Friday, October 14, 2016

The Broken Disability Safety Net

Much has been said and written on the topic of the recent report from the US Department of Labor regarding the supposed inadequacy of the workers' compensation system.  Critics rightly point out that the report appears to reduce its own credibility by failing to exhibit a sufficient understanding of the system, by assuming that all people claiming to be disabled are actually disabled, and by frightening those who believe that the federal government's involvement in any endeavor dooms all of planet Earth to utter destruction.

To paraphrase Twain, though, reports of the death of the state-based work comp system have been greatly exaggerated.

Nevertheless, those who dismiss this report based solely on its well-deserved criticism are clearly missing the broader picture.  There is a fundamental problem in this country with disability management and the public safety net that supports it.  And when the public safety net is perceived as inadequate, the most politically expedient solutions are to neither generate revenue (i.e., raise taxes) nor to reduce expenses (i.e., cut benefits); rather, the first solution is to look for an exogenous entity to blame and from which, if luck prevails, to extract rent.  In this case, the federal government has found at least one scapegoat: workers' compensation.

And not without cause, mind you.  The relationship between work comp and Social Security Disability Insurance (SSDI) is ill-defined, but we know from an analysis of past and present "off-set payments" (wherein an individual receives payment from both work comp and SSDI) that of those currently receiving SSDI, a little over 12% of them have also received work comp payments.  While those payments are material (on the order of perhaps $10 billion of the total SSDI spend of $145 billion), this analysis fails to address the larger issue: how many SSDI recipients could have filed a work comp claim, but never did?  That's a much bigger number.

One alarming, but nonetheless informative, statistic regarding the SSDI population showed up in the May 2016 edition of Health Affairs.  If you've heard me speak on a blogger panel this summer or fall, you've heard me talk about this.  The graph below shows spending on opioids by the Medicare and Medicaid programs between 1999 and 2012.  The purple line should jump out at you... it represents opioid spending for the Medicare population that is under 65 years of age.

This is effectively the SSDI population (disabled people under 65 receive indemnity payments from SSDI and healthcare coverage from Medicare) and we're spending more than $1 billion of tax dollars per year on their opioids.  This group is about one-fifth the size of the over 65 cohort, yet we're spending more on opioids for them.  On a per person basis, opioid spend for those over 65 is $192 per year.  For the 45-65 cohort covered by Medicare (an approximation for SSDI), it's $683 per year... or nearly 4X more.  Interestingly, the opioid spend covered by private insurers for those aged 45-64 is $274/year and for Medicaid it's $251/year.  

So what the heck is wrong with the Medicare group aged 45-64?  They're disabled, that's what's wrong.  And there's the rub.  If you think it's difficult to track, measure, manage, and mitigate opioid use in work comp, it's comparably impossible today within the SSDI population.

A broken disability safety net is a dangerous political phenomenon - one we should take seriously and treat with the respect it deserves.  

On Twitter @PRIUM1

Monday, October 3, 2016

The Guts to Buck the Lobbyists

Ohio has proposed something novel: Let's not pay for expensive naloxone prescriptions and instead invest resources in ensuring the delivery of appropriate medical care and provide help for those struggling with dependence and addiction.

The Ohio BWC's Pharmacy and Therapeutics Committee recently recommended that BWC stop paying for auto-injector pens of naloxone.  While BWC would still cover the less expensive nasal inhalation form of the opioid overdose antidote, the auto-injector pens have become prohibitively expensive (apparently, BWC recently rejected a bill from a single Florida pharmacy for $824,000 worth of naloxone auto-injector pens supplied to 208 injured workers - that's an average of nearly $4,000 per injured worker).

Instead, BWC has put controls in place to ensure that reimbursement for opioid medications is limited to instances in which best practices are being followed.  And they're willing to pay for treatment for opioid dependence for up to 18 months, including two failed attempts at recovery.

So here we have a state significantly curtailing opioid use, providing a cost-effective version of an overdose antidote, and paying for opioid dependence treatment where necessary.  

Before you dismiss Ohio's efforts as impractical in a non-monopolistic state, take a step back and ask yourself whether this isn't a rational, measured, clinically responsible series of measures that will actually promote injured worker health, wellness, and recovery?  If it is, then why isn't it practical in your state?

I think Johnnie Hanna, pharmacy program director at BWC, summed it up: "If they've got the guts to buck the lobbyists... they can get these things done."

