A new battle over rising drug prices will ignite Friday when U.S. drug regulators convene a precedent-setting meeting to determine whether some of the best-selling prescription allergy medicines in the U.S. should be sold over the counter.
Food and Drug Administration
advisory committee meeting is charged with determining if
-- marketed by
, respectively -- are safe enough to be sold over the counter. The advisory committee decision will then be passed to the FDA, which has the final say.
What makes this meeting so unusual is that the drug companies are fighting the switch. Instead,
WellPoint Health Networks
, one of the country's largest health care companies, is pushing the FDA to make these allergy drugs available right off supermarket shelves. This case marks one of the few times that an outside petitioner -- and not a drug's maker -- has asked for a switch from prescription-only status.
Pfizer, Aventis and Schering-Plough have a lot to lose if the FDA sides with WellPoint. Combined, the three allergy drugs racked up $4.5 billion in U.S. prescription sales in 2000, with Schering-Plough's Claritin accounting for more than half of that total, according to
. A portion of that revenue would be in jeopardy because over-the-counter drugs typically sell at a fraction of the cost of prescription drugs.
FDA regulations allow drugs to be sold over the counter if consumers can self-diagnose their ailment, understand how to take the drug and can do so without suffering significant side effects.
But while safety will be topic of the meeting, the real fight is over the relatively high cost of these widely prescribed drugs in the U.S. And the meeting comes at a time when sales of prescribed drugs are skyrocketing and lawmakers are debating the addition of a prescription-drug benefit for
, the federal health insurance program for the elderly and disabled.
WellPoint insists that it is acting on behalf of 40 million Americans who it says pay too much for prescription drugs, especially for drugs that are really safe enough for over-the-counter sale.
The health care company and its 10 million members claim to spend $90 million a year on prescription, nondrowsy antihistamines like Claritin, Allegra and Zyrtec, including fees for doctor visits. According to WellPoint, these drugs cost a user an average of $85 a month in the U.S., compared with about $11 a month in countries like Canada where they're already sold over the counter.
If the FDA approves the switch, WellPoint will no longer have to cover the cost of these drugs for its members and will be able to use the $90 million to offset the costs of other prescription drugs, the company claims.
But greed, and not consumer advocacy, is the real motivation of WellPoint and its supporters, counter the drugmakers. Schering-Plough will argue that its drug, Claritin, is not safe enough for patients to use without a doctor's care, according to preliminary arguments filed with the FDA. The drugmaker also believes that WellPoint simply does not want to pay for these allergy drugs anymore and is trying to force its members to bear the full brunt of the costs.
"Schering-Plough believes that the
WellPoint petition, while good for the insurance company, would not be in the patient's best interests," the company says.
The FDA advisory committee seems to be leaning toward recommending that at least two of the drugs -- Claritin and Allegra -- are safe enough to become over-the-counter products, according to documents filed on the FDA's Web site. Only Zyrtec showed "a preponderance of neuropsychiatric adverse events," which means the drug seemed to make patients drowsy, according to the advisory committee.
Ironically, all three of these "second-generation" allergy drugs are supposed to be safer than current over-the-counter medicines because they're all formulated to be nondrowsy.
But if the advisory committee recommends over-the-counter status for Claritin and Allegra, and the FDA agrees, can the agency make its decision stick? These are uncharted waters, so opinions vary.
A WellPoint spokesman, Larry Bryant, insists that the FDA does have the power under its regulatory purview of drug classification to force a drugmaker to sell a product over the counter.
Stuart Weisbrod, chief investment officer for the
Merlin Biomed Group
, a health care hedge fund, disagrees.
"The advisory committee vote is irrelevant because the FDA can't force a company to market its drug over the counter," he says. "If the FDA forces Schering-Plough to sell Claritin over the counter, and then a patient gets sick or dies while taking the drug, who takes on the liability? This kind of action is unprecedented." Weisbrod is long Schering-Plough.
Observers like Weisbrod concede that the scientific argument for switching the drugs is strong, but that the FDA may just shy away from the issue by asking for additional studies that could stretch a final decision out another two years. By that time, Claritin will have lost its patent protection anyway and the whole issue will be moot.
But if WellPoint does win its case, it may embolden proponents of lower drug prices to go after other classes of popular prescription drugs. If that happens, the FDA may be forced to make some difficult decisions, and these cases could end up in federal court.
Shares of Schering-Plough were up 4 cents to $37.94 in recent trade Thursday. Pfizer was down 63 cents to $43.82, and Aventis was up 25 cents to $76.85.
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