<<
It's not even clear that the profit per unit would be higher if vitamins
were prescription drugs.>>
The USP regulations for prescription drugs is a lot more expensive than the
USP regulations for OTC nutritional supplements. The profit might drop
because of this if vitamins were under the Rx drug regulations. Every year
the OTC regulations seem to get more expensive.
<< Nobody has a patent on vitamins. Most
doctors would prescribe the cheapest generic vitamins they could find.
This is exactly the kind of situation pharmaceutical companies want to
avoid.>>
My pharmaceutical clients could make and sell vitamins right now. Yet, they
do not make any vitamins. Why? They assume the FDA would place the same
expensive regulations on their OTC vitamins as on their Rx drugs despite the
USP. And, they could not charge higher prices to offset the cost. So, they
choose not to make any OTC vitamins. If all vitamins were Rx, that could
change.
<< They can make a lot more money selling vitamins over the
counter than they would make selling them by prescription. >>
I am unclear if this is true or not. Let's see: Generic Rx makes a lot of
profit but only if the drug is unusual or hard to make and therefore, there
is less competition from other generics. So, I guess if vitamins are easy to
make even under Rx regulations there would probably still be more competition
and less profit than selling them OTC. You are probably right.
The innovators (patent holders) would be out of the picture, because there
are none for vitamins.
Dynamically Optimistic,
Davin
November 1, 1996
5:22 pm