Drugs and Money - Prices, Affordability and Cost Containment
(2003; 158 pages) View the PDF document
Table of Contents
View the documentIntroduction
Open this folder and view contentsPart I: Problems and approaches to a solution
Close this folderPart II: Selected experiences with policy options
View the documentChapter 6: Measures relating to use of drug subsidy lists and to regulation
View the documentChapter 7: Experiences with budgets
View the documentChapter 8: Experiences with reference pricing
View the documentChapter 9: Experiences with patient charges
View the documentChapter 10: Switching to non-prescription status
View the documentChapter 11: Experiences with generics
View the documentChapter 12: Experiences with pharmacy benefit management programmes in the USA
View the documentChapter 13: Experiences with professional education
View the documentChapter 14: Providing affordable medicines in transitional countries
View the documentChapter 15: Access to medicines in low-income countries
View the documentList of Contributors
View the documentBack cover

Chapter 10: Switching to non-prescription status

Peter R. Noyce

After a new drug has been in use as a prescription-only medicine (POM) for an agreed period after licensing - usually five years - and has proved to be safe and effective during that time, regulatory authorities are prepared to consider submissions for re-designating the product where appropriate so that it becomes available for non-prescription “over the counter” (OTC) use.

A re-designated OTC product may be licensed for the same indications, in the same strength and in the same form and packaging size as the original POM product, or the OTC license for the drug may vary in one or more of these respects. In many countries, for example, H2-antagonists have been licensed as OTC products at lower strengths and with more limited indications than the corresponding prescription products. In the United Kingdom, the pack sizes of the newer antihistamines are limited by regulation to 10 tablets when they are destined for OTC use.

The basic purpose of re-designation of a drug as an OTC product is frankly commercial; the manufacturer requests the change in the hope that, without the need for a prescription, the sale of the drug will increase. However, the change also has a secondary effect in that the drug will no longer - at least in its OTC form - be primarily funded by a national health system or insurance fund; if he has obtained the drug by private purchase, the patient will pay for it in cash, and this will therefore result in cost saving to the health system.

Whether it is still possible to prescribe an OTC drug and therefore have it paid for by the health system is a matter on which the rules differ by country. In many European countries, national health insurance schemes will reimburse OTC items in the same way as prescription-only medicines, provided they have in fact been prescribed. In the UK, for instance, deregulating a drug from prescription-only to OTC status does not affect the availability or cost to the patient under the NHS. In some other EU countries, the co-payment rating is adjusted so that the cost to the patient is the same irrespective of whether it is purchased direct from the pharmacy or obtained on a doctor’s prescription under the health insurance scheme. In yet other countries, OTC drugs have - with some exceptions - been entirely de-listed by health funds since the 1990’s as one of the measures for reducing pharmaceutical expenditure, as for example in The Netherlands, Sweden and the US. What this means is that, in these countries, once a medicine has been accorded OTC status, a patient will have to pay for it, whether it has been prescribed or not, unlike a prescription-only medicine which can be reimbursed. The reasoning behind this latter policy is that OTC drugs are regarded as being in principle safe medicines for minor ailments, used in conditions in which a physician might not prescribe a drug at all. Exceptions are sometimes made (Sweden, Netherlands), in cases where such a drug is needed for the chronically ill.

Because the OTC product can differ in its strength, packaging form and indications from its prescription-only equivalent, there will obviously be plenty of situations where the one is primarily a medical tool meriting insurance coverage and the other is a consumer item.

There is no simple relation between the reclassification of a medicine as an OTC and the level of subsequent prescribing [4]; external factors may play the dominant role. When aciclovir cream was de-listed for the treatment of cold sores the event coincided with heavy advertising for its use. The publicity may have affected the extent of OTC use, but there was little change in the volume of prescribing. When on the other hand clotrimazole products for the treatment of vaginal candidiasis (thrush) were released for over the counter sale, the increase in overall use was accompanied by a decline in the prescribing of these products.

The fact that consumers often prefer to purchase a recently deregulated product directly over the counter, rather than obtaining it on a doctor’s self-treatment and his or her ability to pay. Thus there is a tendency for younger and wealthier consumers to purchase deregulated products of their own volition from pharmacies [3] whilst older and poorer patients continue to rely on the doctor’s choice of undertaken to predict the impact of deregulating of a product on its prescribing under the NHS [2]. The four key factors influencing consumer decisions to purchase directly were, in decreasing order of importance: a stated preference for OTC purchase; an awareness of OTC availability; liability for prescription charges; and the fact that one was not taking other prescription medicines simultaneously.

If the cost of deregulated medicines is to shift away from National Health Insurance Schemes consumers must be made aware, either through health professionals or advertising, of the availability of these products without prescription. If the cost is a factor - for example if the retail price is considered high while the prescription item will be obtainable for a small charge or none at all - or if the over-the-counter product is available only in an inconveniently small package - there will be an incentive to continue to obtain a product on prescription under the National Health Insurance System. In short, various factors determine what the impact of de-listing of a medicine will be on its continued cost to the public budget. Cost and convenience to patients of deregulated medicines are key factors.

In those countries where the switch to OTC does imply elimination from reimbursement, savings are to be expected unless physicians as a consequence shift their prescribing to more expensive but reimbursable alternatives. Such shifts have been described in the past, but there is only limited evidence for them [1,5]; more recent publications indicate that a switching to OTC status can be successful in reducing public or insurance expenditure.

Switching products from POM to OTC status may also result in secondary savings, depending on the health care system. When doctors are paid per consultation (as in France), the reduction of physician visits implies additional savings. When doctors are paid a capitation fee, no direct savings will occur, but their workload might diminish, as has been described for Sweden [1].

In conclusion, there is now fair evidence that where a drug is widely used and has proven safe over a sufficient period, it can be entrusted to patients for “over-the-counter” use and that by removing it in whole or in part from the preserve of professional medicine savings will result. It would however be very wrong if products were to be shifted to OTC use primarily as a means of saving public money; drugs (and especially new drugs) are placed on prescription for sound medical reasons, and if a shift to OTC status is to be considered those reasons must be considered before the decision is taken. In some parts of the world it is fair to say that too many drugs have traditionally been available without prescription or other forms of control, and that as health services develop there may need to be a trend to less rather than more OTC sale.


[1] L. Lundberg and D. Isacson, The impact of over the counter availability of nasal sprays on sales, prescribing and physician visits, Scand. J. Primary Health Care 17 (1999), 41-45.

[2] K. Payne, B.M. Ryan-Woolley and P.R. Noyce, Role of consumer attributes in predicting the impact of medicines deregulation on National Health Service prescribing in the United Kingdom, International Journal of Pharmacy Practice 6 (1998), 150-158.

[3] F. Smith and C. Martin, Reclassification of drugs from prescription-only to pharmacy medicines: patterns of use, Journal of Social and Administrative Pharmacy 16 (1999), 2-12.

[4] D.H.V. Thomas and P.R. Noyce, The interface between self-medication and the NHS, BMJ 312 (1996), 688-691.

[5] A.D. Zechnic, M. Greenlick, D. Haxby and J. Mullooly, Elimination of over the counter medication coverage in the Oregon Medicaid population: the impact on program costs and drug use, Medicare 36 (1998), 1283-1294.

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