It is said that discretion is the better part of valor.  Except, I would suggest, when it's not.  Why aren't you doing these things in your state?

Do you have the guts?

On Twitter @PRIUM1

Monday, September 26, 2016

The Solution to Every Healthcare Debate: Access vs. Cost

Two things you need to know about Suboxone (or buprenorphine) this morning highlight the essential elements of all past, present, and future healthcare debates.

First, the manufacturer is being sued by the Attorney General of Illinois (and 35 other AGs) for violation of antitrust statutes.  The states allege that Reckitt Benckiser Pharmaceuticals (now known as Indivior, because someone clearly new to marketing thought that would actually be easier to say) has effectively blocked generic competition for Suboxone by scheming to devise a new formulation (the film, an upgrade from the pill) in order to extend the patent protection of its franchise.  Believing, of course, that they are more sinned against than sinning, Indivior took to their web site to issue a statement that they will vigorously defend themselves against the charges.  I'm not sufficiently informed to weigh in on the merits of the suit.  I'll just point out that the company's actions are fairly typical of pharmaceutical companies and that were this a cholesterol medication instead of a potential addiction mitigation drug, I'm not sure we'd see this much attention paid to it by 36 state attorneys general.

Second, current physician capacity for treating opioid use disorder with Suboxone isn't being utilized.  A research letter published last week in the Journal of the American Medical Association shows that despite initial limits on the number of patients a certified physician may treat at any one time of 30 and subsequent limits (after 1 year of prescribing) of 100 patients, these doctors are treating numbers of patients far below those thresholds.  In the 7 states with the highest number of certified physicians, the monthly median patient census per doctor was found to me as follows:

  • California: 7
  • Florida: 11
  • Massachusetts: 22
  • Michigan: 7
  • New York: 11
  • Pennsylvania: 18
  • Texas: 10
Increasing the number of certified prescribers and the number of patients they may treat at any one time is a linchpin of the federal government's response to the prescription opioid epidemic.  So it's somewhat concerning that we're so focused on increasing capacity when we're clearly not even close to utilizing the capacity we have.  

Why is this?  Why the law suit?  Why the lack of utilization of existing capacity?  

Like every other debate in healthcare, when you peel back the onion far enough, you find two competing philosophical concepts that dictate nearly every public policy decision that confronts us: COST and ACCESS.  

The law suit is primarily about COST and secondarily about ACCESS (presumably, if a more affordable - read 'lower COST' - generic were to become available, more patients could potentially ACCESS therapy).  

The JAMA study is about ACCESS and it shows that despite our investment in capacity (which COSTS money), we're still not very good at ACCESS itself.  

Follow the money.  Follow the patients.  The solutions to all healthcare issues rest somewhere in the incentives, structure, and balance of the two.  

On Twitter @PRIUM1

Monday, September 19, 2016

Bad Pharma: This is What We're Up Against

We all know that lobbyists exist.  We all know the role they play in American politics, however frustrating that fact might be to us.  We all know that pharmaceutical companies have plenty of them and they appear to be pretty good at their jobs.

But thanks to some great work by the Associated Press, we now have a better sense for the magnitude of malfeasance that has occurred over the last 10 years in the halls of state capitol buildings, the US Congress, the White House, and our federal regulatory agencies.

The articles are here and here and I recommend reading both in full. For those crunched for time, some highlights I found particularly disturbing (in form of "what we've known" and "what's new"):

We've known for quite some time that there are a lot of dollars and a lot of brains devoted to maintaining the top line revenue of pharma companies operating in the pain space.  We now know:

