The news: Federal regulators want to make it easier for drugmakers to switch medications from a prescription-only to over-the-counter (OTC) status.

FDA Commissioner Marty Makary told CNBC the agency plans regulatory changes this year to allow more prescription drugs to be sold OTC. Unless a drug is unsafe, addictive, or requires ongoing monitoring, he said, “everything should be over the counter.”

Why it matters: While pharma and OTC manufacturers favor “Rx-to-OTC” switches to extend a product’s life cycle, changing a drug's status presents significant challenges beyond just regulatory hurdles.

• Fewer than 39 drugs have been approved for Rx-to-OTC switches since 2001 in part because of currently strict requirements and high costs of running more clinical studies, according to industry trade association PhRMA in a recent response to proposed changes.
• Regulators globally have rejected switches over concerns that consumers may misuse medicines, misdiagnose their conditions, or misunderstand side effects, according to a recent ScienceDirect study.
• In the 2000s, Merck and Pfizer sought FDA approval to move their statin drugs, Mevacor and Lipitor, to OTC status, but both were rejected because officials questioned whether consumers could safely determine or self-manage their condition.

However, the FDA sees a potential upside in broader access to medications and possibly lower costs for consumers if certain drugs become available over the counter.

Implications for pharma companies and consumers: A broader push to move prescription drugs to retail shelves would reshape incentives on both sides of the counter.

For pharma, easier prescription-to-OTC switches could extend brand life and open a direct-to-consumer sales channel. While drug patent exclusivity eventually expires—triggering low-margin generic competition in the prescription market—a brand name (e.g., Advil or Claritin) can live indefinitely on store shelves. For instance, when AstraZeneca switched its heartburn medication Prilosec from prescription to OTC in 2003, it continued marketing (and sales) as the “purple pill” now available without a prescription. By moving to OTC, drug manufacturers bypass PBM and insurer gatekeepers, gaining direct control over pricing and marketing directly to consumers.

For consumers, OTC access would expand availability, but shift more responsibility to individuals. Patients purchasing OTC drugs instead of covered brands or generics would lose insurance-negotiated savings and deductible contributions. In addition, treatment decisions once guided by insurers and healthcare providers would increasingly fall to consumers.

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