Zyrtec to Go OTC

By now, everyone should be familiar with Claritin (loratadine) and Prilosec going OTC.  They were really the first two blockbuster drugs to go OTC (over-the-counter).  Motrin / Advil is available both as a prescription strength and OTC.  Zantac (ranitidine) is also available OTC.

From a personal perspective, I am happy.  I have two kids with allergies that are on Zyrtec (which is off formulary) and where I pay $50 / month per kid.  I also find this an interesting DTC (direct-to-consumer) challenge for managed care plans and PBMs.  I had the opportunity to run both of our programs (Claritin and Prilosec OTC) at Express Scripts for this which included coordinating with modeling and clinical teams, designing the communication strategy, talking with clients, and helping drive OTC utilization where clinically appropriate.

From some initial research, I found the following:

  • Zyrtec (5 and 10mg tablets and 5 and 10mg chewables) and Zyrtec-D (1mg syrup and extended release) were approved by the FDA to go OTC. (article)
  • McNeil Consumer Healthcare (subsidiary of J&J) will be responsible for the OTC products.
  • McNeil has said the products will be available in late January 2008 and will be less than 1/3 the price of the prescription.
  • Non-Sedating Antihistamines (NSAs) represent 7.8% of the commercial Rx market and Zyrtec had about 37% marketshare in 2006 (generics had greater than 50%) with a typical member using 3.65 Rxs per year (or 0.29 Rxs PMPY).  (per Express Scripts Drug Trend Report)

Taking common Rxs to OTC status makes a lot of sense, but also creates a lot of questions:

  • If there are interactions with the drug but it no longer shows up as a claim, does this create a DUR (drug utilization review) problem?
  • Do pharmacies make more money on the generic Allegra or on the OTC?
  • For PBMs that make spread on claims and/or get a claims administration fee, how do they align their incentives with their clients (employers, managed care) that would prefer to see the patient use the OTC?
  • Which costs less out-of-pocket…the generic Rx or the OTC?

So, what should you do?   If you’re a consumer, you will likely hear something from your employer, managed care company, PBM, or pharmacy.  If your a company, you need a creative plan to execute against.  Contact me to learn more about how we (Silverlink) are going to help our clients.  [I can’t give away all the secret sauce here.]

But, if you are generally interested in this topic, here are a few links for you:

One Response to “Zyrtec to Go OTC”

  1. The Zyrtec Rx-OTC switch will be a significant cost saver. Most standard Rx plans which do not exclude Zyrtec will find it in the top 10 brand drugs by ingredient cost. Smart plans, with the help of smart consultants and partners, will embrace Zyrtec OTC as a viable plan design option.

    While Zyrtec OTC is big, I think Prevacid OTC (http://www.takeda.com/press/article_24066.html) will be much bigger. Takeda published the press release in late 2005 to very little press coverage. The initial agreement put the conversion sometime in 2009, but I have heard a few inside rumors that Prevacid OTC will launch mid-2008.

    Big news for the largest/second largest (depending on the rated metric) therapy class.

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