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Over-the-Counter versus Prescription Drugs

December 14, 2011 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com Source: Navitus Clinical Journal – December 2011

Hundreds of drugs are available over the counter, including, but not limited to, cough and cold medications, pain relievers (aspirin, ibuprofen) and heartburn drugs. Over-the-Counter (OTC) drugs are drugs that you can buy without a prescription. Many of these drugs have been available for a very long time and have long track records for safety. Others are newer and often started out as prescription drugs. Some drugs that have become available as OTC in the past few years include heartburn drugs – Zantac, Pepcid, Prilosec OTC – and the allergy drug Claritin.

Why do drugs become OTC?
Drug manufacturers have an incentive to make their product(s) available OTC, since it is easier for patients to purchase a drug over the counter rather than via a prescription from their doctors. Because of the availability of OTCs, switching a drug to OTC can increase the drug manufacturer’s sales.

Drug manufacturers may also want to have their product available OTC as part of a larger strategy to protect and increase their profits. This usually happens when a prescription drug’s patent is about to expire. For example, when Prilosec’s patent expired, the manufacturer petitioned the Food & Drug Administration (FDA) to make it available over the counter, while at the same time introducing a “new,” chemically similar prescription drug, Nexium.

Regulation and safety of OTCs
The FDA regulates OTC drugs, just as it regulates prescription drugs. The FDA decides whether to allow a drug to make the switch from prescription to OTC. To approve a drug as an over-the-counter drug, the FDA must find that:

  • Its benefits outweigh its risks. In other words, the improvements to the patient’s health from taking the drug are more valuable than any negative side effects.
  • Its potential for misuse and abuse is low. The drug should not be habit-forming and should not encourage people to overuse it.
  • Consumers can use the drug for self-diagnosed conditions. The drug is not intended for a condition that needs testing or a doctor’s diagnosis, such as high cholesterol. Instead, the drug treats a symptom that is obvious to the average consumer, such as headache or allergy.
  • The drug can be adequately labeled. The warnings and instructions for use are clear and easy to understand without any training.
  • The drug does not need a doctor’s supervision, and the drug is easy to use. For example, the drug does not need a doctor to monitor and change the dosage.

In general, the risks or side effects of OTCs are low, how to use them is clear, they treat conditions that patients can easily recognize, and they give consumers greater choices.

Are OTC’s less expensive than prescriptions?
It depends. OTCs may be covered by your plan sponsor. If that is the case, you may only need to pay a copay for these drugs. Depending on your plan sponsor’s plan design, the copay may be less expensive than the cost of the OTC. Alternatively, your plan sponsor may not cover the OTC you need, but it may cover a generic version of that drug. In this case, the generic version is likely less expensive than the OTC.

As dozens of blockbuster drugs begin to lose their patents in the next few years, we can expect to see more switches from prescription-only to OTC.

THE CLINICAL AND FINANCIAL VALUE OF EVERGREENED DRUGS

August 31, 2011 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News

www.Medtipster.com Source: Navitus Clinical Journal, August 2011

Occasionally, when a patent on a brand drug is about to expire, the manufacturer will create what is unofficially known as an “evergreened” version of the drug. An evergreened drug typically is a metabolite (a substance normally resulting from metabolism of another substance in the body) or other very close chemical relative or a reformulation (extended release version) of a highly profitable, brand drug. For the purposes of this article, we will examine metabolites/close chemical relatives to discuss how a transparent PBM evaluates these drugs as they relate to their formularies.

What is an Evergreened Drug Exactly?
Evergreened drugs are slightly different chemically from their parent (original brand) drug. Some examples of parent brand drugs and their evergreened versions include the evergreening of Claritin to Clarinex, Zyrtec to Xyzal, and Prevacid to Kapidex. Because of the chemical difference in evergreen drugs, the Food & Drug Administration (FDA) considers these drugs to be new drugs. Therefore, the manufacturer is required to submit a New Drug Application, proving the new drug is not a placebo and that it is safe and effective.

Although evergreened drugs may be approved by the FDA, they rarely offer a distinct clinical advantage to the parent drug (occasionally, they are relatively more tolerable). In cases where the evergreen drug provides more tolerability, the clinical advantage dictates the value of the drug and it is placed at a preferred formulary tier. More often, however, there is no evidence that any efficacy or tolerability advantages exist with the evergreened drug over the parent drug.

What is the Financial Value of Evergreened Drugs?
Pharmaceutical manufacturers make a strong effort to maintain the market status of a drug in order to maintain a large share in the marketplace. Some steps used to promote the evergreened drug include:

  1. Increasing public awareness of the drug through direct to consumer advertising—This tactic is used to increase the number of claims for the drug, creating a perceived need for the drug in the marketplace.
  2. Setting the price of the new drug below that of the parent drug—The lower cost may appeal to plan sponsors.
  3. Aggressively rebating the drug—A high rebate may appeal to plan sponsors.

These financial incentives may be tempting, until one considers that the patent expiration of the parent drug is usually imminent, meaning that generic versions will soon be on the market. Generic drug versions typically cost about 20% of the total cost of the parent drug. While the incentives above may make the evergreened drug look financially viable compared to the parent, these incentives will typically be short-term. Even with price reductions and/or aggressive rebates, the evergreened drug rarely meets the low cost of the generic version(s).

How does a transparent PBM Evaluate these Drugs?
Since a transparent PBM manages its formulary to the lowest net cost, each drug is scrutinized for its clinical effect and overall cost. Drug cost becomes an important factor when the clinical advantage of the ‘new’ or evergreened drug over other drugs in its category is unclear. In these cases, where the clinical efficacy is the same for multiple drugs in a category, the PBM will maintain the lowest-net-cost product that yields the best drug therapy. This approach achieves the same clinical results with the lowest price for the client and member. As such, the PBM will often not include the evergreened product on its formularies or will include it on a non-preferred tier (with some exceptions).

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