Over-the-counter Market Research Articles

Self-care and minor ailments: The view from Canada

This manuscript offers a glimpse into the Canadian healthcare system, emphasizing the prevalence and management of minor ailments through self-care practices. The first section outlines the strengths and challenges of the healthcare system, including access issues and escalating costs. The second section explores self-care in Canada, outlines the Self-Care Readiness Index, and Canadians' proactive management of common conditions through self-care activities, including the use of over-the-counter (OTC) medicines. Consumer behaviors, preferences, and the thriving OTC market are discussed. It also discusses existing programs and initiatives encouraging self-care. While lacking a coordinated national strategy, various organizations, including Health Canada, have taken steps to regulate and promote self-care products. The role of pharmacies, industry groups, and public health campaigns in fostering self-care is explored, along with public access to OTC medicines, Rx-to-OTC switching, and consumer expectations related to such medicines. Factors influencing self-care and self-medication are explored, focusing on access to medical care, public perceptions of OTC medicines, and the public's ability to engage in appropriate actions. The crucial role of pharmacists in minor ailment care is examined. Insights are provided into Canada's healthcare landscape, emphasizing the significance of self-care in managing minor ailments. The public has access to many resources on how to engage in self-care and deal with minor ailments, but a formal system to promote them is lacking. The findings prompt considerations for future healthcare policies and public health campaigns, highlighting the evolving nature of healthcare practices in the nation.

A Detailed Analysis of the Past 20 Years of US FDA-Approved Prescription to Over-the-Counter Switches

ObjectivesThis evaluation assesses the quantity, uniqueness, and innovative nature of the past 20 years of Rx-to-OTC (RTO) switches, where a current prescription (Rx) product is reclassified for over-the-counter (OTC) status. Broadening access to more OTC drugs with well-established safety and efficacy could help to reduce healthcare expenditure and address public health challenges.MethodsThe FDA-maintained RTO switch list website was accessed to generate the primary dataset. Each product listed was assessed for the current OTC availability in the United States of its active ingredient, pharmacological class, and indication to determine its innovative quality. Descriptive statistics were employed in this study.ResultsFrom January 2002 through August 2022 there were 45 RTO switches. Among these, 51.1% involved a new to OTC active ingredient, 22.2% involved a new pharmacological class, 6.6% involved a new indication, and 82.2% were considered follow-on products that introduced a new to OTC active ingredient or new dosage form of an already marketed active ingredient to treat an existing OTC indication. A small minority (6.6%) were considered an exceptional innovation that would offer US consumers a genuinely novel OTC product, providing a new to OTC active pharmaceutical ingredient, pharmacological class, and indication. Overall, there was 1 exceptional innovation every 6.7 years.ConclusionsOver 40 RTO switches have come to the OTC market in the past 20 years; however, exceptional innovations that expand access to new to OTC active ingredients for new indications are rare. Policies and strategies that result in more innovative switches that can benefit consumers and public health should be evaluated.

THE GLOBAL NUTRACEUTICAL DOMAIN

Dear Reader, Nutraceuticals is no more a fancy word shrouded in a mysterious veil. It is a gospel truth and now a well-embraced norm, that ‘positive health’ can only be fostered by nutraceuticals – be it called supplements, ayurceuticals or herbals. Although advocating and consuming ayurceuticals is an Indian-centric reality, the impetus to embracing nutraceuticals (which is a general term encompassing supplements and biologicals or herbals) by Indians has definitely come from the globally proliferating OTC (Over-The-Counter) market with such products and their overflowing into the Indian subcontinent in the 1990s!

Do Firms Round Up Operating Cash Flows?

This study examines the rounding phenomenon in operating cash flows for firms listed in the three major U.S. stock exchanges (i.e., New York Stock Exchange, NASDAQ, and American Stock Exchange) and the U.S. Over-the-Counter (OTC) market. It finds that firms listed in the three major stock exchanges round￾up earnings, but they do not round-up operating cash flows; while firms listed in the OTC market round￾up both earnings and operating cash flows. Overall, the results from this study provide consistent evidence that firms have incentives to round up operating cash flows to paint a rosy picture of the firms’ performance; however, it is more difficult to round-up cash flows than to round-up earnings. Therefore, in an environment where the rules and disclosure requirement is strict (i.e., the three major U.S. stock exchanges), firms do not have the opportunities to round-up cash flows; but in an environment where the rules and disclosure requirement are less strict (i.e., the OTC market), firms actually do round-up cash flows in practice.

