Biopharmaceutical Report I
Proposed legislation across 23 US states to force payers to increase reimbursement of abusedeterrent (AD) opioids will likely face significant resistance due to state cost implications, most experts said. The state payerMedicaid- and private payers alike will likely argue that AD opioids do not currently have enough evidence to support the idea that they prevent abuse and addiction, experts added.
Some products approved with AD labelling include Teva Pharmaceuticals’ (NYSE:TEVA) Vantrela (hydrocodone bitartrate), Egalet’s (NASDAQ:EGLT) Arymo (morphine sulphate), Purdue Pharma’s Targiniq ER (oxycodone and naloxone extended-release tablets) and Pfizer’s (NYSE:PFE) Embeda (morphine sulfate and naltrexone).
Experts noted action to push any state legislation that would force access to more expensive AD drugs would directly impact the Medicaid budget, as Medicaid is one of the largest payers of opioid products. Thus only a few states at most will implement changes, most experts said. Private payers and patients would also balk at paying more, including higher premiums, as a result of insurers being forced to reimburse AD products, they added.
That said, two other experts were more optimistic on legislation prospects, considering the continued development of AD formulations. But others said only further data of benefit of AD opioids could sway states and payers in favour of increasing access to AD opioids, given abuse likely stems from diversion rather than misuse by the patients who are prescribed opioids.
State and payer costs prohibitive
Based on conversations with consultants, it is expected that only a few states will implement very strong legislation to force physicians to prescribe AD opioids, said Nikolaj Sorensen, CEO of Orexo, a Swedish company which markets opioid products for both pain and opioid dependence. The extraordinary cost increase of AD opioids compared to cheap generic formulations is one of the major blocks to passage for most states, explained Sorensen, with one consultant agreeing. AD opioids can cost as much as 10 times their generic equivalent counterparts, noted one pain expert.
"The extraordinary cost increase of AD opioids compared to cheap generic formulations is one of the major blocks to passage for most states"
One of the biggest hurdles to passage is the costs of AD coverage would be primarily absorbed by Medicaid budgets, with private health insurance companies also affected, explained Sorensen, the consultant and Bob Twillman, executive director, Academy of Integrative Pain Management, Lenexa, Kansas. Medicaid operates annual budgets, so longterm benefits from AD formulations, assuming they prevent overdose and addiction, are not helpful, noted Michael Barnes, chairman, The Centre for Lawful Access and Abuse Deterrence, Washington, DC. Also, there are cost implications to patients with private health insurance in that premiums would likely rise as a result of the increased cost to payers, added Sorensen. A patient with good intentions and who is unlikely to abuse or misuse opioids will object to paying higher premiums so legislation is likely to be unpopular, he noted. Payers will also object to paying more for a product if a patient is not abusing it, he explained.
Private health insurance companies are lobbying against any state legislation, using the argument that AD opioids are being advertised as safe when they still carry risks, which is a powerful and valid argument, said Twillman. Their lobbying is pretty persuasive to prevent legislation passage, he said. However, the legislation is being pushed by AD pharma makers, he added.
In California there was a bill that attempted to mandate at least one AD opioid be placed on formularies with no increased co-pay, however it was rapidly killed, said Jeremy Adler, senior pain management physician assistant, Pacific Pain Medicine Consultants, Oceanside, California. States such as New York and New Jersey vetoed potential legislation in 2016 due to cost and evidence concerns, though new bills may be possible, said Shruti Kulkarni, policy director, The Centre for Lawful Access and Abuse Deterrence, Washington, DC and the consultant. However, without a major political leadership change in New York, New Jersey and California, any new bills are likely to be vetoed again, noted Barnes.
In New Jersey, the governor that vetoed a bill to increase access to AD opioids, noted it would cost the state more than USD 11m each year, and there were limited data supporting the usage of AD opioids to prevent addiction, said the consultant. In Utah, the state Senate requested a cost/benefit analysis study which concluded that AD drugs should be subject to higher cost sharing given that limited data demonstrates the value of AD opioids, said the consultant. The Virginia state Senate has similarly requested a study on AD opioid coverage which is expected to conclude and provide recommendations imminently, he added.
Limited data for AD opioids
Despite other experts noting the difficulty of legislation passing, Kulkarni said she was more optimistic because the FDA is strongly encouraging generic manufacturers to make AD formulations which could have a positive impact on their uptake. Barnes agreed, adding that whilst at the moment there are only a few products on the market, the approval of more AD drugs would likely help create further competition and increase access. The AD market is growing with some recent FDA approvals such as Vantrela and Arymo, he said. There are also an additional 20-30 AD products in the clinical development pipeline, he said. One thing that would likely help swing the pendulum in favour of AD opioid coverage would be outcomes data showing AD products help reduce overdoses and addiction and thus there may be a better cost/ benefit ratio, noted four experts.
However, it may be difficult to get data to demonstrate AD opioids have a significant impact on abuse, as the majority of opioid abuse is as a result of diversion, said Adler. Physicians can assess patient records to determine addiction potential and prescribe AD opioids in those cases, but they cannot prevent medication from being stolen or diverted, he said.
One pain expert and Twillman noted that following Purdue’s OxyContin (oxycodone controlled release) change to an AD formulation, data shows its abuse dropped significantly. OxyContin is the only AD opioid with any real-world data supporting its efficacy in reducing abuse, the pain expert added. Considering the few AD options on the market, the ability to assess their effectiveness is limited, he said. Also, nearly all AD products are long-acting opioids, which account for only 3% of the total prescriptions for opioids, and most abuse occurs with immediate-release opioids, heroin and fentanyl, he explained.
Hamish has a BSc in Neuroscience from the University of Sussex and is primarily covering the neuroscience indications for BioPharm Insight. Prior to joining us he was assistant commissioning editor for a well-known collection of biomedical journals at Expert Reviews, including Expert Review of Gastroenterology & Hepatology, Expert Review of Clinical Pharmacology and Expert Review of Respiratory Medicine.
Fiona previously worked in France as a journalist at William Reed Business Media, covering global manufacturing, regulatory and outsourcing news for the biopharmaceutical industry. She has also reported on global food and beverage companies. Fiona holds an M.A. in English and a B.A. in English and Philosophy from Bristol University. She speaks English and French.