New study finds ‘switching’ from prescription to over-the-counter (OTC) could save the health economy $2.1 billion OTC’s current contribution to health system worth $10 billion

25 March 2014

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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.

The study, which was commissioned by the Australian Self Medication Industry (ASMI), 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.

The 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, undertaken by the Macquarie University Centre for the Health Economy, 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 $10.4billion, 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 economy.
"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.
Read the Macquarie University study.
Industry Snapshot
Infographic with key statistics from the study

About ASMI: The Australian Self-Medication Industry (ASMI) is the peak body representing sponsors of non-prescription medicines - over-the-counter (OTC) and complementary medicines. Its members make up 85 per cent of the $4bn self care market. Membership totals 60 companies and ASMI members employ approximately 17,000 people with exports estimated at $600 million annually. ASMI's mission is to promote better health through responsible self care. This means ensuring that safe and effective self care products are readily available to all Australians at a reasonable cost. ASMI works to encourage responsible use by consumers and an increasing role for cost-effective self-medication products as part of the broad national health strategy.

For more information or to arrange a media interview, please contact:
Marie Kelly-Davies
PR Manager, Australian Self Medication Industry (ASMI)
P: 9923 9410
M:0408 256 381 E:
Bob Bowden
Foresight Communications
M:0412 753 298