Switching Commonly Used Prescription Medicines to Over-The-Counter Could Save Billions

By Petrina Smith
Tuesday, 25 March, 2014

The rescheduling of the most commonly used prescription medicines to over-the-counter (OTC) status could save the Australian healthcare system approximately $2.1 billion a year, according to a new study by the Macquarie University Centre for the Health Economy, commissioned by the Australian Self Medication Industry (ASMI).

The study found that the rescheduling or ‘switching’ from prescription (Rx) to Pharmacist Only could achieve savings of $1.1 billion through some 17 million avoided GP visits, and a further $1 billion in productivity savings.

Executive Director of ASMI, Dr Deon Schoombie, said the study shows there is potential for considerable savings

to governments and the community through a sensible approach to the scheduling of medicines. “Unfortunately, the process of switching medicines from prescription to non-prescription has all but stalled in Australia and this is impacting health outcomes, healthcare costs and is stifling innovation in the sector,” Dr Schoombie said.

The study examined the economic and budgetary impacts of switching 11 categories of common Rx medicines used

in areas including flu prevention, migraine, cholesterol lowering and heartburn.

Dr Schoombie said that most of the medicines in the study have a long history of relatively safe use and many have

already been switched to non-prescription in similar markets overseas such as the UK, US, Sweden, Germany,

Canada and New Zealand.

“If government wants to achieve a more sustainable health budget, there are an estimated $2 billion in savings that

would flow from increased consumer access to medicines with a long history of safe use,” he said.

The study, also sought to place a value on the current economic contribution of the OTC sector to the broader health economy. It found that each dollar spent on eight categories of the most common OTC medicines saves the healthcare system more than four dollars.

Overall, the availability of OTC medicines produces savings of approximately $10.4 billion, made up of $3.8 billion in

direct costs associated with visits to general practitioners (GPs), as well as $6.5 billion in indirect savings associated

with lost productivity.

If OTC medicines were not available, there would be an estimated 58 million additional GP visits for people to obtain

their medication.

Professor Mark Gabbott, Executive Dean, Faculty of Business and Economics, Macquarie University said the study

provides the first evidence of the contribution that the OTC medicines sector makes to Australian society and the


“The study shows that the OTC medicines sector in Australia is valued at about $4 billion and employs approximately

18,000 people. It undertakes local manufacturing worth $2.1 billion, ships exports worth $1.2 billion and produces

some 17,000 registered and listed therapeutic products,” said Professor Gabbott

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