Introduction and Background
Over the counter (OTC) drugs are medicines sold directly to consumers without a prescription from a healthcare professional. Traditionally, the range of OTC drugs has been limited to medical diseases and conditions for which consumers can self-diagnose.1 However, the U.S. Food and Drug Administration (FDA) has recently issued guidance that potentially expands the range of drugs that may be obtained without a prescription.2, 3
The FDA now recognizes that consumers are becoming more sophisticated and informed about well-known medical conditions, and at the same time, that some physician visits may unnecessarily add to the nation’s healthcare cost burden. The FDA has also recognized that consumers are becoming more comfortable with aspects of digital health (e.g., apps and streaming, interactive, videos). These recognitions led to the FDA issuing its recent guidance on the topic.
The FDA’s new guidance would expand the range of OTC drugs in cases where “the drug facts labeling4 (DFL) alone is not sufficient to ensure that the drug product can be used safely and effectively in a nonprescription setting.”5 In essence, the FDA is inviting new drug applicants6 to propose innovative approaches, in addition to the DFL, to ensure that a drug is safe and effective for use as a non-prescription drug product. It is important to note the range of products that could become OTC drugs is elastic, and is only limited by the ability of companies to come up with innovative approaches that augment the DFL so that consumers can safely self-diagnose a medical disease or condition.
Non-prescription drugs products in this context are contemplated to include, but not be limited to, cholesterol-lowering medications (e.g., statins), high blood pressure drugs (e.g., ACE inhibitors), asthma drugs (e.g., bronchodilators; inhaled corticosteroids), and antimigraine drugs (e.g., triptans).
Digital Health Applications and Self Diagnosis
The approaches the FDA identifies in the guidance to augment the DFL include: statements or questions contained in a mobile application that can be accessed by consumers; text or images on a video display, including interactive displays for consumers to review; information displayed on websites; and leaflets or other consumer information contained inside the container or carton for the OTC drug product.7
For example, prior to purchase, the consumer could be instructed to respond to a set of questions on a self-selection test in a mobile application. The outcome of the self-selection test may affirmatively indicate if the consumer is an appropriate candidate to use the OTC drug.8 Alternatively, prior to purchase, the consumer could be required to view and affirm a video that describes when and how to appropriately use the OTC drug.9
These examples showcase the increasing power of digital health – e.g., digital health, in addition to the DFL, may help in switching a prescription medicine into an OTC drug. Pharmaceutical companies would need to conduct appropriate studies to demonstrate that consumers can understand and act on the para-DFL information.
Selected Strategic Implications
Pharmaceutical companies should carefully consider the pros and cons of the OTC market. For example, an OTC drug can reach more consumers potentially boosting market size. On the other hand, OTC drugs may not be reimbursed by insurers, and OTC drugs typically – on a per sale basis – have lower margins than prescription drugs.
One place where an OTC approach could make sense is for a pharmaceutical company that is bringing a second-in-class drug to market. The first innovator to market would have significant first mover advantages in building a customer base and marketing to physicians. The pharmaceutical company bringing a second-in-class drug to market could attenuate these first mover advantages by making their second-in-class drug available without a physician, thereby eroding the first innovator to market’s consumer base by offering a therapeutic alternative with a lower barrier to consumer access and a more competitive price point. When considering this strategy, the pharmaceutical company with the second-in-class drug should also consider the unique elements that accompany the OTC approach including a range of distribution channels, a robust sales force, and innovative advertising strategies; and diminished likelihood of consumers being reimbursed by insurance companies.
Companies may consider moving to OTC status towards the end of a drug’s lifecycle. Doing so could deter generic competitors and allow for additional patent and regulatory exclusivity. In fact, pharmaceutical companies should consider the possibility and timing of taking a drug OTC when developing a lifecycle management plan for the drug.