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Allergy drugs deemed safe
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May 11, 2001: 6:14 p.m. ET
FDA panel says Claritin, Allegra and Zyrtec are safe to sell over the counter
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NEW YORK (CNNfn) - A U.S. government advisory panel declared three popular allergy drugs safe for over-the-counter use, to the delight of health management firm WellPoint Health Networks Inc. and to the dismay of some pharmaceutical firms.
A Food and Drug Administration advisory panel said late Friday that Claritin, made by Schering-Plough Inc., Allegra, made by Aventis SA (AVE: down $1.22 to $75.53, Research, Estimates), and Zyrtec, made by Pfizer Inc. (PFE: down $0.74 to $43.00, Research, Estimates), were safe to sell without prescription, the first step in considering a petition from managed-care firm WellPoint Health Networks (WLP: up $2.59 to $87.10, Research, Estimates) to end the prescription status of the drugs.
The change could save WellPoint Health Networks about $45 million annually, at the drug companies' expense.
However, there is uncertainty as to how the FDA will proceed given that the drug companies oppose the shift to non-prescription status.
In the midst of the worst allergy season on record, the advisory panel members recommended that if the drugs do become available over the counter, their labels should be changed to add warnings, since patients will not be seeing doctors before taking them.
Ahead of the vote, Aventis Senior Vice President Francois Nader said a switch for the drugs to OTC status would be ill-advised, and that more time was needed to monitor their safety in the field.
Drugmakers reap high profits from prescription products, especially in the United States, where prices are not controlled by the governments.
Consumer benefits look mixed
The benefits to individual consumers of a switch to OTC status look mixed. Uninsured people might see a price reduction, but millions with health plans that provide drugs for a $5 or $10 co-payment would see a price increase.
Testimony was heard at Friday's hearing that the prices might not come down much even if the drugs appeared on open store shelves.
Thousand Oaks, Calif.-based WellPoint has said the change could save money because some patients would be buying the medicines out of their own pockets and would not make expensive visits to doctors to get prescriptions.
WellPoint has said its petition is not unreasonable, given the fact that Allegra, Zyrtec, and Claritin are available OTC in Europe and Canada.
For the pharmaceutical companies, the stakes of a switch to nonprescription status are huge. Industry analysts say their revenues would suffer due to lower prices, while promotional costs could rise.
To Kenilworth, N.J.-based Schering-Plough, Claritin is a $3-billion-a-year bonanza that accounts for 30 percent of total company revenue.
Allegra contributes annual U.S. sales of $1 billion to the bottom line of Aventis, headquartered in Strasbourg, France. New York-based Pfizer's Zyrtec had sales of $699 million in 2000.
Shares of Schering-Plough (SGP: up $1.20 to $38.30, Research, Estimates) soared more than 6 percent earlier in the day on revived speculation of a merger with Merck & Co Inc. (MRK: down $0.58 to $75.94, Research, Estimates), even as people close to the companies suggested nothing was in the works.
Schering-Plough, which has been hit in recent months with manufacturing problems and a reeling share price, has been rumored as a takeover target for years.
-- from staff and wire reports 
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