Foundation for HealthSmart Consumers: New OTC reimbursement rule will be costly
WASHINGTON A panel of healthcare thought leaders has concluded that a recent IRS rule change requiring a written prescription so that over-the-counter medicines can be eligible for reimbursement under flexible spending accounts will demand retail system challenges that are operationally impossible to overcome in the time frame required.
“We see this as a threat to consumer access and choice at a time when we need our citizens to be more engaged in managing their health and the cost of care,” stated Jon Comola, executive director of the Foundation for HealthSmart Consumers. Because of the new rule change, Comola said, “some consumers are likely to seek prescriptions for OTCs or alternative [prescription] drugs in order to comply with the new tax requirement.”
According to Foundation researchers, the resulting costs could reach $2.5 billion annually if office visits and lab tests are incurred by even 10% of the insured population; potential new pharmacy costs could reach $3 billion annually.
“We are concerned about the negative impact on people who are using OTCs to address health issues like smoking cessation, weight control, arthritis and allergies because of the increased tax on higher cost products,” said Jim Parker, fellow for The Foundation. “This may result in increased physician visits and potentially the prescribing of more expensive prescription drugs.”
The number of consumers who take advantage of health spending accounts is not insignificant, the Foundation added. “More than 50 million of the 195 million commercially insured consumers have healthcare accounts and will be directly affected by this new rule,” noted Roy Ramthun, president HSA Consulting.
As of Jan. 1, consumers will no longer be able to pay for most OTC medicines with funds from their flexible spending accounts and other health accounts (including HSAs and HRAs) unless the OTCs are “prescribed.” Retailers already are taking steps to warn shoppers of the new restrictions on purchases of OTC medicines using funds from their healthcare accounts.
This rule change, enacted as part of the Patient Protection and Affordable Care Act, is intended to help fund increases in healthcare spending in other parts of the bill.
Warner Chilcott’s Atelvia receives FDA approval
ARDEE, Ireland The Food and Drug Administration has approved a new formulation of a drug for osteoporosis made by Warner Chilcott, the drug maker said Monday.
Warner Chilcott announced the approval of Atelvia (risendronate sodium), a treatment for postmenopausal osteoporosis, which it plans to launch early next year. The drug is a delayed-release formulation of Actonel.
“The approval of Atelvia represents an exciting addition to the Actonel franchise, as well as our women’s healthcare product portfolio,” Warner Chilcott president and CEO Roger Boissonneault said. “We believe the dosing convenience of Atelvia sets it apart from other treatment options for osteoporosis patients, and provides an opportunity to regain market share in the United States in this segment.”
Tylenol gets ‘precise’
NEW YORK McNeil Consumer Healthcare recently parlayed its Tylenol brand franchise into external analgesics.
Labeled Tylenol Precise, McNeil introduced two SKUs into the external analgesic space — a patch and a cream. The air-activated heat therapy will go up against Pfizer Consumer’s Thermacare, which is experiencing a resurgence in sales under its relatively new stewardship (Wyeth Consumer, now part of Pfizer, had purchased the rights to Thermacare from Procter & Gamble two years ago).
Both the Tylenol Precise cream and Tylenol Precise patch retail for around $7.99.