A Price Comparison of RX-OTC Switched Drugs in the United Kingdom: The Impact of Indirect Price Controls (Research Proposal Sample)

A Price Comparison of RX-OTC Switched Drugs in the United Kingdom: The Impact of Indirect Price Controls
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Abstract
Switching medicines from prescription to non-prescription using various safety profiles enhances a timely access to medication to the consumers. Besides, reclassifying medicine also reduces the risk of under-treatment by strengthening self-management. However, the population is exposed to ruthless cartels that lead to variations in the prices of RX-OTC switched drugs. This paper seeks to examine the wholesale prices of drugs approved by the European Medicines Agency (EMA) in cities across the United Kingdom. The study will hence provide the price trends of the medicines in response to the RX-to-OTC switch. Besides, a difference-in-difference approach is used to examine the impact of indirect price controls in the OTC drugs in the UK before and after the reclassification.
KEYWORDS
RX-OTC, United Kingdom, difference-in-difference (DiD), MHRA, OTC
Introduction
The United Kingdom has had a policy supporting switching from prescription to non-prescription hence leading the world in the switch. However, Gauld et al. (2014) argue that evidence supporting the reclassification of medicines in the UK is still inconclusive. The government policy encourages self-care with an intention to improve consumer access and reduce the costs of funding the health sector. In reference to Rizzo, Ozminkowski and Goetzel (2005) drugs are switched for consumer empowerment and cost control. Opting for OTC medicine depicts a greater personal choice and self-administration as their use involves greater consumer autonomy.
Prescription only drugs are used for severe chronic conditions that need an initial diagnosis by a physician and subsequent monitoring. Mahecha (2006) argues that only prescription medications are associated with a potential for abuse, therapeutic index, and physiological monitoring. Non-prescription drugs are safe and efficient and reserved for acute, self-limited illnesses that are easily determined by the patient. Some of the traits of OTC drugs include their benefits that exceed their risks, low potential for misuse, can be used to treat self-diagnosed conditions, labelled adequately and health practitioners are not required for safe and effective drug use. Traditional uses of these medications are in the therapy of mild and moderate pain, common cold symptoms, hay fever, diarrhoea, constipation, gingivitis, haemorrhoids, acne and eczema.
The United Kingdom, for instance, has switched drugs to enhance self-treatment in urinary tract infections, hypercholesterolemia, bacterial conjunctivitis as well as prostatic hyperplasia. The great acceptance of OTC medications by people indicates the high prevalence of the conditions. Gilbert, Rao and Quintrell (2006) argue that although drugs such as aspirin have been accessible to the consumers for long, new medicines are particularly curated for prescription only. In this case, when reclassifying medicines to a non-prescription schedule by the authorities, they require criteria of low potential for abuse or misuse, little risk of harm, limited side effects, efficacy of the drug and the ability of the patient to manage the minor ailments.
Consumers who opt for OTC drugs recognize the symptoms, determine their condition, select an appropriate drug, read and understand the instructions besides evaluating the risks and benefits of using the drugs. The factors promoting shifting of medications to OTC or pharmacist-only include the need to empower the patients, to address the rise of consumerism, contain drug expenditure by the National Health System. The diminishing power of the medical profession and the drive by pharmacists to emphasize their mandate to the consumers have also triggered the drug shift in the United Kingdom. When the drug status is reclassified to OTC, there is the need to address issues such as the cost of healthcare, patient’s access to safe medicines and quality drugs. The section below states the problem, study objectives, hypotheses and rationale.
Problem Statement
Rx-to-OTC switches are acceptable and deemed to promote good health regarding addressing minor injuries or ailments. The availability of antibacterial drugs such as azithromycin, however, over-the-counter may encourage massive resistance in the organism. This question amongst others such as the impact of implementing price controls affect the health system stakeholders. Therefore, there is need for literature work to improve the understanding of indirect price controls in regulating the varying average wholesale prices (AWP).
