Rx-to-OTC Switches Represent Huge Market Potential

Rx-to-OTC switches and the related repositioning of pharmaceutical products from prescription (Rx) dispensing to the retail (over-the-counter or OTC) drug space represent huge market potential.

A Strong Domestic OTC Market

The U.S. market for OTCs more than doubled between 2007 and 2013 growing from $16 billion to $33 billion. [1] By the beginning of 2014, 240 million Americans were using OTC medicines. [2] When a product moves from behind the pharmacist’s counter to the retail shelf, it can deliver significant increases in revenue. For example, when nicotine replacement therapies switched to OTC, sales nearly doubled the first year. [3] [4] Click here to view additional examples of successful Rx-to-OTC switches. [5] The customer base also tends to be brand-loyal as it has been reported that 60 million consumers would not seek alternatives if their OTC medicines were unavailable. [6]

Growing International Sales for OTC Medicines

Compounding the potential of the US marketplace, the global sales for nonprescription drugs are expected to exceed $70 billion by 2015. [7] Favoring this trend, the European Union, China and other countries have broadened their policies for nonprescription use of drug products that were once available only by prescription. [8]

NSURE Expanding Rx-to-OTC Switches

Launched in 2012, FDA’s recent Nonprescription Drug Safe Use Regulatory Expansion (NSURE) initiative, is reviewing a number of disorders and prescription (Rx) drug classes that hold promise for conversion to nonprescription (also known as OTC) status.

The potential therapeutic classes that may become more open as a result include migraine treatments, statins, erectile dysfunction medications, sleep aids and drugs to treat other chronic conditions.

NSURE was initially comprised of representatives from FDA, healthcare staff from the Brookings Institute and various Rx-to-OTC experts. [9] A public hearing was held on March 22-23, 2012 entitled “Using Innovative Technologies and Other Conditions of Safe Use to Expand Which Drug Products Can Be Considered Nonprescription”. [10] [11]

By leveraging technologies and conditions of safe use, NSURE seeks to expand the Rx-to-OTC switch paradigm thereby increasing consumer access to necessary medications through nonprescription drug products. Through the public hearing, FDA requested comments on the proposed new paradigm, including its potential benefits and costs, which might contribute to making more of the current Rx therapies available to patients, without a prescription. [12] [13] Rx-to-OTC switches are become increasingly more consistent with objectives of the Affordable Care Act as well as regulatory agencies around the world, including FDA.

Not a Third Class of Drug Products

The NSURE initiative does not seek to create a third class of drug product or necessarily add to the ranks of “behind-the-counter” drugs. The expectation is that NSURE will encourage creation of rapid diagnostic testing, monitoring technologies and the integration of healthcare professionals into existing regulatory pathways to help expand the pool for OTC drug products available to the consumer. [14]

Better Access for Better Outcomes

Several factors contribute to the under-treatment of common diseases (e.g. insurance, medication costs, and inadequate access to care). [15] Many Americans lack regular access to basic pharmacotherapy, a constraint that is believed to contribute to under-treatment of many common disorders. [16] Of particular concern to the NSURE panel was the under-treatment of common chronic diseases that have substantial impact on public health in terms of controllable costs and preventable suffering. [17]

Research suggests that 20% to 30% of prescriptions are never dispensed and fully half of common chronic disease therapies are not taken as prescribed. Nearly 67 million adults have hypertension, yet over half do not have it under control. Over 15% of sufferers simply do not treat the disorder. Similar concerns exist for conditions such as diabetes, COPD, and others. [18] [19]

Affordable access to medication plays a significant role in equipping consumers to manage their healthcare. Therefore, FDA believes greater availability of safe and effective OTC medications is a worthwhile endeavor. [20]

Safe Consumer Use Remains Pivotal to Rx-to-OTC Switches

While the outlook for Rx-to-OTC switches becomes increasingly favorable do not look for change in the key factors related to the conversion of medications from prescription-only to OTC status. Safe and effective use will continue to be critical elements that must be demonstrated in the NDA:

  • The patient must be able to adequately self-diagnose his or her medical condition.
  • The medical condition must be successfully self-treated with the nonprescription product.
  • Self-treatment with the nonprescription medication must be safe and effective under the conditions of actual use by the consumer. [21]

Expect 505(b)(2) Changes

What is expected to change is the mix of innovative new components that may be included in 505(b)(2) NDAs for Rx-to-OTC switches. For example, submissions may conceivably include demonstration of effective pharmacist/patient interfaces and/or proof of patient proper and compliant use of new monitoring technologies.

Rx-to-OTC Consultants Help Streamline the Switch Process

FDA has expressed a desire to increase access to safe and effective nonprescription medications. The opportunities to bring medications, technology, healthcare professionals, and patients together is wide open.

The key to success with an Rx-to-OTC conversion begins at project conception and includes start-to-finish strategic drug development planning. A strategic pharmaceutical consultant such as PDG, experienced with full and partial Rx-to-OTC conversions and nonprescription NDAs can help streamline the process. The path to the next OTC blockbuster could be as close as your next meeting with PDG and the FDA.

About the Author

Charles Jaap is Vice-President of Operations and Business Development for Pharmaceutical Development Group, Inc. PDG® is a global pharmaceutical consultant with extensive experience in the strategic development of specialty, niche and differentiated drug products. From identification and choice of viable candidates for traditional or orphan drug designation, through ensuring the existence of cost-effective commercialization strategies, PDG is unique in its ability to comprehensively and ideally integrate products, dosage forms, populations and FDA regulatory pathways. Please feel free to contact us for more information.

The opinions and statements in this paper are solely those of Charles Jaap and do not necessarily reflect those of PDG.

Sources:
[1] OTC Retail Sales 1964-2013, CHPA 2014
[2] The Value of OTC Medicine to the United States, booz&co., CHPA, January 2012
[3] Rx-to-OTC Switch, CHPA 2015
[4] Navigate the Development and Commercialization of a Successful Prescription to Over-the-Counter Switch, CBI, 2015
[5] Innovator or Generic, All Roads Lead to the 505(b)(2) Charles O. Jaap V, MBA, RAC, 2014
[6] Ibid @ 2
[7] The Over-The-Counter Drug Industry, Kathlyn Stone, About Money
[8] Successfully Making the Rx-to-OTC Switch, Scott P. Lauder, PM 360, September 18th, 2013
[9] A NEW FDA-Driven Rx-to-OTC Switch Initiative: The Expansion of “Conditions of Safe Use”, Francesco International, January 2013
[10] Nonprescription Drug Safe Use Regulatory Expansion (NSURE), Rikin S. Mehta, FDA, October 4, 2012
[11] Ibid @ 9
[12] Ibid @ 10
[13] Ibid @ 9
[14] Ibid @ 10
[15] Ibid @ 9
[16] Exploring Implications of the Nonprescription Drug Safe Use Regulatory Expansion (NSURE) Initiative on Reimbursement and Access, Engelberg Center for Healthcare Reform at Brookings, November 4, 2013
[17] Ibid @ 16
[18] Ibid @ 16
[19] Ibid @ 9
[20] Ibid @ 9
[21] Baker, Daniel E, Nonprescription Drug Safe Use Regulatory Expansion, Hosp Pharm. Jun 2013; 48(6): 448–450.
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