The past year has brought much change, perhaps most evident in the recent national and local elections. As we welcome a new American president and Congress, the country is waiting to see how the regulatory and legislative landscape will evolve. But I am certain that one thing will not change: the continued importance of over-the-counter medications in public health, and the vital role that chain drug stores play.
More than ever, Americans rely on OTC medications to help care for themselves and for their families, with more than 100,000 OTC products on the shelves in over 750,000 retail outlets around the country. For many people, the cost of their health care coverage continues to climb as they are being asked to shoulder more of the burden with high-deductible health plans and other payment models. OTC medications provide safe and effective care at a low cost. OTCs are the trusted first line of defense — not just for patients, but also for physicians, who increasingly turn to OTCs first in their modern stepwise approach to patient care.
All of the stakeholders in the OTC industry — consumers, suppliers, manufacturers and retailers — want the self-care trend to keep growing, and we want the supply of safe and effective products to keep expanding. There are unique opportunities in 2017 to support and foster growth, and there are compelling threats as well. But, when we work together as a united industry with consumers at the center, I am confident we can bring the change we all want.
O-T-C monograph reform
In 1972, the Food and Drug Administration established the OTC Monograph System as the regulatory framework covering most O-T-C medicines. Since that time, this system has supported the introduction of tens of thousands of OTC products for consumers. But 40 years is a long time in a fast-moving industry, and now we need to modernize the system — and FDA agrees. An outdated regulatory system will hold everyone back, but a modern system will inspire innovation, assure trust that the system works as it should, enhance transparency and predictability, and ensure that your customers will have more OTC choices in the years ahead.
In 2016, CHPA’s leadership brought monograph modernization to the forefront and created momentum for reform. Now we’re leading the effort to create an enhanced environment for long-term industry growth. Manufacturers have aligned around key reform principles, and CHPA has engaged FDA, members of Congress, and industry in a series of meetings to outline a clear and mutually beneficial reform package. Altogether, we believe this reform can be accomplished in 2017. And perhaps more importantly, it will ensure continued consumer confidence in OTCs and empower more self-care in the U.S. and globally.
Restoring OTCs to FSAs, HSAs
Flexible spending arrangements (FSAs), health savings accounts (HSAs), and other tax- preferred accounts are valuable programs allowing consumers to save money by setting aside pretax dollars to pay for health-related expenses. Until 2011, your customers had been able to use these accounts to pay for OTC medicines for self-care, which saves them, and society, $102 billion annually through avoided doctor visits, increased work productivity and other cost advantages.
Unfortunately, a provision in the Affordable Care Act removed OTC medicines medicine eligibility from these tax-preferred accounts, unless purchased with a doctor’s prescription — an unnecessary burden on consumers and health care professionals. Since then, CHPA has supported legislation in Congress to reinstate and restore OTC medicines eligibility, a commonsense approach to ACA reform.
CHPA led this effort through 2015 and 2016 and, despite a highly partisan environment in Congress, we secured introduction of bipartisan, bicameral legislation: The Restoring Access to Medication Act. With repeal and reform of the ACA a top priority of the Trump administration, the next year may be the year that consumers are able to one again use their FSA/HSA accounts to purchase OTC medicines medicines.
Access to PSE
We believe that consumers deserve to have reliable and unfettered access to the best available OTC medicines medicines, including cold and allergy medicines containing pseudoephedrine (PSE). Despite the ongoing efforts by some criminals to divert PSE into methamphetamine for illicit use, CHPA and our retail partners across the county have continued to successfully block illegal PSE purchases right at the point of sale through the industry-supported National Precursor Log Exchange (NPLEx) network, now adopted by 33 states and used by several major pharmacy chains nationwide.
This system, funded by CHPA members, preserves consumer choice and gives law enforcement a tool to identify potential criminal activity. Your efforts to support and use NPLEx at the point of sale have helped reduce meth lab seizures in nearly every state and ensure that law-abiding consumers still have OTC medicines access to these popular and important health care products.
But some lawmakers in a few states continue to push for PSE “prescription only” laws and other measures that create barriers for consumers. CHPA continues to provide concrete, effective solutions to ensure that law-abiding consumers keep their access to these medicines without needing a prescription. In 2017 we hope to expand the NPLEx network and work with retailers, pharmacies, universities, law enforcement and others on NPLEx trainings, anti-smurfing education, public awareness and more.
Drug take-back programs
In 2016, we saw continued expansion of unnecessary and costly local mandates requiring manufacturers to fund and operate drug take-back programs, and we expect this issue to proliferate in 2017.
In California, various city and county ordinances have begun to require drug manufacturers to create, finance and manage systems for collecting and disposing of expired, unused or unwanted medications. Sometimes retailers are in the scope of these ordinances, too, compelling us all to play a role.
And it’s not cheap. For example, the budget for running nine mandated take-back programs in California is $11 million per year, and one other jurisdiction contemplating a mandate alone has an estimate as high as $20 million per year. These various ordinances create confusion, have environmental impacts and could potentially add costs to medicines.
For consumers, convenience is key. Forcing industry to only fund or promote take-back via inconvenient weekend drive-through events or at intimidating and distant locations (such as police departments and sheriff offices) is not a consumer-centered solution, and consumer behavior proves it. For example, only 15% of Los Angeles County residents regularly take their medications to a collection event, and only 11% regularly take them to a law enforcement facility. But 30% already regularly dispose in their household trash.
In-home disposal is supported by the three federal agencies that have the most interest in proper disposal: FDA, the Environmental Protection Agency, and the Drug Enforcement Administration. All three recognize that this method is safe for the environment, is convenient for consumers and prevents intentional or unintentional drug diversion.
Education about proper disposal and promotion of voluntary take-back programs is the best approach. CHPA is working with industry associations (Pharmaceutical Research and Manufacturers of America, Generic Pharmaceutical Association, Biotechnology Industry Organization, AdvaMed), retailers, pharmacists, distributors and others to educate consumers and lawmakers about proper in-home disposal and the many existing voluntary disposal and take-back options. Plus, we’re fighting to prevent more mandates from taking hold. Proper medication disposal is a shared responsibility among consumers, communities and industry, not the sole responsibility of manufacturers and retailers.
For 136 years, CHPA has taken a leadership role in promoting self-care and advocating for policies that lead to industrywide growth for the entire supply chain. In the year ahead, CHPA will continue to focus on these issues, and it is more important than ever for manufacturers and retailers to work together to support consumer-centered policies and fight initiatives that limit consumer access and choice.
In fact, in 2017, CHPA’s Retail Liaison Committee will be developing a communication tool for retail partners to help keep you informed about issues and trends impacting the consumer health care industry. If you are interested in learning more, please email [email protected].
Maximizing opportunities and addressing threats requires a coordinated industry approach. Retailers, pharmacists, distributors and other stakeholders must continue to work together to ensure OTC medicines medications remain available, affordable and safe.
Scott Melville is president and chief executive officer of the Consumer Healthcare Products Association (CHPA).