Will converting naloxone to over-the-counter status increase pharmacy sales?

Objective: To estimate the own-price elasticity of demand for naloxone, a prescription medication that can counter the effects of an opioid overdose, and predict the change in pharmacy sales following a conversion to over-the-counter status.

Data sources/study setting: The primary data source was a nationwide prescription claims dataset for 2010-2017. The data cover 80 percent of US retail pharmacies and account for roughly 90 percent of prescriptions filled. Additional covariates were obtained from various secondary data sources.

Study design: We estimated a longitudinal, simultaneous equation model of naloxone supply and demand. Our primary variables of interest were the quantity of naloxone sold, measured as total milligrams sold at pharmacies, and the out-of-pocket price paid per milligram, both measured per ZIP Code and quarter-year.

Data collection/extraction methods: Primary data came directly from payers and processors of prescription drug claims.

Principal findings: We found that, on average, a 1 percent increase in the out-of-pocket price paid for naloxone would result in a 0.27 percent decrease in pharmacy sales. We predict that the total quantity of naloxone sold in pharmacies would increase 15 percent to 179 percent following conversion to over-the-counter status.

Conclusions: Naloxone is own-price inelastic, and conversion to over-the-counter status is likely to lead to a substantial increase in total pharmacy sales.