Performance Improvement 2000. Environmental Assessments


Analysis of Prescription Drug to Over-the-Counter (Rx-to-OTC) Switch Movement


This study identified the trend and some possible reasons for the Rx-to-OTC switch movement; estimated the price and income elasticities of OTC switch drugs; and described the relationship between the demand for OTCs and select market and demographic variables. The study also examined the impact of specific Rx-to-OTC switches on clinical practice patterns, costs and benefits associated with the OTC switch movement, and the levels and types of Medicaid coverage for OTCs in different states. To conduct the study, the researchers reviewed the literature, and conducted key informant group interviews and analyzed select data sets. The findings of the literature review indicated that a number of forces have had an impact on the Rx-to-OTC movement: the market expansion motives of pharmaceutical companies, the trend toward deregulation. the individual autonomy/self-help movement, and health care containment efforts. Key informant interviews revealed that the switch trend was viewed as a positive one. Other analysis revealed a general increase in the demand for OTCs; higher benefits associated with the OTC switch relative to costs, and different types and levels of coverage of OTCs in Medicare Plans, from state to state. The study enabled the researchers to identify a set of questions requiring research attention.


This study focused on the impact of “switched drugs” and the switch trend–that is, prescription drugs (Rx) which have been switched to over-the-counter (OTC) status, with emphasis on more recent switches and potential switches. The central aim of the study was to provide a comprehensive review and analysis of the Rx-to-OTC switch movement in order to inform policymakers and define relevant research questions.


Approximately 600 over-the-counter (OTC) products currently available use ingredients and dosages available only by prescription 20 years ago. While there has been a steady stream of OTC switches since the mid-1970s, the number of switches has accelerated in recent years. Between 1988 and 1994, there were 14 switches, while in the last three years thee were at least 19 switches. Some of the possible reasons cited for this trend include: 1) a growing emphasis on individual autonomy and self-help; 2) a trend toward deregulation in the U.S.; 3) health care cost containment efforts; and 4) pharmaceutical industry self-interest/profit. The issue of Rx-to-OTC switching deserves considerable attention because of the large number of people who could be affected by the trend, including consumers, pharmaceutical companies, physicians, pharmacists, and payers.


The project began with a review of the literature related to the Rx-to-OTC switch movement. Based on the results of the literature review and discussions with the Research Advisory Group, an interview guide was constructed and administered to seven key informants representing pharmacists, consumers, policymakers, physicians, pharmaceutical companies, and payers. The interview guide covered three areas related to the switch movement: understanding the trend, understanding the process for switching drugs, and policy issues. Sales data for three recent switch drugs (H2 blockers, vaginal anticandidals, nicotine replacement products) were analyzed to examine the impact of specific Rx-to-OTC switches on clinical practice patterns. Focusing on the OTC availability of vaginal anticandidals, the research team identified and compared the benefits and potential negative outcomes associated with the OTC switch, taking into account the likelihood of their occurrence. In addition, the team examined epidemiological and medical literature to ascertain what researchers do or do not know about occurrence and treatment of vaginitis. Using data on state Medicaid plan coverage, the researchers examined the levels and types of OTC coverage provided in different states, and compared the utilization of “alternative” prescriptions and overall costs per beneficiary for plans that do and do not cover specific OTCs.


The literature review identified the market expansion motive on the part of pharmaceutical companies; the individual autonomy/self-help movement; the trend toward deregulation in the U.S.; and health care cost containment efforts as four major forces responsible for the Rx-to-OTC switch movement. In general, key informant interviews revealed that: 1) the switch trend was viewed as a positive one, providing increased access to safe and effective drugs and cost savings, primarily through reduced office visits and work time lost; 2) the FDA process for reviewing potential switches was seen as adequate and the number and types of switches as appropriate; 3) drug safety and efficiency profiles as well as the ability of individuals to appropriately self-diagnose and self-medicate were seen as the critical elements in the timing of an OTC switch; 4) the best types and levels of OTC information and the translation of that information into consumer knowledge of appropriate OTC use wee cited as critical policy issues; and 5) insurance coverage of OTCs was not seen as an issue of significant policy concern at this time.

Analysis of the demand for OTC switch drugs (H2 blockers, nicotine replacement medications, vaginal anticandidals) revealed that: 1) the demand for H2 blockers and vaginal anticandidals was relatively elastic (i.e., sensitive to price), but the demand for nicotine replacement medications was relatively insensitive to price; 2) increases in income led consumers to purchase more of the OTC products; 3) lower income populations were more to OTCs; 4) OTCs may actually serve as a substitute for conventional medical care (physician and hospital care). Results of estimations of individual demand for specific OTC brands within the three categories were generally consistent with the researchers expectations that these OTC markets are characterized by monopolistic competition.

