This week the federal Food and Drug Administration ruled that generic forms of the brand-name “Plan B” morning-after pill can now be sold over the counter to women of all ages. The ruling means a spike in competition from generics and an increase in access for girls under 17, who could previously only buy the brand-name pill.
Consumers may welcome the increased competition, as it will most likely decrease the price of emergency contraception. But, taken together with our other national regulations on birth control, this ruling contributes to some bad incentives.
First, consider that other “Plan A” types of birth control (meaning the regular, 28-day pill and other forms of the same hormones in a shot, patch, or vaginal ring) remain available only with a prescription. This policy remains on the books despite the fact that the American College of Obstetricians and Gynecologists has recommended that these forms of birth control be available without a prescription.
What’s the big deal about getting a prescription? To some, it might seem like a low hurdle. But this process is more daunting for girls under the age of 17. Getting a prescription usually means seeing a medical professional who may require them to undergo screenings (such as a pap test). If you are a woman under 17, all of this seems like a lot of trouble compared to a quick, discreet visit to CVS after having sex.
Therefore, the easy availability of morning-after pills, coupled with the more strict regulation of non-contraceptive birth controls, actually encourages the non-emergency use of Plan B. Of course, this is not the drug’s intended use.
We should consider how these inconsistent regulations may encourage unhealthy sexual activity or even sexual abuse. A better approach would be for lawmakers to expand access to non-emergency contraceptives before making morning-after pills ubiquitously available, especially to teens.
But it’s not simply the over-regulation of the traditional hormonal birth control pill that is causing a policy problem. A mandate within Obamacare requires that all health plans include first-dollar coverage for all forms of FDA-approved birth controls. “First-dollar” coverage simply means women now pay no copay when they pick up their prescriptions for birth control. (But importantly, we still pay for these claims through health insurance premiums.)
In addition to creating legal problems and running over employers’ religious freedom, this mandate distorts birth control markets by removing consumers’ ability to make decisions based on price.
Birth control now differs from nearly every other consumer good, from toothbrushes to cars, where price factors into consumer behavior. Even when we only pay in part (through a copay), we feel some “skin in the game” and payment better reflects consumption. Without co-pays, consumption will increase (yes, there is some price elasticity for birth control), and consumers will shift toward higher-value drugs (meaning more expensive, although they can’t tell).
Our health system is already plagued by third-party payment and a related lack of price transparency. This mandate makes it worse.
The mandate, however, does not apply to condoms, which are the only form of contraception that also reduces the rate of sexually transmitted disease. This is another example of how government meddling can affect incentives: If people forego condoms in favor of other (covered) birth controls, there could also be consequences for public health.
The government is doing a poor job deciding which drugs to make available over the counter, and because of the mandates in Obamacare, the government will now be able to pick and choose which contraceptives are included in mandated coverage. Birth control users should be wary of giving such power to the federal government.
Women should be free to choose what kind of birth control to use, or not use. They should be informed about the benefits and downsides of all types of contraception. But these choices should be free of government distortions that encourage the consumption of some drugs over others.