Covering OTC products offers plans untapped saving opportunity

By Chris Hanson-Ehlinger
Thu, Apr, 30, 2015 @ 16:04 PM

describe the imageSave your plan and members money by changing how you cover certain OTC products and excluding select prescription-only alternatives.

The Food and Drug Administration (FDA) converted more than 700 prescription-only products to over-the-counter (OTC) status since 1976. The switch to OTC status presents benefits and drawbacks. For example, OTC products let people self-treat as needed without doctor visits. On the other hand, people may choose not to treat their conditions with OTC products due to affordability. While many OTC products are less expensive than their prescription-only counterparts, the OTC out-of-pocket price may be too costly for some individuals. As a result, they may choose a more expensive prescription-only alternative because their insurance copays are less than the OTC product price.

As examples, consider the case for covering OTC proton pump inhibitors, nasal steroids and non-sedating antihistamines.

Proton pump inhibitors

PPIs are prescribed for conditions including gastroesophageal reflux disease (GERD), heart burn, duodenal ulcer disease, gastric and stress ulcers, and gastric hypersecretions. There are six PPIs on the market, all available generically. Three PPIs switched from prescription-only to OTC status: Nexium 24-hour, Prilosec OTC and Prevacid 24-hour. All are as safe and effective as the prescription-only products.

However, the price of OTC PPIs is significantly lower than prescription-only product. For example, the average unit price of OTC PPIs is $0.60 while the price for prescription-only PPIs ranges from $3 to $17. A case can be built to exclude or restrict prescription-only PPIs from coverage and cover OTCs instead. OTCs allow individuals access to multiple, effective therapeutic options at a reasonable cost while saving the plan money overall.

Nasal steroids

Nasal steroids are another class of drugs that could save plans money if OTCs were covered. Nasal steroids are commonly used for allergic rhinitis and asthma. There are more than 10 nasal steroids on the market all with slight variations in their approved indications. Two prescription-only nasal steroids, Nasacort Allergy 24-hour and Flonase, have been switched to OTC status. As with PPIs, the OTC nasal steroids tend to be significantly less expensive than prescription nasal steroids. OTC products range from $1.11 to $4.63 per unit compared with $2.64 to $34.69 for prescription-only products.

Non-Sedating Antihistamines

Non-sedating antihistamines are typically used for seasonal allergic rhinitis. There are five non-sedating antihistamines on the market. Three prescription-only non-sedating antihistamines have been switched to OTC status: Claritin, Allegra and Zyrtec. The others are available generically (except Clarinex, which is available as brand name only). As with PPIs and nasal steroids, OTC non-sedating antihistamines tend to be cheaper than their prescription-only counterparts.

OTC products present an untapped savings opportunity. While OTC products have not traditionally been considered for pharmacy benefit coverage, plans may want to reconsider that strategy. Covering less expensive OTC alternatives may reduce use of more expensive prescription-only products, as demonstrated by the three common conditions mentioned. And, as more prescription-only products move to OTC status, the savings opportunity will only increase.

Phil DeNucci, RPh, is a managing consultant working with Burchfield’s key self-funded employer and coalition accounts to help them manage their pharmacy benefit programs. For more information please call 800-778-1359 or send us a note (

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