Value of Consumer Health Products The Impact of Switching Prescription Medications to Over-the-Counter

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1 Value of Consumer Health Products The Impact of Switching Prescription Medications to Over-the-Counter Isabelle Gagnon-Arpin Senior Researcher Health Economics and Policy The Conference Board of Canada April 27, 2017 conferenceboard.ca

2 Context Self-treatment using over-the-counter (OTC) medications is a common and effective method for treating minor conditions. Advantages of OTC vs prescription medications: Increased convenience; Lower cost; Promotes patient autonomy. Switching prescription medications to over-the-counter (Rx to OTC) has an impact on a wide range of stakeholders, and can contribute to health system sustainability. Switching in Canada generally lags the U.S., U.K. and Australia by six to seven years. 2

3 Aims of the Research The purpose of this project is to examine the value of OTC medications through three linked studies focusing on: 1. A high-level understanding of current status, benefits, and challenges of switching (Rx-to-OTC) in Canada (unpublished); 2. Modelling the economic impact of switching three drug categories from Rx-to-OTC; and 3. Discuss barriers of Rx-to-OTC switching in Canada and recommendations to close the gap with other advanced healthcare systems. 3

4 Modelling the Economic Impact of Switching The aim of this project is to better understand the potential value of switching three specific drug categories from Rx-to-OTC: 1) proton pump inhibitors (PPIs) to treat gastroesophageal reflux disease (GERD); 2) oral contraceptives (OCs); 3) drugs for erectile dysfunction (ED). Modelled impacts: Efficiency and productivity gains from avoided primary care visits; Changes in the cost burden of paying for medicines (public, private, individuals). 4

5 Methodology Conceptual Model Modelling the Economic Impact of Rx-to-OTC Switching 5

6 Results Overall, the annual economic value of switching is estimated at $1 billion in savings: $709.9 million for proton pump inhibitors to treat gastroesophageal reflux disease (GERD); $222.2 million for oral contraceptives; and $106.2 million for erectile dysfunction drugs. The greatest savings would stem from: Lower drug costs: $458.4 million Reduced physician visits: $290.2 million Increased economic productivity: $289.8 million 6

7 Results PPIs to treat GERD Overall, the economic value of switching PPIs to treat GERD is estimated at $709.9 million over one year: Governments: $382.4 million Employers (productivity): $239.1 million Private drug plan sponsors: $169.8 million Individuals: additional costs of $81.4 million The majority of savings are from lower drug costs, followed by increased efficiency and productivity gains from reduced physician visits, and faster access to treatment. 7

8 Results PPIs to treat GERD Incremental Impact of Switching Per 1,000 Population (2014) Canadian Provinces Avoided Primary Care Visits/ 1,000 Population (number) Economic Value of Avoided Primary Care Visits/1,000 Population (C$) NL 230 $ 8,009 NS 232 $ 8,188 NB 226 $ 9,973 MB 116 $ 4,891 SK 126 $ 5,228 AB 114 $ 6,617 BC 98 $ 3,918 ON 127 $ 4,886 QC 101 $ 5,016 PEI 184 $ 6,480 Total 122 $ 5,233 8

9 Results Oral Contraceptives Overall, the economic value of switching OCs is estimated at $222.2 million over one year: Private drug plan sponsors: $145.4 million Governments: $100.1 million Employers (productivity): $31.0 million Individuals: additional costs of $54.3 million The majority of savings are from lower drug costs, followed by increased efficiency and productivity gains from reduced physician visits. 9

10 Results Oral Contraceptives Incremental Impact of Switching Per 1,000 Females (2014) Canadian Provinces Avoided Primary Care Visits/ 1,000 Females (number) Economic Value of Avoided Primary Care Visits/1,000 Females (C$) NL 100 $ 3,479 NS 100 $ 3,525 NB 97 $ 4,300 MB 70 $ 2,969 SK 87 $ 3,606 AB 84 $ 4,881 BC 63 $ 2,537 ON 67 $ 2,585 QC 121 $ 6,030 PEI 98 $ 3,451 Total 84 $ 3,748 10

11 Results ED Drugs Overall, the economic value of switching ED drugs is estimated at $106.2 million over one year: Employers (productivity): $45.1 million Governments: $41.4 million Private drug plan sponsors: $19.8 million Individuals: savings for uninsured and additional costs for insured equals $0 The majority of savings are from increased efficiency and productivity gains from reduced physician visits, followed by lower drug costs. 11

12 Results ED Drugs Incremental Impact of Switching Per 1,000 Males (2014) Canadian Provinces Avoided Primary Care Visits/ 1,000 Males (number) Economic Value of Avoided Primary Care Visits/1,000 Males (C$) NL 63 $ 2,137 NS 57 $ 1,917 NB 46 $ 2,006 MB 43 $ 1,784 SK 43 $ 1,808 AB 51 $ 3,077 BC 55 $ 2,172 ON 50 $ 1,835 QC 41 $ 2,029 PEI 52 $ 1,756 Total 48 $ 2,065 12

13 Key Messages Significant direct cost savings could be had for public health care systems in the form of efficiency gains from avoided primary care visits - Important in the context of the Triple Aim in health care. Switches lessen financial access barriers for individuals poorer or no drug coverage, and who are also more likely to be of lower socioeconomic status. However insured individuals would incur additional costs if they choose the OTC option. Switching medications also comes with potential risks (ie. misdiagnosis, misuse, adverse events), although Health Canada criteria for switching aims to minimize those risks. Although presented from the optic of a single year of savings/additional costs, the 6-7 year lag in switching in Canada points to much higher cumulative costs. The use of conservative assumptions is likely underestimating the true economic potential of switching the three medication categories. 13

14 Next Steps Second report due later this spring - focus on important barriers of Rx-to-OTC switching in Canada and recommendations to close the gap with other advanced healthcare systems. Reducing red tape surrounding Rx-to-OTC switch, without changing switch criteria or rigour of Health Canada review Address fed/prov regulatory overlap and duplication; Adapt process to remove disincentive to innovators. 14

15 conferenceboard.ca

Value of Consumer Health Products: The Impact of Switching Prescription Medications to Over-the-Counter

Value of Consumer Health Products: The Impact of Switching Prescription Medications to Over-the-Counter Citation Author: Gagnon-Arpin, Isabelle. Value of Consumer Health Products: The Impact of Switching