House to consider repealing prescription mandate on OTCs purchased through FSAs

WASHINGTON — The House of Representatives will vote to repeal limitations on the use of tax-advantaged accounts for the purchase of over-the-counter medications as early as June 4, according to a report published online by The Hill, a Washington, D.C.-based political newspaper.

The paper cited a planning memo from majority leader Eric Cantor, R-Va.

Just last month, the House Subcommittee on Oversight of the Committee on Ways and Means held a hearing around that piece of legislation. "Physician groups have suggested that the OTC medication prescription requirement has imposed an unreasonable administrative burden, resulted in longer waits for appointments and increased healthcare costs," the subcommittee reported in April.

“Too often in Washington, officials make decisions about healthcare policy based on abstract theories and budgetary scores," stated subcommittee chairman Rep. Charles Boustany, R-La., in announcing the hearing.

According to testimony submitted by the Consumer Healthcare Products Association at that hearing, since the Patient Protection and Affordable Care Act went into effect on Jan. 1, flexible spending account participants have been faced with three choices on having their OTC medicines reimbursed — make an additional doctor's appointment to obtain a prescription for a nonprescription therapy; forego between 10% and 35% in savings, depending on the individual's tax bracket, by buying the medicine without reimbursement; or go without treatment altogether.

“None of these options are good healthcare policy," testified Scott Melville, CHPA president and CEO, during that April hearing. "None of these options increase healthcare access, but they do increase costs to consumers and to our healthcare system."

Citing a recent study by Booz & Co., Melville estimated that OTCs provide $102 billion dollars in savings to the nation’s healthcare system every year. The benefits are realized through reduced doctor visits (accounting for $77 billion of those savings) and reduced drug costs (accounting for $25 billion in savings).

The study also reported that 240 million people each year treat illnesses with OTC medicines, bought off-the-shelf without a prescription. According to the study, an estimated 60 million of these consumers would not otherwise seek treatment if they could not purchase OTCs.

For the full report from The Hill, click here.

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