The Big 3
There are three issues involving over-the-counter medicines today that have put the industry on the defensive, and all involve the question of appropriate access. Drug Store News examined each.
1. FLEXIBLE SPENDING ACCOUNTS
The issue: The Patient Protection and Affordable Care Act required that FSA participants obtain a prescription for those OTCs incorporated into their health savings agenda.
CHPA’s solution: Reverse the rule — it’s likely to cost much more than it will save (see above).
The issue: The maligned decongestant is a key ingredient in the illicit manufacture of methamphetamine. Several states are considering making PSE available by prescription only to help in their war on drugs.
CHPA’s solution: The National Precursor Log Exchange, a multistate tool, wholly funded by the industry, that helps identify methamphetamine-producing criminals while maintaining access for consumers.
According to state government review in Kentucky, at least 97.8% of all PSE sales in the state are made for legitimate use. Rx-only PSE only drives the illegal meth business further underground, where it can’t be tracked as readily by law enforcement.
The issue: Consuming obscene amounts of DXM has become infamous as a cheap and easy “high,” and is highly popular among teenagers predisposed to abusing drugs.
CHPA’s solution: Education and sales restrictions. The CHPA has coordinated with the Partnership for a Drug-Free America (StopMedicineAbuse.org) on a comprehensive awareness initiative to educate parents, teachers and law enforcement on how to recognize and prevent potential teen abuse of cough medicines. The site is promoted on most cold medicine packages. The CHPA also advocates for legislation that would ban DXM sales to minors, as well as legislation to restrict access to unfinished, bulk dextromethorphan.
Statistically, 1.8% of teens between the ages of 12 years and 17 years abuse DXM. And while that number may be too high, teens who report “learning a lot” at home about drugs are 50% less likely to abuse drugs.
The Consumer Healthcare Products Association may not be painting pink Pepto-Bismol mustaches on a group of Hollywood celebrities and professional athletes as part of the new campaign it plans to fully unveil in June, but the goal is more or less the same as the “Got Milk?” ads.
“Got milk?” has become ubiquitous. There is 100% clarity of message. The milk mustache says it all: Milk is an essential food and an integral part of a healthy diet; it HAS TO BE in your refrigerator, on your breakfast table and in your lunch box.
That’s the way CHPA leaders want lawmakers and policy advisers to think of over-the-counter medicines: as an essential component of American health care. OTCs must be an essential part of any plan to fortify the American healthcare system. “OTC products are affordable, accessible, empowering and entrusted,” said Scott Melville, CHPA president and CEO. “As we look to increase access to health care and reduce costs, OTC products are ideally positioned to meet those needs.”
The CHPA’s new “Your Health at Hand” advocacy campaign also will mark the first major initiative under the organization’s new leadership. It provides an important glimpse into the vision of CHPA’s new chief executive, and perhaps a bit of insight as to how the Melville years will differ from the Linda Suydam years. Suydam is a doctor; Melville is a lawyer and a policy expert.
Suydam, the former Food and Drug Administration official who retired at the end of 2010 after eight years at CHPA’s helm, was brought in to help OTC and dietary supplement manufacturers better navigate what had become a more complex regulatory environment.
Melville came to the CHPA with more than two decades of regulatory and association management experience, most recently as SVP government affairs and general counsel for the Healthcare Distribution and Management Association, and prior to that served as an attorney and head of government relations for Cephalon. He is a veteran facilitator familiar with health care, and a one-time staffer for Rep. Jerry Lewis, R-Calif. At his side is CHPA chairman Paul Sturman, a veteran of the OTC industry and head of Pfizer’s massive $2.7 billion consumer healthcare business unit.
The two come along at a critical time in the history of the OTC industry and America, as our nation wrestles with the challenge of reforming health care.
In a wide-ranging interview with Drug Store News, the new CHPA chief talked about switching from defense to offense. “We believe the OTC class of drugs has been taken for granted … and the contribution that the class makes underappreciated,” Melville told DSN. The CHPA wants to influence the context in which OTC medicines are thought of — evolving from the ingredient issues and the misuse of OTCs that characterize the industry today to the value proposition self-care brings to overall health care.
“There is tremendous opportunity for [the CHPA] to step up its level of engagement,” noted Sturman, president and general manager for Pfizer Consumer Healthcare. “The two [taglines] are ‘access’ and ‘lower cost.’ [The OTC industry] has always been about cost-effectively and safely treating certain conditions. … For consumers, it’s [about] accessing effective treatments and empowering consumers to take care of their own health.”
