Although President-Elect Trump wants to lower drug prices, he may not know about a tool he can use to not only push prices down, but also lower medical costs. The answer: change the FDA’s regulations to make more commonly prescribed drugs ‘Over the Counter’ (OTC).
In the drugs section of your local pharmacy you’ll recognize drug brands that were prescription-only a few years ago, but today are on the racks with other OTC drugs. The difference isn’t in the formulary, it’s that the FDA has deemed these drugs suitable now for direct purchase.
What would happen if President Trump put pressure on the FDA to speed up and expand the list of drugs to go OTC?
First, the President wouldn’t have to negotiate those drug prices; COSTCO, BJ’s, Sam’s Club and Wal-Mart would do it for him. People could shop around for the best price. Those with Health Savings Accounts (HSAs) could use their funds to purchase drugs. And buyers wouldn’t need to spend money on a visit to the doctor to buy a routine drug.
Second, it would free up countless hours for physicians, nurse practitioners, and their staffs from having to issue prescriptions, manage refills, etc.
Let’s assume a widespread effort to grant OTC status to drugs gave a physician an extra hour every two weeks whereby he/she could see patients.
In economic terms, seeing patients is the highest and best use of a physician’s time. Approving prescriptions that could have been purchased OTC if only the FDA had hustled up is not the best use of a physician’s time.
It also means the physician can have a higher patient load. Since a physician’s office has fixed costs (rent, equipment, salaries for assistants), when these costs can be spread over more patients, per-patient costs are reduced.
Dentists have been doing something similar for years, as dental work is very price sensitive. Decades ago they discovered having a lower-paid hygienist do the initial work (teeth cleaning), it freed up the higher-qualified dentist to see more patients. Any ECON 101 textbook will explain how fixed costs spread over more patients results in lower costs.
Third, the United States has a rich data source in the EU to help the FDA determine which drugs should be OTC and which should not.
For decades EU pharmacists have sold drugs OTC that require a prescription in the United States. I discovered this years ago, when I had left my prescription shampoo at home and found I could buy the exact same product at a pharmacist’s shop in Amsterdam.
If the hyper-regulated EU can deem a drug suitable for OTC purchase, why can’t the FDA follow suit?
Further, my guess is the EU has a list of drugs deemed not-quite OTC worthy – and to purchase the drug the buyer has to speak to the pharmacist first. This is an acceptable method of control, as it doesn’t require (more expensive) physician involvement.
Since American pharmacies already require a driver’s license to purchase decongestant drugs containing pseudoephedrine, the same requirement could be used for other not-quite OTC worthy drugs.
Streamlining the transition of prescription drugs to Over The Counter status hits all the bases. It lowers medical costs over several dimensions, and gives consumers more choices and easier access to the drugs they need. Plus there’s plenty of data in the EU to guide the FDA as to which drugs are safe to go OTC, which are not, and which need some level of control.
A new FDA regulation to speed up the process of moving drugs from prescription to OTC status should be a top priority for President-elect Trump. It’s a way to improve health care for Americans that doesn’t involve the Obamacare mess – or Congress.
If the President-Elect agrees, he’ll need the incoming director of the Office of Management and Budget to fast-track the regulatory changes (which otherwise would take two years).
Candidate Trump promised to make our country better for ordinary folks. Buying a drug for a cheaper price that doesn’t involve the expense and hassle of going to the doctor for a scrip is a good deal for America.