Modern OTC market structure and liquidity: The tale of three tiers

OTC Markets Group organizes stocks that trade over-the-counter (OTC) into three marketplaces (OTCQX, OTCQB, and Pink) based on firm quality and disclosure practices. We examine trading within these tiers and find that stocks in higher tiers are more liquid than stocks in lower tiers. After a series of difference-in-differences tests comparing a matched sample of stocks that change tiers, we find that liquidity improves (deteriorates) for stocks moving up (down) the tiered market structure, suggesting that the tier designations resolve uncertainty and increase firm visibility. Our results show that liquidity differences between tiers is attributable to OTC market structure.

Investor base, cost of capital, and new listings on the NYSE

Investor base, cost of capital, and new listings on the NYSE

Issues in Islamic Derivatives and Proposals for Reforms in the OTC Market in Indonesia

This paper aims to propose reforms to develop the Islamic derivatives transactions in Indonesia’s over-the-counter (OTC) market. It is argued that the use of derivatives instruments is considered non-sharia compliant by the National Sharia Board (NSB) of the Indonesian Council of Ulama. However, other Ulamas had adopted a different approach in discussing the issues of derivatives contracts. Standard doctrinal and comparative approaches are employed in this discursive qualitative analysis using an extensive review of the literature from primary and secondary sources to collect the data on Islamic derivatives in the OTC market. This research concludes with two proposals for Islamic derivatives in the OTC market in Indonesia; first, the use of musawamah (sale without revealing the cost) in the swap, al-khiyar (the right to make choice) in option, ju’alah (commission) in future contracts, and wa’ad (a promise) in option can further boost the investors in the OTC market. Second, the Islamic scholars should be softening towards the decision of using derivatives instruments in Indonesia. Such as in the case of the forward agreements, which should be exempted from non-sharia compliance, provided they are used solely for reducing risk due to necessity in al-tahawuth lil hajah al-massah (sharia-compliant genuine hedging needs).

A Theory of Participation in OTC and Centralized Markets

Abstract Should regulators encourage the migration of trade from over-the-counter (OTC) to centralized markets? To address this question, we study a model in which banks make costly decisions to participate in an OTC market, a centralized market, or both markets at the same time. Banks differ in their ability to take large positions, what we call their trading capacity. In equilibrium, intermediate-capacity banks find it optimal to participate in the centralized market. In contrast, low- and high-capacity banks find it optimal to participate in the OTC market, due to an endogenous complementarity. Namely, low-capacity banks receive worse terms of trade than in the centralized market but better risk sharing, thanks to the intermediation services offered by high-capacity banks. High-capacity banks receive worse risk sharing than in the centralized market, but profit from the provision of intermediation services to low-capacity banks. While the social optimum has qualitatively similar participation patterns, it prescribes that more customers migrate to the centralized market, and that more dealers enter the OTC market.

Self-medication in Greece: the financial impact from expanding the OTC market.

To assess the financial impact of self-medication enhancement through a potential expansion of the over-the-counter (OTC) drug list in Greece. An analysis consisting of two scenarios was conducted. The first scenario estimated the financial effects of hypothetically switching 5% of the volume of the total sales of reimbursed drugs in Greece to OTC, while the second scenario estimated the effects of switching to OTC the total sales volume of a set of active substances (which are currently reimbursed), facilitated by a consensus panel meeting. The analysis was conducted from the third-party payer, individual and societal perspectives. Data and costs refer to the year 2019. Switching 5% of the volume of the total sales of reimbursed drugs to OTC was estimated to lead to total annual savings of 227.57 million euros. The annual savings from the third-party payer, individual and societal perspectives were estimated at 97.06 million euros, 91.81 million euros and 38.69 million euros, respectively. Switching the total sales volume of the reimbursed drugs of the active substances which emerged from the consensus panel meeting was estimated to lead to total annual savings of 567.57 million euros. The annual savings for the third-party payer, individuals and society were estimated at 232.91 million euros, 241.01 million euros and 93.65 million euros, respectively. Although the present analysis is model-based, and thus did not incorporate some potentially significant parameters, it demonstrated the financial savings which a potential expansion of the OTC drug list could produce for the third-party payer, individuals and society in Greece.

Intermediation in over-the-counter markets with price transparency

A salient feature of over-the-counter (OTC) markets is intermediation: dealers buy from and sell to customers as well as other dealers. Traditionally, the search-theoretic literature of OTC markets has rationalized this as a consequence of random meetings and ex post bargaining between investors. We show that neither of these are necessary conditions for intermediation. We build a model of a fully decentralized OTC market in which search is directed and sellers post prices ex ante. Intermediation arises naturally as an equilibrium outcome for a broad class of matching functions commonly used in the literature. We further explore, both analytically and numerically, how the extent of intermediation depends on the nature of frictions and model primitives. Our numerical exercises also contrast the model's equilibrium implications to those of a benchmark model with random meetings and ex post bargaining.

