients to self-diagnose, self-treat and pay the entire cost of their allergy medications." It said the WellPoint petition, "while good for the insurance company, would not be in patients' best interests."

Although the advisory committee supported the WellPoint petition, the FDA didn't act on the request. The agency cannot force a company to switch a prescription drug to OTC status.
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