Research Objectives
• To compare the average wholesale price (AWP) across cities in the United Kingdom after and before the Rx-to-OTC switch.
• To analyse the benefits and risks associated with OTC medication
• To examine the factors leading to reclassification of drugs in the United Kingdom
• To review the issues affecting OTC drug prices and the effect of imposing price controls.
Hypothesis
The last AWP for medicinal products in the UK was higher before the Rx-to-OTC compared to the price after the reclassification. Various factors are dictating the variations across the AWP of drugs hence policies calling for price regulation and controls may have contradicting effects.
Study Rationale
With the growing client base who can read and understand instructions on various medicines for self-treatment, there is the urge for the government to ensure that consumers are not misused by uncouth pharmaceutical cartels. This study is hence carried out across cities in the United Kingdom to give an analysis of the OTC drugs and some of the measures that can be used to address price variations.
Literature Review
Mahecha (2006) defines Rx-to-OTC switch as the transfer of prescription drugs to over-the-counter (OTC) status to treat the same indication with similar strength and duration of use. However, due to the absence of a physician, the signs and duration of use are narrower compared to prescription only drugs. Roussin et al. (2013) argue that despite the concerns such as suboptimal therapy, inappropriate use and inaccurate diagnosis, various countries have gone ahead to switch drugs without any reversals.
In reference to Gauld et al. (2014), policy makers and health professionals are required to understand the strain across health systems following the public outcry to receive better value for money. Switches thus widen the consumer’s access to medicines. The British drug plan involves the state support of research and development that allows drug companies to make profits on drug sales within the United Kingdom. Unlike the price controls deployed in France, the British government protects its citizens by capping the profit margin made by pharmaceutical companies. This strategy has assisted in funding innovation and meeting the need to safeguard clients from violent drug cartels.
Stomberg et al. (2013) report that OTC switches are an essential tool for improving the general health in drug classes where the population can manage themselves without the assistance of the physicians. In reference to Stomberg et al. (2013), despite OTC drugs being less expensive compared to prescription only drugs, they are not covered by any insurance. As a result, clients are forced to meet the out of pocket price that may be higher after conversion. Lifting the barrier to drug access over the counter can either increase drug utilization or not.
In reference to Bond (2008), the most fundamental force behind switches is the need to implement cost containment measures and transfer the cost of drug distribution to the consumers. The multiple economic analyses made on Rx-to-OTC switches shows the method saves the health system costs by shifting some of the expenses from the budget. Bond (2008) reports that the growth of the pharmacy profession has also seen the development of the pharmacy profession has triggered the increased trust to provide effective treatments to patients. The availability of over-the-counter drugs in a wide range presents the consumers with a chance to save time and costs. In reference to WSMI (2009), time-critical medications such as emergency hormonal contraception (EHC) require the reduced time interval between onset of symptoms and treatment. Such medications express better efficacy when administered to counter the clinical manifestations without any delay.
The benefits of switching drugs not only benefits the individual customer but the whole community as the reduction in the national healthcare costs supports a better allocation of the strained healthcare resources available. In this case, physicians pay attention to issues that are beyond self-care. The availability of OTC drugs also reduces the risks of adverse effects arising from barbaric practices such as self-medication using only prescription drugs. Ferner (2008) argues that enhanced access to self-medication harbours risks and dangers or improper use. Besides, self-diagnosis may end up addressing clinical manifestations alone and masking the underlying serious condition thus individual harm. In reference to Ferner (2008), appropriate strategies are hence required to tackle the potential risks arising from the increasing Rx-to-OTC switches. The public usually diminishes the potency of an OTC medicine thus the higher probability of drug misuse.
In reference to Gilbert et al. (2006), the study indicates the broad perception amongst the British population that the government would not allow substandard drugs to access the local market. As a result, the potential dangers of OTC drugs are ignored by the public in favour of their enormous benefits. Besides, the government also has legal provisions at hand to facilitate the reversal of an Rx-to-OTC switch decision....