New study highlights OTCs’ value to the healthcare system

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New study highlights OTCs’ value to the healthcare system

By David Salazar - 04/27/2019

Call it the OTC butterfly effect. New data from the Consumer Healthcare Products Association and IRI is highlighting the ripple effect that a consumer buying an OTC product can have on the American healthcare system — namely, some $146 billion in savings, or an average of $7.20 for each dollar spent on an OTC product.

The study, which examined survey results from more than 5,000 consumers, found that the savings come from both drug cost savings, which totaled $52 billion, and cost savings from avoiding unnecessary clinical visits, which totaled $95 billion.

“It’s hard to imagine what life would be like if OTC medicines weren’t available,” said Scott Melville, president and CEO of CHPA, when the study was released. “For this study, researchers actually mapped out a scenario where nonprescription options weren’t available to determine the value of OTCs to our healthcare system. Not surprisingly, in that scenario, they found most consumers would go to a doctor, get a prescription, or delay treatment and suffer the consequences like more frequent absences from work, for example. There are direct and indirect costs associated with each of these scenarios. And they are enormous.”

The study was focused on the nine OTC categories that comprise the majority of OTC medicines purchased in the United States — allergy, analgesics, antifungals, cough-cold/flu, lower GI, medicated skin, upper GI, sleep, and smoking cessation products. Three of those categories — medicated skin, lower GI and upper GI products — made up roughly 61% of the total cost savings.

The impact of OTC availability, allowing consumers to self-treat their conditions, isn’t just restricted to the healthcare system, either. The report said that if OTC products were less widely available or entirely unavailable, consumers would be forced to see a physician for treatment or diagnosis — typically during working hours.

“With an estimated two hours of lost work on average to get treatment or obtain a prescription through a visit to a physician — including travel time, wait time, and the clinician interaction in the physician’s office — a scenario in which OTC medicines were no longer available would incur significant costs,” the report said.

Additionally, IRI and CHPA noted that if OTC products were less widely available, the nation’s already overburdened healthcare system would see an influx of patients. The study estimates that roughly 90% of consumers who buy an OTC product for a condition would seek medical treatment if the OTC product hadn’t been available.

“It is inconceivable that the U.S. healthcare system would be able to absorb additional office visits from hundreds of millions of consumers to get treatment or obtain prescriptions for mild conditions that they can self-treat,” the report said.

Indeed, in seven categories, more than 35% of consumers said they only use OTC products to treat their condition. For allergy, cough-cold/flu and medicated skin categories, 62%, 68% and 61% of consumers, respectively, said OTC offerings are their only line of defense.

In allergy and heartburn, the report said that Rx-to-OTC switches are among the key drivers of OTC product adoption. Since 2001, 25 products have made the jump from prescription counter to the front end, including such categories as heartburn, contraceptives and weight loss.

“If medicines currently offered [as] OTC were only available as prescription, a significant portion of consumers would no longer seek those products,” the survey said. “Based on the survey results, this particular portion of the population is approximately 27 million consumers. The sales annually of OTC medicine to this segment of the population total approximately $4.8 billion.”

Ultimately, the report makes the case for a strong OTC marketplace that offers self-care solutions for consumers looking to save money on their health care, with an eye to the downstream savings that marketplace creates.

“The evidence is clear that OTC medicines help ease the tremendous burden on the healthcare system by empowering consumer self-care, thereby allowing overstretched healthcare practitioners to focus on the diagnosis and treatment of patients with more serious diseases and medical conditions,” Melville said.