The results of the analysis of the impact of OTC switch drugs indicate that: 1) the average number of vaginitis visits per woman decreased significantly in the post switch period (1990-1994); 2) the OTC switch of the more potent version of hydrocortisone (1%) had little impact if any on the number of patients seeking physician care for dermatitis complaints; 3) prescription rates for clotrimazole and miconazole decreased significantly after these medication switches to OTC, but there did not appear to be a significant increase in the prescription rates for other “substitute medications,” 4) prescription rates for hydrocortisone fell after the medication went OTC; and 5) the only related dermatitis drugs that were prescribed significantly more in 1990 and 1985 were those used for the treatment of acne. The study revealed that the estimated benefits of OTC anticandidal availability per person ($61.96) outweighed the estimated costs ($3.85).

With regard to trends in Medicaid coverage of OTCs, the study revealed that: 1) the number of OTCs covered varied significantly (from 0 to 408) from state to state; 2) the average level of (Medicaid) OTC expenditures per state in 1997 was $296 million; 3) OTC expenditures represented approximately three percent of Medicaid pharmaceutical budgets; 4) in general, Medicaid cost per beneficiary for OTC substitute drugs did not appear to differ significantly between states that do or do not cover OTC vaginal anticandidals; and 5) Medicaid OTC costs rose 38 percent between 1994 and 1997, and increased slightly less than the increase in pharmaceutical costs per beneficiary (48%) over the same period.

Use of Results

Consistent with the exploratory nature of this study and the expectations of the researchers, the study generated several questions, such as: How do consumers make decisions to purchase OTCs versus seeking professional care? How do clinicians treat patients in the presence of OTC products and lack of insurance coverage? What is the impact of health outcomes? Is it cost effective for health care plans to cover OTCs? How will decision-making change as more products become OTC? These questions and others raised in the study and the gaps in our knowledge of anticandidals self-medication are some of the areas that must be addressed with further research.

AGENCY SPONSOR: Office of the Secretary, Office of the Assistant Secretary for Planning and Evaluation


PHONE NUMBER: 202-260-7329

PERFORMER ORGANIZATION: Northwestern University, Evanston, IL

Results of a Multi-Site Study of Mandatory Medicaid Managed Care Enrollment Systems: Implications for Policy and Practice


Under most Medicaid managed care plans, beneficiaries who do not select a plan are automatically assigned to one. In some states, as many as 60 to 75 percent of these people may have been automatically enrolled. Concerns about this high rate of automatic assignment and whether the enrollees were making an informed choice prompted this study, which describes the effects of enrollment and autoenrollment (automatic assignment) policies and practices under mandatory Medicaid managed care on federally qualified health centers (FQHCs), FQHC networks and their plans, and their patients.

This study, the second phase of a two-part research project, examined the enrollment policies and practices under mandatory Medicaid managed care (MMMC) in nine states, and the experiences of Medicaid beneficiaries enrolling in managed care. Researchers also assessed the effects of MMMC enrollment policies on federally qualified health centers (FQHCs) and their ability to survive managed care. The first phase of the study grew out of the desire to gain greater understanding of possible causes for the high rates of auto-enrollment (mandatory assignment to a health plan when beneficiaries do not voluntarily enroll) in state Medicaid managed care programs. Because Medicaid managed care enrollment is one of the least well understood aspects of managed care, researchers wanted to improve the level of understanding about emerging issues and identify implications for access and quality.


The number of Medicaid beneficiaries enrolled in mandatory managed care programs has grown rapidly since 1990, creating a need to learn more about the dynamics of all facets of managed care. There is an evident need to develop a better understanding of how various state enrollment policies are constructed, how the enrollment practices actually work, and the significance of these policies and practices for beneficiaries, plans, and providers.


Concerned about the high rates of automatic enrollment in Medicaid plans, researchers reviewed policies and practices in 34 states with MMMC programs and found that they varied greatly, with no discernible association between particular state autoenrollment policies and high levels of autoenrollment. Medicaid beneficiaries have little or no knowledge about managed care and state agencies have limited knowledge and experience with managed care delivery systems and are also hampered by budget constraints. How people are enrolled in Medicaid has important implications for them, including access to and continuity of care, the stability of their existing relationships with providers, and their overall satisfaction with managed care. Mandatory enrollment also affects healthcare providers and may help determine the structure of the managed care market. The way States approach mandatory enrollment may influence market entry by various types of managed care plans as well as their stability and survival.