But “Your Health at Hand” will not be aimed at consumers; it’s intended to target Beltway insiders. “We’re touting our worth, not to the consumers who already know and understand our value, but to the [influential people] who set policy, shape the debate and affect the greater healthcare dialogue,” Melville told CHPA members at the association’s annual meeting last month.
While final details of the new campaign were not available at press time, it is expected that it will mirror, at least in spirit, the National Association of Chain Drug Stores’ “Pharmacies, the face of neighborhood health care” ads, which the NACDS recently reintroduced in a bid to educate new lawmakers on the value community pharmacy delivers to the country. Just as the NACDS campaign does for community pharmacy, “Your Health At Hand” will look to quantify the value of OTC medicines in real numbers and actual dollars and cents. The CHPA campaign will focus on what Melville sees as the four pillars of OTC medicine: affordability, accessibility, empowerment and trust.
Clearly, access and affordability strike right at the heart of many of the CHPA’s most critical issues, including the recent change in the tax code that ended flexible spending account eligibility for OTC purchases under FSA plans without a doctor’s prescription.
“The first impact most Americans [noticed from] healthcare reform was the letter they got from their FSA provider at the end of last year telling them that OTCs would no longer be covered,” Melville told DSN. “We know that about 20 million households have FSAs, and that [more than] half of them use their FSAs to purchase OTC products — we’re talking about 10 million households that were relying on it. We believe that’s contrary to the goals of healthcare reform, which were to expand access and [reduce] costs.”
The real impact will be quite the opposite, Melville said, including a sharp rise in the number of physician visits and a real increase in consumers’ out-of-pocket healthcare costs. By CHPA estimates, of the approximate 10 million households that used FSA dollars to purchase an OTC product in 2010, about 37% plan to seek a prescription under the new rules. What could that cost? According to data from the Foundation for HealthSmart Consumers, if just 10% of consumers opted to see their doctor for an OTC prescription, total healthcare spending would increase $4.5 billion in year one.
Melville told DSN he is encouraged by new legislation introduced in February in the U.S. House of Representatives and Senate that would reverse the FSA ruling.
But the FSA issue really is kind of a microcosm of the much bigger challenge Melville faces, and the overarching mission of the CHPA’s new “Your Health at Hand” campaign; it’s really about changing the way America thinks about OTC medicine. “We think perhaps a reason that this provision was in the healthcare-reform bill in the first place was that perhaps they weren’t viewed that way — that they were viewed as somehow not as significant as prescription medicines,” Melville said. “OTCs are real medicines for treating real conditions and should be treated just like prescription medicines from a tax code, tax deductibility [and] FSA perspective,” he said.
P&G, Teva enter partnership
CINCINNATI — Procter & Gamble and Teva Pharmaceutical Industries will bring their over-the-counter product lines and capabilities together in a deal they expect to be completed this fall.
P&G and Teva announced Thursday a new partnership that will combine P&G’s brand building, innovation and marketing capabilities with Teva’s geographic reach, research and development capabilities, regulatory and manufacturing experience and product portfolio. The partnership will include a joint venture combining Teva’s and P&G’s OTC businesses in all markets outside North America — markets that generated sales of more than $1 billion last year.
Both companies stand to benefit considerably, with Teva seeing an expansion to its OTC product offerings and to its position with major pharmacy customers worldwide, and P&G seeing accelerated expansion of such iconic brands as Vicks, Metamucil and Pepto-Bismol. The companies also hope to take advantage of Rx-to-OTC switches and market the resulting products in markets around the world, including North America.
“This unique partnership positions P&G and Teva to be a leading player in the consumer healthcare industry,” P&G chairman, president and CEO Bob McDonald said. “This is a remarkable opportunity to accelerate growth for both companies’ OTC businesses. Together, we will serve more consumers in more parts of the world more completely by increasing access to high-quality, affordable over-the-counter medicines.”
Teva, based in Jerusalem, currently is the world’s largest manufacturer of generic drugs, and is one of the world’s largest drug makers overall. “We are extremely pleased to be joining forces with Procter & Gamble, the world leader in brand building and innovative go-to-market capabilities,” Teva president and CEO Shlomo Yanai said. “This partnership will create value by immediately expanding the number of channels and geographies in which each company’s OTC products will be sold. Together, we will develop a new platform with the potential to reshape the entire global OTC market.”