Baucus bill cuts OTCs from FSAs

WASHINGTON While the recently released healthcare reform Baucus bill may be a mixed bag for the business of pharmacy, the bill is not necessarily good for purveyors of over-the-counter medicines, which make up the largest chunk of front-end drug store sales.

The America’s Health Future Act of 2009 sponsored by U.S. Senate Finance Committee chairman Max Baucus, D-Mont., includes in the draft the Senate’s version of a proposal already passed by a U.S. House of Representatives committee to restrict eligibility of OTCs for reimbursement under certain savings plans, such as flexible spending accounts, that allow certain healthcare expenditures to be made with tax-exempt dollars.

“While the Senate Finance Committee had previously circulated the bill containing provisions affecting OTC medicines, this was the first time the committee released information about the costs associated with the initiative,” the Consumer Healthcare Products Association stated in a Friday e-newsletter.

Under the proposed bill, OTC medicines would no longer qualify for FSA reimbursement without a doctor’s prescription. The U.S. Joint Committee on Taxation scored this provision as saving the government $2.3 billion over five years and $5.4 billion over 10 years, which is indicative of how much these tax savings are utilized by consumers.

The House version of the OTCs provision would completely eliminate eligibility for OTCs under these types of accounts. That provision scored as saving $8.2 billion over 10 years.

“CHPA continues to be a strong advocate for favorable tax treatment for OTC medicines,” the association stated. “The association is actively lobbying both the House and the Senate to remove or modify the OTC provisions. Coalition letters opposing the OTC language were organized by CHPA and sent to Congress earlier this week.”