Commenters believe that the FDCA, read as an integrated whole, generally leaves the determination whether prescription drug or OTC drug labeling should be proposed for any new chemical entity up to its manufacturer(s). AAPS and CEI recognize that, as an exception to this general rule, FDA may restrict manufacturers to prescription labeling and distribution for certain drug products which cannot safely be dispensed OTC.2 That judgment must be made on a scientific basis taking into account the specific characteristics of the drug under review and the indications prescribed, recommended or suggested in its label.3 FDA should not, and lacks authority to, permit economic considerations to intrude into this scientific process.
Section 503(b)(3) of the FDCA, in Commenters’ view, serves an equally important public purpose. This section permits FDA to consider additional scientific evidence with respect to drugs it has previously restricted to prescription sale and to withdraw the requirement of prescription dispensation. Once that requirement is withdrawn for a particular drug under 503(b)(3), manufacturers are free to propose OTC labeling which FDA must then approve so long as the labeling permits the drug to be safely and effectively dispensed directly to consumers.4 Moreover, manufacturers wishing to continue prescription distribution of that drug cannot use the “Rx only” symbol, which signifies governmentally-required prescription status, and cannot rely on FDA’s use of legal sanctions under the FDCA to foreclose OTC distribution by others.
Thus, a 503(b)(3) rulemaking determination removes a significant regulatory constraint on manufacturer discretion and creates substantial economic incentives for OTC distribution. Neither the wording nor statutory context of 503(b)(3), however, suggests that the section goes further and permits FDA to prohibit prescription distribution or require OTC distribution.
The petition, however, seeks to extend the 503(b)(3) process directly into economic issues. While it asserts conclusorily that the drugs at issue can be used safely OTC,5 its principal arguments center on the insurance consequences of a forced switch to OTC distribution. Petitioner points out that its insurance policies do not cover OTC drugs so that a mandatory switch will directly reduce its costs.° However, it fails to point out that this will be largely at the expense of its policyholders — health care consumers.? Petitioner also claims that OTC distribution will force manufacturers to reduce existing prices. Whether or not these arguments are valid, they have no place in the 503(b)(3) process. It is well beyond the mandate of an agency charged with “protect[ing] public health by ensuring that . . . [drug products] are safe and effective” to determine whether particular drug purchases should be covered by insurance. It is equally beyond FDA’s purview to seek to regulate or affect manufacturer pricing. Moreover, marketplace analysis and the effects of distribution restrictions on pricing, which are complicated economic subjects, are well beyond FDA’s traditional expertise.
In seeking to limit 503(b)(3) proceedings to their proper scientific scope and consequences, Commenters wish to make clear that they are not seeking to limit the removal of unnecessary government restrictions on OTC distribution. AAPS and CEI have great confidence in the ability of American consumers to use drug products wisely and to determine for themselves whether medical consultation is appropriate. By focusing Section 503(b)(3) on removing government restrictions no longer dictated by safety concerns, rather than imposing new mandates on manufacturers, FDA can avoid the political quagmire arising from injecting itself into economic collisions between different industries inherent in mandatory switch contests and can properly permit market forces to regulate distribution choices. Moreover, by giving manufacturers additional distribution options consistent with patient safety, FDA can enable them to explore distribution and differential pricing options which expand drug availability to low-income consumer populations while permitting a reasonable recovery of development costs.
For these reasons, Commenters request that FDA make a threshold jurisdictional determination that the issue of mandatory switch is outside the proper bounds of the ongoing proceedings in Docket No. 98P-0610/CP and proceed promptly to a scientific determination whether the drugs at issue9 should be removed from the prescription-only requirements of Section 503(b)(1) of the FDCA.