The Costs and Benefits of Switching a Drug from Prescription-Only to Over-the-Counter Status

Summary

In recent years various governments, pharmacy associations, consumer groups and the pharmaceutical industry have suggested that more drugs should be switched from prescription-only (Rx) to over-the-counter (OTC) status. Many rationales have been offered, including lowering healthcare costs, taking advantage of pharmacists’ training and knowledge, promoting the concept of prevention and self-care, and increasing sales of pharmaceuticals.

The purpose of this article is to examine the current state of knowledge on assessing the effects of such a change. First, the paper discusses the methodology and data necessary for conducting an assessment of the costs and benefits of switching a drug from Rx to OTC status. Basically two methods, the economic theory of consumers’ surplus and the epidemiological approach, are available; the choice of method depends on the drug examined and the data available.

Secondly, the article discusses existing evidence pertaining to the costs and benefits of these switches. Based on our review of the literature, we conclude that the benefits, to individual consumers and to society as a whole, resulting from a change in prescription status outweigh the costs. The extent of the benefits depends on the type of drug and the size of the market.