Cost and Benefits of Switching from Prescription Drugs to Over – the - Counter Drugs

1. Fall 2013: Econ 339 Final Presentation Nathaniel Nieco Magtanong December 3, 2013 Cost and Benefits of Switching from Prescription Drugs to Over – the - Counter Drugs Reference: Peter Temin 1992, Realized Benefits from Switching Drugs, Journal of Law and Economics, vol. 35 , nr. 2, p.351-369 Total:_________

2. History • Prescription drugs classification created in 1938 • Drug manufacturers classify drugs with approval from the FDA • 2 ways a drug can be switched • FDA commissioner can propose switch • Drug companies can file a New Drug Application seeking exemption from prescription drug label (most common practice)

3. Choices Game

4. Costs Abstract • Seeing a Doctor • $ Price of the doctor • $ Transportation costs (gas, public trans.) • Time (traveling and waiting) • Self Medication • $ Price of medication • Misdiagnosis • Prolonging illness

5. Benefits Abstract Seeing a Doctor • Professional diagnosis • Treatment not available OTC (antibiotics) Self Medication • Fast and cheap • Time Saving

6. Doctor Visits for Cold MIllions Years

7. Numbers • Consumer surplus from switching cold medicine in 1989 was $700 million • Resources saved from visiting doctor less was $70 million • Total benefit was $770 million