Finding ways to improve access to pharmaceuticals has received much attention from policy makers and researchers, with significant effort being devoted toward examining how financial barriers such as insurance status and cost-sharing affect access, health, and medical costs (for a review, see Goldman, Joyce, and Zheng 2007
). However, besides financial barriers, patients must contend with other obstacles to access, such as regulatory barriers. For example, in the United States, the vast majority of drugs are available only with a physician's prescription. By contrast, patients may freely purchase over-the-counter (OTC) drugs from many outlets such as pharmacies and grocery stores.
The requirement for a physician's prescription has many potential benefits. Fundamentally, it places their use under the supervision of a physician, which may prevent misuse of prescription drugs and reduce the potential for adverse events. Indeed, the notion that many drugs cannot be used safely in the absence of physician supervision is why many countries require prescriptions to begin with. However, a prescription also imposes additional time and monetary costs on the patient, such as the direct costs of an office visit as well as transportation costs, which may reduce access to potentially beneficial therapies. As a result, many countries have implemented a third category, called behind-the-counter (BTC) drugs. Like their OTC counterparts, BTC drugs can be purchased in pharmacies without a physician's prescription. However, unlike OTC drugs, these drugs are not freely available on the pharmacy's shelves. Rather, a patient can only obtain the drug upon consultation with a pharmacist. Thus, in theory, placing a drug on BTC status allows for freer access while ensuring supervision over its use from a health care professional.1
By eliminating the time and expense of acquiring a physician's prescription, moving a prescription drug to BTC status could improve patient health by increasing access to beneficial therapies, particularly to the degree that pharmacists can provide adequate supervision and monitoring. And indeed, given their extensive training in management of drug therapy, there is good reason to believe that pharmacists can provide adequate supervision. Several observational studies and randomized clinical trials document that pharmacists can play an important role in medication management, especially for chronic conditions such as hyperlipidemia (high cholesterol and triglycerides), hypertension, and diabetes (Tsuyuki, Johnson, and Teo 2002
; Cranor, Bunting, and Christensen 2003
; McConnell et al. 2006
). For example, a randomized controlled trial found that increased supervision by community pharmacists can significantly improve cholesterol management in patients with high risk of cardiovascular disease (Tsuyuki, Johnson, and Teo 2002
Similarly, the economic effects of switching a drug to BTC are complex. As discussed earlier, BTC status will likely increase utilization and drug expenditures by removing the time and expense of receiving a prescription. These demand effects would likely be more pronounced for consumers who have easy access to grocery stores and other retail outlets that sell BTC products but not prescription drugs. However, BTC status might prompt insurers to drop coverage or increase co-pays for these drugs, in part because they might find it difficult to control utilization of drugs that are available without a prescription. Therefore, while BTC drugs may reduce expenditures for insurers, they have the potential to reduce access by increasing the prices patients pay. For example, when loratidine switched from prescription-only to OTC status, insurers chose not to cover the drug and as a consequence patients paid more for the drug, because its OTC price was higher than their co-payments for the drug (Freudenheim 2003
). However, after a few years due to increased market competition from generics, the price of loratidine fell to the extent that it was lower than the copayment insured patients would have paid for the drug (Sullivan 2005
). Finally, in addition to changes in prices for consumers, BTC status might also influence the level and type of marketing, consequently affecting utilization of drugs. In summary, it is difficult to predict a priori how BTC drugs would affect utilization, expenditures, and patient health. The scant literature to date uses a pre- to post-BTC introduction design and finds little effect of BTC status on utilization in the case of H2
receptor antagonists (Furler et al. 2002
) and proton pump inhibitors (Dhippayom and Walker 2006
On May 12, 2004, the United Kingdom allowed the BTC purchase of low dose (10 mg) simvastatin (Nash and Nash 2004
) for patients at moderate risk for coronary heart disease, for whom prescription strength statins were not indicated. The introduction of BTC simvastatin in the United Kingdom is particularly interesting for several reasons. First, statins are a widely used class of drug with important clinical benefits (Kapur and Musunuru 2008
). Second, the introduction of BTC simvastatin was not without controversy, with an editorial in The Lancet
criticizing the policy on clinical grounds and arguing that the introduction of BTC simvastatin was mainly done in order to shift costs from public payers to patients (“OTC Statins...” 2004
). Finally, the United Kingdom became the first country to introduce BTC simvastatin, which is notable given that prior efforts to introduce OTC versions of low-dose pravastatin and lovastatin in the United States failed secondary to the FDA's concerns about the efficacy and safety of these drugs in an OTC setting.
In this article, we provide a first step toward examining the welfare effects of BTC simvastatin by examining how its introduction affected sales, prices, and utilization. Our analysis builds on prior work by Filion et al. (2007
), who find the utilization of prescription statins fell following the introduction of BTC simvastatin. However, the authors focus only on prescriptions
for statins and do not address the issue of whether increases in the utilization of BTC statins outweighed any drop in prescriptions. We consider the effect of BTC simvastatin on total utilization of prescription and nonprescription statins, as well as additional outcomes, such as expenditures and price. Moreover, the analysis by Filion et al. (2007
) is primarily a comparison of outcomes before and after the switch and is potentially vulnerable to bias from unobserved factors that might affect statin utilization. By contrast, we use a difference-in-differences (DD) approach, utilizing the sales experience of simvastatin in countries where the drug remained prescription only, to control for these unobserved factors. In addition, we utilize additional controls for other market factors, such as the introduction of generics. Our results suggest that the introduction of BTC significantly increased utilization reduced drug expenditures. At a first glance, then, our results suggest that the introduction of BTC simvastatin was successful in both increasing access and lowering expenditures.
This article is outlined as follows. The next section presents our data and methods, and the following section presents the results. We conclude with a discussion of results.