Over-the-counter medicines provide $102B in profits

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Allowing people to purchase over-the-counter (OTC) medications at local drugstores provides the U.S. healthcare system $102 billion in profits annually, and each dollar spent on OTCs saves $6 to $7 for the healthcare system, according to a white paper released Jan. 31 by Consumer Healthcare Products Association (CHPA). Without OTCs, an additional 56,000 medical practitioners would be needed to assist with the increase in office visits, which would not bode well for the current physician shortage.

“For millions of Americans, OTC medicines are accessible, relied upon, and effective,” according to the white paper. In fact, U.S. consumers spent $23 billion on OCT medicines in 2010 alone. OTC medicines are available without prescriptions at varied retail outlets and commonly aid consumers in treating common conditions such as cold and headache, among others.

The survey, conducted by Booz & Company, surveyed 3,200 consumers as a means to measure aggregate cost savings of OTC medicines. The analysis was performed for seven categories of the most common acute and chronic conditions: allergy, anti-fungal, cough/cold/flu, lower and upper gastrointestinal and medicated skin.

The authors estimated that OTC medicines help 240 million people. It was estimated that if OTC options were not available 180 million people would seek treatment, triggering a significant increase in costs to the healthcare system. In fact, prescription medication costs to treat these 180 million people would equate to $25 billion, and consumers, payors and the government would need to fork over $77 billion to cover medical visits and diagnostics.

Interestingly, the use of OTC medicines saves the healthcare system $28 million in unnecessary Medicaid and uninsured patient costs.

“When you consider that every dollar spent on an OTC medicine saves our system $6 to $7 dollars in avoided costs, it is paramount that our policymakers do all they can to encourage consumer access to OTC medicines for self-treatable conditions,” CHPA President and CEO Scott M. Melville said in a statement.

Melville said that the study findings show the importance of reversing a provision in the Patient Protection and Affordable Care Act that would prohibit consumers to use flexible spending arrangements to purchase OTCs without a prescription. “Ending this provision will reduce unnecessary office visits, which will save time and money for patients, physicians and the healthcare system," Peter W. Carmel, MD, president of the American Medical Association added.

Currently, CHPA is urging Congress to repeal the OTC provision, which includes the Restoring Access to Medication Act (S 1368/HR 2529) and Patients’ Freedom to Choose Act (HR 605/S 312).