The methodology for the project involved a series of case studies conducted in nine states. Researchers analyzed numerous descriptive variables when selecting states from which to draw the case studies among the 34 with significant Medicaid managed care activity. The variables included autoenrollment rates, use of enrollment brokers, how long MMMC had been implemented, and FQHC’s experience with changes in patient volume and revenue. The researchers used focus groups to gain a picture of the enrollment experiences of Medicaid beneficiaries under their states’ Medicaid managed care programs. They also examined the experiences of providers which traditionally serve beneficiaries, particularly federally qualified health centers, because they are especially challenged by MMMC. The team constructed five study questions with subquestions to address the study objectives and to identify major areas of inquiry for the research. It also conducted structured interviews onsite with state Medicaid officials, managed care plan officials, FQHC representatives, Medicaid beneficiaries, and community advocates.


Seven major findings emerged from this study:

  1. States shared many enrollment practices in common, but varied in their commitment and approach to outreach and education among patients about enrolling in managed care. Intensive use of community-based organizations (CBOs) emerged as an increasingly successful strategy for meaningful outreach and education.
  2. Lack of information about providers and plan networks consistently precluded Medicaid beneficiaries from exercising a choice during enrollment. This fundamental inability to choose has the potential to undermine the Federally Qualified Health Centers (FQHCs’) strategies to retain patients and gain new ones.
  3. Managed care plans primarily were concerned about unstable markets due to unstable eligibility/enrollment patterns for beneficiaries and declining Medicaid caseloads.
  4. For FQHCs, enrollment concerns were important but secondary to reimbursement problems in terms of the compelling challenges associated with surviving managed care.
  5. Medicaid beneficiaries reported that the ability to choose their provider was most important and that access to information necessary for choice was limited. Their most valued and effective sources for such information were their providers and CBOs.
  6. Enrollment plays two critical, and potentially conflicting, roles in mandatory Medicaid managed care (MMMC): ensuring that beneficiaries get coverage by entering a plan, and creating a market by making large groups of people available to plans. Autoenrollment was of uncertain and variable importance.
  7. Market pressures on state officials to ensure rapid implementation of MMMC programs resulted in enrollment procedures and practices that did not give beneficiaries the information necessary to choose their providers and to navigate managed care.

Use of Results

Potential uses of the findings are to: Improve the quality of information on plans and providers given to beneficiaries to help them voluntarily choose a plan; Develop strategies for improving the enrollment process; Identify common interests among the states, managed care plans, FQHCs, and beneficiaries; Generate collaborative problem solving between public and private policymakers.

AGENCY SPONSOR: Health Resources Services Administration


PHONE NUMBER: 301-594-4058

PERFORMER ORGANIZATION: George Washington University, Washington, DC

Drug Use Prevalence Estimates Among Adult Arrestees in California, Texas, and the U.S.: Final Report


If drug abuse among criminal offenders is to be successfully tackled as a vital issue on the national agenda, policymakers need the best available data. In an effort to provide better estimates of national drug use among arrestees, the researchers in this study discovered that multiple capture rates (the rates at which individuals appear in repeated arrests on a database or are “rearrested”) were significantly higher than those reported in earlier literature on the subject. In this study, the investigators estimated drug use prevalence for various sizes of arrestee populations using state and national samples; evaluated the applicability to large-scale data sets, as well as to various subgroups, of a previously developed regression model for synthetic estimation; examined the predictive power, sensitivity, and robustness of the model; and conducted testing to increase the accuracy of model estimates. The overall aim of the research was to obtain better estimates of drug use prevalence to lend greater scientific support to policy decisions and allocations of resources. The researchers applied the direct projection, bootstrap, and logistic regression synthetic estimation techniques using the national Drug Use Forecasting (DUF) project data, California DUF-like survey data, national FBI Uniform Crime Report (UCR) data, the California Monthly Arrest and Citation Register (MACR) data, and the 1990 U.S. Census and 1996 Current Population survey information to produce scientifically defensible estimates of drug use prevalence among arrestees. For example, the study indicates that of the 1.17 million adults arrested in California in 1996, more than a fourth were arrested for drug-related offenses, and 65 percent had used drugs before their arrest.


Policymakers need reliable information about drug use among criminal justice populations to more effectively respond to problems associated with drug use and crime. The need for improved drug use prevalence estimation techniques has been emphasized by several government agencies. The previous work of researchers from the UCLA Drug Abuse Research Center (DARC), including an initial study of regression modeling for drug use prevalence estimation, resulted in the development of a regression approach to synthetic estimation of drug use prevalence. This comparative follow-on study was conducted to: 1) estimate drug use prevalence for various sizes of arrestee populations using data from three separate studies of California, Texas, and national samples; 2) evaluate the applicability of the previously developed regression model for synthetic estimation to large-scale data at local, state, and national levels, as well as to various subgroups defined by gender, race/ethnicity, age, and type of offense; 3) examine the predictive power, sensitivity, and robustness of the regression model for synthetic estimation; and 4) determine overall and subgroup multiple capture rates (repeated arrests) to increase the accuracy of model estimates.