Rounding Phenomenon in the OTC Market

This study investigates the rounding phenomenon in the over-the-counter (OTC) market and finds that (1) similar to firms listed in the major U.S. stock markets, OTC-listed firms manipulate their reported earnings and revenues through rounding; (2) rounding manipulation is more severe in the OTC market than in the major stock markets and (3) the enforcement of SEC’s mandatory disclosure requirements in 1999 reduced OTC firms’ rounding manipulation activities. This study extends the rounding manipulation literature and provides the first piece of empirical evidence of rounding manipulation in the OTC market. It helps scholars and investors better understand firms in the OTC market. This study also provides feedback to policy makers and regulators on the effectiveness of the SEC mandatory disclosure requirement on OTC firms’ financial reporting quality.

Closed-form pricing formula for foreign equity option with credit risk

Since credit risk in the over-the-counter (OTC) market has undoubtedly become very important issue, credit risk has to be considered when the options in the OTC market are priced. In this paper, we consider the valuation of foreign equity options with credit risk. In order to derive a closed-form pricing formula of this option, we adopt the partial differential equation (PDE) approach and use the Mellin transform method to solve the PDE. Specifically, triple Mellin transforms are used, and the pricing formula is presented as 3-dimensional normal cumulative distribution functions. Finally, we verify that our closed-form formula is accurate by comparing it with the numerical result from the Monte-Carlo simulation.

Does Brexit Have a Bullish or Bearish Effect on the Taiwan Stock Market?

Using the event study method to analyze one year of daily trading data of formal and Over-The-Counter (OTC) stocks in Taiwan, this study investigates whether the Brexit referendum led to abnormal returns, as well as the financial characteristics of the stocks, and the influential financial variables. The Taiwan stock market had negative abnormal returns on the day of the Brexit referendum. The high-abnormal return group was more significantly affected than the low-abnormal return group. The book-to-market ratio, price-to-earnings ratio, yield rate, average foreign shareholding ratio, and stocks overbought and oversold had a more significant impact on the low-abnormal return group. Abnormal returns were generated mostly in the OTC (Over-The-Counter) market. This event affected financial stocks more significantly than electronics and information technology stocks. The effects on formal stocks, OTC (Over-The-Counter) stocks, and the overall market were the most significant for the turnover rate and stocks overbought and oversold, yield rate, and turnover rate and book-to-market ratio, respectively. The results confirm that the model of the impact of a special event on the behavioral response in the Taiwan stock market can be used to predict changes in stock market prices when a special event occurs in the future.

Strategic Analysis of the Turkish Over-the-Counter Drugs and Non-pharmaceutical Products Market

The over-the-counter (OTC) drug (i.e., non-prescription drugs) market is growing significantly on a global scale. Our study reviews strategies for OTCs, together with other non-pharmaceutical products, such as herbal products, dietary supplements, and other healthcare products. The aim of this study is to analyze the expanded OTC industry to offer possible strategic solutions for existing problems. We utilized integrated SWOT and Fuzzy Analytic Network Process analyses, together with quantitative analysis covering industry professionals' perspectives. Our findings showed that the most suitable market strategies are WO2 (i.e., to use information and digital technologies, including mobile applications and social media, to reduce marketing costs), SO2 (i.e., to promote self-medication/self-care to grow the OTC market and invest in information and communication technologies for this purpose), and ST2 (i.e., to improve health literacy and increase access to accurate and understandable information via alternative channels, such as the internet and social media). These key strategies are closely related to the utilization of digital technologies. Other strategies, such as SO1 (i.e., to encourage pharmacists to provide consulting for OTC products, which carry high profitability) and ST1 (i.e., to undertake stakeholder training programs to ensure production quality and introduce safe use to improve community health), were examined in detail, and their outcomes were interpreted in this study. Given the impact of digital transformation, the same strategies can be implemented for other emerging OTC markets. This study underlines the importance of the OTC sector as one of the main drivers for improving community health and reducing health costs.

