Today's Opinions, Tomorrow's Reality 

Prescription for Corruption

By David G. Young

Washington, DC, April 29, 2003 --  

The struggle by the Food and Drug Administration to force two popular allergy drugs from prescription to over-the-counter status shows that America's prescription drug system has decayed into dysfunction and corruption. The drugs' manufacturers, Pfizer and Aventis, vehemently oppose the switch for their Zyrtec and Allegra pills.1 They know full well that insurance companies will no longer pay the outrageously high prices they charge for the pills when they are available over-the-counter.

If it seems ironic that drug manufacturers would lobby to restrict consumers' access to their products, it is only because the normal laws of market economics have ceased to apply in prescription drug distribution. The American system of employer-supplied health insurance takes a monolithically inconsistent approach to paying for medication. Insurers don't pay a dime toward over-the-counter drugs, but do pay for prescription drugs, requiring consumers to contribute only a flat "co-payment" typically amounting to no more than $10 per bottle of pills. Such a system completely insulates the consumer from the actual costs, making expensive mass-market prescription drugs like Zyrtec and Allegra delicious cash cows for manufacturers.

But unlike honorable businesses, which make money by creating good products for which consumers are happy to pay, manufacturers like Pfizer and Aventis simply exploit a dysfunctional system, overpricing drugs that are unchecked by market forces, lobbying to keep them that way, and spending millions on vague consumer advertising to artificially inflate demand.

Corrupt as they are, Pfizer and Aventis are not the architects of this big-business racket. That dishonor falls upon the FDA, which took away Americans' freedom to choose and purchase medicines shortly after Congress passed the Food, Drug and Cosmetic Act in 1938.2 Legislators designed the law to improve labeling of instructions on medications, but the FDA decided that some drugs were too complex to label on the box. In a New Deal-era power grab, the FDA elected to label some drugs with, "Caution: to be used only by or on the prescription of a physician," thereby empowering the bureaucracy to run a new prescription drug system.3

In the 65 years since then, an explosion of health information available to consumers has made the original purpose of the prescription drug law irrelevant. Yet governments enforce it with ruthless vigor. In 1999, after a number of Internet pharmacies began selling prescription drugs with only an electronic physician consultation, several states supported by the Clinton Administration filed suit to shut them down.4 Nobody but drug manufacturers supports what the system has become -- a means for extracting money from insurance companies. Honest supporters justify retaining the prescription drug law with reasons ranging from the patronizing -- protecting uninformed consumers from their own choices -- to the futile -- combating antibiotic resistance by restricting access.

The elitists who employ the latter argument demonstrate that it is they -- and not the lowly drug consumers -- who are uninformed. The FDA cannot hope to combat the global problem of antibiotic resistance through a prescription drug system in the United States. The vast majority of the world, including almost every nation outside northern Europe and North America, has over-the-counter access to antibiotics. What possible collective good can come from restricting Americans' access to medications when over a billion Chinese, a billion Indians, and as many Latin Americans, Russians, and Africans freely use antibiotics without restrictions?5,6

Indeed, the only credible reason to maintain America's prescription drug law is to keep in place a corrupt system that enriches manufacturers fabulously. The FDA's attempt to move drugs to over-the-counter status shows that it acknowledges this reality, but can't bring itself to completely give up a major justification for the existence of its bureaucracy. If the FDA were objectively concerned about the common good, it would seek a general phase out of restrictions on medical purchases, thereby shaking up America's medical insurance system, and returning pharmaceutical pricing to the sanity of market forces.


1. Washington Post, FDA Says It Can Take Away Drugs' Prescription Status, April 26, 2003

2. Policy Analysis, Compassion Vs Control: FDA Investigational-Drug Regulation, May 1986

3. Ibid.

4. Reason, Prescription For Trouble, March 2000

5. American Family Physician, Controlling Antibiotic Resistance, March 15, 2001

6. Washington Post, China's Hospitals in Turmoil, April 15, 2003