The high number of drug users in the criminal justice population and the immense costs and consequences of drug-related activities to society have been central topics of recent policy discussions. Studies have shown that the prevalence of drug use among arrestees is far greater than expected on the basis of estimates derived from general population studies. Policymakers have emphasized the need to obtain better estimates of drug use prevalence to scientifically support policy decisions and allocation of resources. Without enumeration of actual drug use among criminal justice populations, policymakers must base their decisions on reliable estimates obtained from comprehensive approaches which compensate for incomplete information and encompass various drug-related phenomena. Typical applications of the synthetic estimation methods have been limited by the lack of consistent empirical evidence of relationships between drug use prevalence and the indicators selected as covariates for model inclusion. To improve prevalence estimation methods, the UCLA Drug Abuse Research Center (DARC) conducted an initial study of regression modeling to estimate drug use prevalence among arrestees, resulting in improved conceptualization and preliminary application of a regression model. This study is part of an ongoing effort to evaluate the applicability of the flexible regression model to small-scale, relatively large-scale, and large-scale data.


The project performed secondary analysis on data from five major sources: the national DUF (ADAM) project, the California DUF-like survey data, the national Uniform Crime Report (UCR) data provided by the FBI, the California Monthly Arrest and Citation Register (MACR) data, and the 1990 U.S. Census and 1996 Current Population Survey information. The national and California DUF data served as the calibrator to estimate the number of drug users among arrestees in the national and California MACR data. Prevalence estimation at the county, state, and national levels were generated in three relatively independent studies for California, Texas, and the nation. To yield prevalence estimates, the research team used a three-step logistic regression model and estimation procedure. First, they conducted a separate logistic regression analysis using DUF data as the calibrator for each of the 96 subgroups defined by gender, race/ethnicity, age, and crime type. Second, they used the regression coefficients estimated from the logistic regression to derive drug use rates at county, state, and national levels. Finally, they obtained estimates of the number of drug-using arrestees in all subgroups at county, state, or national levels by multiplying derived prevalence rates by the number of arrestees in county, state, or national arrestee populations. For comparison purposes, they used two other methods in addition to logistic regression: 1) Direct projection of drug use rates from DUF survey data to calculate drug use prevalence in arrestee populations represented in state-wide or national arrest data; 2) The Bootstrap Method to estimate drug use rates and their standard errors from the DUF survey data to estimate drug use prevalence in larger arrestee populations.


A major finding of this study was that multiple capture rates (the rate at which individuals appear multiple times in the same database, or are “re-arrested”) were significantly higher than those reported in the literature. Moreover, multiple capture rates dramatically differed by gender, race/ethnicity, and crime type. The overall recapture rate among California arrestees in 1996 was about 30 percent. The overall recapture rates were highest for drug-related offenses. The study showed that 1.27 million adults were arrested 1.64 million times in California, in 1996. More than a quarter of the total number were arrested for drug-related offenses, and 65 percent had used drugs within three days of their booking date. Among the number of those arrested in California, about 770,000 were projected to be drug users. The study showed that 863,000 adult arrests were reported in Texas in 1996. Based on the regression analysis performed, the projections for adult arrestees and drug users was 13 percent higher than those produced by the bootstrap and direct projection methods. The analysis of national-level data revealed that in 20 of the 23 DUF sites, more than 60 percent of adult male arrestees in 1996 were positive for at least one drug; in 21 of 23 sites, more than 50 percent of female arrestees tested positive for at least one drug.

The study indicated that the regression model needs to be further expanded to include a wider range of drug abuse indicators and associated variables to stabilize estimations at various administrative levels and for special groups.

Use of Results

The study provided compelling evidence that regression models of synthetic estimation are sensitive to, and capable of, high-confidence estimates of drug use prevalence at local and state levels for many different subpopulations, as well as for the nation as a whole. The clear, detailed findings related to estimates of drug-using arrestees and estimates for gender, race/ethnicity, age, and crime-type subgroups are very likely to be useful to policymakers and researchers who want a comprehensive picture of the prevalence of drug use among adult arrestees.

AGENCY SPONSOR: The Substance Abuse and Mental Health Services Administration


PHONE NUMBER: 301-443-7730

PERFORMER ORGANIZATION: Caliber Associates, Fairfax, VA