The Reliability of Spanish and German Electricity Forward Prices. Databases and Price Discovery Process

Given the existence of different databases from different sources that offer information on forward electricity prices, the need to compare them arises to guarantee that research results and trading decisions based on them are not sensitive to the database used. We worked with forward electricity prices traded over the counter, closest month to maturity, covering the period from 2010 to 2016 for the Spanish over the counter (OTC) market, and from 2008 to 2016 for the German OTC market. The goal of this paper was to test whether there were significant discrepancies between the price series provided by two of the main agencies of financial information (Thomson Reuters and Bloomberg), as well as to analyze the existence of causality relationships between them, both in the long-term and in the short-term. As a first step, we obtained the data availability and the distributional characteristics of each of the price series offered by the mentioned financial information providers for the Spanish and the German electricity OTC market. Then we studied the lead-lag relationship between two price series, previously chosen as representative of those provided by Thomson Reuters and Bloomberg, to ascertain if there are any leading databases that may systematically anticipate information with respect to the others.

What is the Impact of Introducing a Parallel OTC Market? Theory and Evidence from the Chinese Interbank FX Market

Chinese Interbank Foreign Exchange trading was originally conducted through a centralized, anonymous limit order book (LOB). We determine the impact of the introduction of a parallel decentralized over-the-counter (OTC) market. We find that: (1) most trading migrated to the OTC, (2) the LOB price function is upward-sloping versus the OTC price function is downward-sloping, and (3) the LOB market has a single price function versus the OTC market has multiple price functions. Next, we develop a theoretical model of parallel markets that can simultaneously explain all of these empirical findings. We test a new model prediction and find support.

Zero‐intelligence versus human agents: An experimental analysis of the efficiency of Double Auctions and Over‐the‐Counter markets of varying sizes

AbstractWe study two well‐known electronic markets: an over‐the‐counter (OTC) market, in which each trader looks for the best counterpart through bilateral negotiations, and a double auction (DA) market, in which traders post their quotes publicly. We focus on the DA–OTC efficiency gap and show how it varies with different market sizes (10, 20, 40, and 80 traders). We compare experimental results from a sample of 6400 undergraduate students in Economics and Management with zero‐intelligence agent‐based simulations. Simulation results show that the traded quantity increases with market size under both DA and OTC. Experimental results confirm the same tendency under DA, while the share of periods in which the traded quantity is lower than the efficient one increases with market size under OTC, ultimately leading to a DA–OTC efficiency gap increasing with the market size. We rationalize these results by putting forward a simple model of OTC market as a repeated bargaining procedure under incomplete information on buyers' valuations and sellers' costs. We show that efficiency decreases slightly with size due to two counteracting effects: acceptance rates in earlier interactions decrease with size, and earlier offers increase, but not always enough to compensate for the decrease in acceptance rates.

Pravna regulativa trgovine OTC (over-the-counter) finansijskim derivatima

Author explains legal regulation of OTC financial derivative trading on the leading financial markets (USA and EU) as well as shows uniform regulations developed in international legal environment, and separately explains legal framework of the said question in positive Serbian law. Author elaborates main current legal issues related to financial derivatives transactions on the OTC market to which domestic participants are exposed during the operations in Serbian territory but also in cross-border operations. Finally, the author provides concrete proposals for further improvement of disputable legal issues by amending the regulatory framework in line with comparative legal regulations and regulations developed by the international community. Purpose of this article is to bring the attention of legal experts in Serbia to certain inefficient solutions in currently applicable legal regulations related to financial derivatives on the OTC Market, as well as to serve to legal practice as guidance for practical solving the disputable legal issues in particular transactions which have become frequent also for domestic participants on the capital market.

Asymmetric information risk in FX markets

This work studies the information content of trades in the world’s largest over-the-counter (OTC) market, the foreign exchange (FX) market. It analyzes a novel, comprehensive order flow data set, distinguishing among different groups of market participants and covering a large cross-section of currency pairs. We find compelling evidence of heterogeneous superior information across agents, time, and currency pairs, consistent with the asymmetric information theory and OTC market fragmentation. A trading strategy based on the permanent price impact, capturing asymmetric information risk, generates high returns even after accounting for risk, transaction cost, and other common risk factors shown in the FX literature.

What is the impact of introducing a parallel OTC market? Theory and evidence from the chinese interbank FX market

Chinese interbank foreign exchange trading was originally conducted through a centralized, anonymous limit order book (LOB). We determine the impact of the introduction of a parallel decentralized over-the-counter (OTC) market. We find that: (1) most trading migrated to the OTC, (2) the LOB price function is upward-sloping versus the OTC price function is downward-sloping, and (3) the LOB market has a single price function versus the OTC market has multiple price functions. Next, we develop a theoretical model of parallel markets that can simultaneously explain all of these empirical findings. We test a new model prediction and find support.