According to GBI Research's recent report, “Rx-to-OTC switching lies at the heart of the growth in the OTC drugs market, which has been a key growth factor for many leading brands in the US and Europe.”
While the OTC market is competitive and fragmented, consolidation is expected to continue to increase as companies look to drive revenue through expanded OTC portfolios.
“Introducing the first OTC drug in a particular product category could considerably expand the market for that product category, rather than taking a share from prescription brands in that category,” according to GBI Research’s report.
Additionally, OTC switches are often a marketing strategy implemented by companies that have patents close to expiration.
However, the global OTC drug market has largely be driven by economic trends as well as an increasing interest in self-medication, which has been identified as a major contributor to market growth in recent years.
Making the switch
The first step in transferring a prescription drug to OTC status is an FDA application, which is reviewed under the administration’s new drug application (NDA) procedures.
The manufacturer’s application must show that the product has a wide margin of safety, and that consumers could use the product safely and effectively without a doctor’s intervention.
“Once data exclusivity has expired, prescription-to-nonprescription switches can be manufactured and sold under an abbreviated new drug application,” David Spangler, CHPA’s Senior Vice President, Policy, and General Counsel & Secretary tells Outsourcing-Pharma.com.
Under this new drug application, the contact manufacturer also needs to demonstrate the product is bioequivalent to the initial, national brand product.
In order to encourage the Rx-to-OTC switch, the law provides three additional years of data exclusivity if the switch application requires clinical studies essential to its approval. Thus, “providing the sponsor with an opportunity to recoup the investment in the studies necessary for the switch,” adds Spangler.
The challenges in making the switch typically involve two issues: self-selection and side effects.
“Can a consumer, after reading a product label, make a correct decision about whether or not the product is appropriate to use based on the indications and warnings? Second, are there side effects of the medicine that could be worsened or become more frequent in the absence of professional supervision?”
Spangler explains that the bottom line is to have a data-driven switch process.
“The question isn’t whether an indication or a category of medicine should or shouldn’t be switched; rather, the question is whether there are data to address the product-specific questions that would otherwise prevent a switch,” he adds.
Ultimately, it is the FDA’s job to examine the manufacturer’s data to make a benefit-risk decision on the application.
“Beyond basic efficacy data, potential benefits of a switch could include increased access to treatment options, improved quality of life, improved public health, enhanced consumer awareness and involvement, or greater worker productivity.”