Allergy Pills Spark Dispute
Insurer Urges FDA To Reclassify Drugs As Over-the-Counter

One of the nation's largest health insurers, in an unprecedented attempt to push drug costs down, is urging federal regulators to make three popular allergy remedies available over the counter.

WellPoint Health Networks of Thousand Oaks, Calif., in a petition to the Food and Drug Administration, argues that if the drugs Claritin, Allegra and Zyrtec are as safe as sugar pills, as company advertising suggests, then they should not require a prescription.

The case, the first time a third party has asked the FDA to reclassify a drug, pits two of the most influential players in the nation's health system -- the insurance and the pharmaceutical industries -- against each other.

The three makers of the drugs, Schering-Plough Corp., Aventis SA and Pfizer Inc., say they want to monitor the drugs' safety for several more years before considering a switch to over-the-counter status.

Industry experts, however, say that reclassifying the drugs would mean that insurers would no longer cover their cost, which could cut deeply into the drugmakers' profits. Either fewer people would be willing to buy the drugs, or the companies would have to lower prices to remain competitive, they say.

If it succeeds, WellPoint, which has nearly 10 million clients nationwide, would save $45 million a year in drug costs.

Experts say the case has far broader implications for how patients get their medications and who pays. As costs continue to rise, the unique petition by WellPoint represents the newest twist in the insurance industry's campaign to exert greater influence over the health system.

"My message to the American people is: 'Get used to it,' " said Uwe Reinhardt, a health economist at Princeton University. "Every year for the next half decade you will see your benefit package cut."

At a hearing Friday, members of two expert advisory committees will hear testimony and likely vote on a recommendation to the FDA. Although the agency has the authority to declare the drugs safe for over-the-counter sales, legal experts are divided over whether the government can order manufacturers to sell the products in a particular way. Already, the pharmaceutical companies are hinting about lawsuits.

Given the jurisdictional uncertainties, the FDA could have easily remained on the sidelines. In scheduling Friday's unusual hearing, the agency indicated it was taking the proposal seriously and wanted to "generate discussion on this topic," said pharmaceutical industry analyst Steve Francesco.

And if the FDA declares the drugs safe for widespread distribution, many suggest the public pressure on drugmakers will be too great to ignore. "One of them will put it out there" on the market "and the others will cave," Reinhardt predicted.

By law, the agency must base its decision on science, focusing on possible side effects and whether patients would be able to diagnose whether they are suffering from an allergy and use the drugs properly.

In a lengthy report to be released at the hearing, FDA staffers conclude that Claritin, Allegra and Zyrtec "may offer certain safety advantages over" the allergy remedies sold over the counter.

Doctors allied with the pharmaceutical industry, however, warned that more research is needed before the three products should be sold directly to the public.

"It took about 10 years to realize the cardiac toxicity" of the once-popular antihistamine Seldane, said Chandler May, a researcher funded by the drug companies. "The science needs five or 10 years to say if Claritin is safe at this level or Allegra is safe at that level."

Robert Spiegel, chief medical officer for Schering-Plough, said the proposal "trivializes" the seriousness of allergies and the important role physicians play. "The insurance companies see going to the doctor [for a prescription] as a cost," he said. "We see it as a benefit and an important part of the health care system."

He said allergies are often confused with colds and in some instances mask the more serious illness of asthma. In those cases, an allergy remedy would be inappropriate.

WellPoint countered that studies show Claritin, Allegra and Zyrtec are just as effective as over-the-counter antihistamines such as Benadryl and Chlor-Trimeton without producing the side effect of drowsiness.

"The FAA [Federal Aviation Administration] prohibits pilots from flying if they've taken drugs like Benadryl within 24 hours," said Robert Seidman, WellPoint chief pharmaceutical officer. "Yet they can fly if they've taken a drug like Claritin or Allegra."

In its ads, Schering-Plough compares Claritin's side effects to those found in a sugar pill, while Aventis says on its Web site: "In tests conducted by allergists, drowsiness in people who took Allegra 180 mg tablets was similar to placebo."

Said Seidman: "If they're marketing these like candy, then they should be sold like candy."

Francois Nader, a senior vice president at Aventis, advocates more research on Allegra. However, he stressed: "Our drug is safe, no question about it."

Given the large amount of money at stake, most analysts say the battle has little to do with health and safety.

"This is not a safety issue; these products have been sold over the counter in many markets outside the U.S. for many years," said industry analyst Francesco. "WellPoint is trying to save money by not having to reimburse, and the pharmaceutical companies want to remain on that reimbursement list."

Thanks in part to an aggressive advertising strategy, Claritin, Allegra and Zyrtec are major moneymakers.

The three drugs combined generated $4.7 billion in sales last year, according to IMS Health, an independent firm that tracks the medical industry.

More broadly, prescription drug spending jumped almost 19 percent in 2000, the fifth year in a row that pharmaceutical expenditures rose more than 13 percent, according to a survey by the National Institute for Health Care Management.

One reason for soaring drug prices is the high cost of research and development. Industry officials estimate it costs $400 million to $500 million to successfully bring a drug to market.

The drug manufacturers warn that if WellPoint succeeds, patients will suffer financially. Instead of facing a $10 or $15 copayment, they could be charged today's wholesale price of about $70. That, in turn, could trigger faulty purchasing decisions based more on price than quality, they say.

The poor and the elderly "are the ones most likely to go to the sedating antihistamines," said Joel Hay, a University of Southern California economist who consults for the pharmaceutical industry.

Many others predict that the companies, faced with direct competition at the drugstore, would slash prices. In Canada, for example, Claritin can be bought over the counter for about $12.