OTCs: Weighing whether benefit design or formulary tier is mosteffective

June 1, 2006

The blockbuster drugs of the 1990s came off patent, became generic,and now several of them have become available over-the-counter(OTC). Others are expected to join the ranks in the next few years.This shift, combined with the increasing focus on electronicmedical records (EMRs) for longitudinal patient medication profilesand continuing pressure on the healthcare industry to take costsout of the system, drives the following questions for health plans,employer groups and pharmacy benefit managers (PBMs): Should OTCdrugs be covered by a pharmacy plan? Is benefit design sufficientfor covering OTCs and monitoring therapeutic compliance? Shouldpharmacy and therapeutic (P&T) committees modify theirformularies to be OTC-aware, or should they actually include OTCson the formulary? If a plan does incorporate OTCs into theformulary, what are the criteria for inclusion or exclusion?