The U.S. Finally Approves the First OTC Birth Control Pill — Perrigo Stock Gains Almost 5%

Key Takeaways:

• The U.S. has the highest maternal mortality rate in any economically developed nation
• Over 100 countries have already approved the OTC Pill
• The FDA’s Opill decision could decrease teen pregnancy and abortion rates

The Supreme Court overturned Roe v. Wade, ruling that women had no constitutional right to safe access to abortion in the United States. Of course, this doesn’t stop abortion — it merely pushes women to more dangerous methods.

The maternal mortality rate in the U.S. is the worst of any economically developed country, with the rate being 10 times higher than New Zealand’s. This huge blow to women’s reproductive rights puts more women at risk of premature death.

Thankfully, the Food and Drug Administration (FDA) made a smart choice on Thursday. Opill will be available to buy over-the-counter from next year. It’s about time — over 100 countries already allow OTC birth control pills. Let’s learn more about Opill with a short biology lesson.

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What is the Opill?

Opill is an oral contraceptive pill. The FDA approved it in 1973, but it’s only now available over-the-counter (OTC) without a prescription.

Opill’s active ingredient is norgestrel, a hormone belonging to the progestin family. People also call it the progestin-only pill (POP) or mini pill. Perfect use of the pill provides up to 99% protection, but you have to take the pill within the same three-hour window every day. With typical use, it prevents 93% of pregnancies.

Easy birth control access is vital as almost half of all U.S. pregnancies are unplanned. Plus, sex education is sorely lacking in the US. One study notes that today’s sex education is worse than in 1995.

While the U.S. teen birth rate has dropped fairly consistently since 1991, the rates are still far higher than any other Western industrialized nation. Notably, only 50% of teen mothers receive a high school diploma by 22 compared to 90% of non-teen mothers, so it causes a lifelong impact.

The investment case for Opill

From an investors standpoint, big drug changes like this provide serious potential. When a drug becomes available over the counter, it makes it far easier to get and generally means a major uptick in sales.

That’s good news for the pharmaceutical company who makes it, which in this case is Perrigo. The news of the FDA approval has caused a nice bump to the Perrigo stock price, which has gained 4.63% over the past 5 days.

Not only that, but it provides an additional string to Perrigo’s bow at future earnings calls, and could be expected to drive some positive movement on revenue. That’s particularly the case when the drug has already been proven to work, as is the case with the Opill.

The bottom line

The FDA’s decision to approve Opill for OTC use is a great step forward for women’s reproductive rights in the US, as well as providing a good potential opportunity for pharma investors. It’s the best of both worlds.

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