  • They spent $880 million over a 10 year period from 2006-20015
  • This amount is 8 times the amount the gun lobby spent in the same period (read that again... just for emphasis)
  • $140 million of this went directly to political campaign contributions, $75 million of which went to candidates for federal office
  • Various advocacy groups employed an average of 1,350 lobbyists per year in state capitols across the country
We've known for a while that there were hidden forces behind the scenes attempting to squash public policy initiatives intended to stem the tide of prescription drug misuse and abuse.  We now know:
  • Back in 2012, when New Mexico came close to becoming the first state to limit initial opioid scripts to seven days, lobbyists got in the way.  "The lobbyists behind the scenes were killing it," said Bernadette Sanchez, a Democratic state senator who sponsored the measure.  We celebrate what New York and Massachusetts have done just this year, but forget that New Mexico tried it four years ago.  In the interim, we continued down the primrose path of opioid over-prescribing.  How many preventable deaths occurred between then and now? 
We've seen influence exercised among federal regulatory agencies, particularly at FDA. Former FDA Commissioner Margaret Hamburg consistently spoke about the need to balance access to pain medication for those in need with the public health crisis that is the prescription drug epidemic.  In so doing, she often referenced the 2014 NIH report that suggested 100 million Americans suffered from chronic pain.  We now know:
  • The Pain Care Forum (aka, the lobbying group backed by pharma) spent nearly $19 million on lobbying efforts that led to the legislation requiring the creation of this NIH report
  • Almost half of the report authors had served as leaders of groups affiliated with the Pain Care Forum - all of which were supported by pharma dollars.  
We all witnessed the controversy regarding the CDC guidelines earlier this year.  While the federal government's public health agency worked to develop guidelines for opioid prescribing among primary care physicians, other groups within the federal government were not only questioning the CDC's process and conclusions, but also going so far as to call the draft version of the guidelines "horrible" and "shocking."  Who were these critics?  We now know:
  • Dr. Richard Payne, who voiced concerned about conflicts of interest within the CDC advisory group, was himself paid over $16,000 by Purdue Pharma (makers of Oxycontin) for meals, travel, and speakers fees
  • Myra Christopher, another vocal critic of the CDC who openly stated that her NIH committee could not support the CDC guidelines, is a long time participant in the Pain Care Forum and holds a chair at the Center for Practical Bioethics - a chair endowed via a $1.5 million gift from Purdue Pharma.  
The most effective lobbying efforts come not as obvious broadsides with clear agendas and transparent motives.  Rather, the most effective efforts come with the trappings of genuine concern and the suits of science.  And that's what makes them scary.

On Twitter @PRIUM1

Monday, September 12, 2016

Market Failure and Medications: The Consequences of Healthcare Economics

I have a friend who happens to be an economist.  He's a really (really) smart guy and I value his views on everything from parenting to high finance.  So when he struck up a conversation about a recent blog post of mine that covered the intersection of drug prices and basic economic principles, I was all ears.  

"You haven't identified the market failure," he said.  

I was caught a little off guard.  I needed a moment to recall the specific definition of "market failure." It's not what most people think.  If the average person hears the term "market failure," they're likely to believe the S&P 500 dropped precipitously that day.  But when an economist uses the term, he means that the supply and demand dynamics of any given market have failed to reach a market clearing price.  The market could be for guns, butter, iPhones, or medications.  Doesn't matter. Buyers are unwilling to buy, sellers are unwilling to sell.  The market isn't working.  It has failed to produce transactions of any kind.     

My friend's point was that the market for naloxone was still functioning.  Buyers were complaining vociferously (in the press, to Congress, to manufacturers, etc.) but naloxone was still being bought and sold.  Howls of protest are one thing, he was saying, but the market still looks like it's working - albeit at a significantly higher market clearing price than a few years ago.  

From a purely economic perspective, he's exactly right.  But this isn't "pure" economics.  This is healthcare economics.  And the difference isn't that we in healthcare don't get it, it's that we have to get it sooner... because the stakes are much higher.  

In my original blog post, I told the story of my son Will and his experience with the supply and demand of chocolate.  I pointed out some of the differences between his experience selling Hershey bars to 1st graders and the pharmaceutical companies raising prices of medications like naloxone.  But there's one difference I did not identify in that original post and it's critical to understanding the current public discourse around naloxone and EpiPens and other medications whose price has risen substantially as of late.  

If Will's market for chocolate fails, then kids neither buy nor sell chocolate.
If the market for EpiPens fails, a kid dies.  

Overly dramatic?  Not in the least.  If access to potentially live saving medications is inhibited by market failure, then preventable death is not only a possible consequence, it's a probable one.  Those of us who work in this space have to anticipate market failures and prevent them from happening. We cannot sit back and wait for the market to fail and then act to correct it.    

Economics is different in healthcare for lots of reasons (government participation in price setting, employer-based health coverage, third party payers, just to name a few), but ultimately, what makes the domain of healthcare economics so unique is that it carries life and death consequences at every turn.  What's past is prologue... and we have to get it right.    

On Twitter @PRIUM1

Wednesday, September 7, 2016

FDA and Off-Label Drug Use: Danger Ahead

The FDA has scheduled hearings for November (and a public comment period that will extend to January) regarding the agency's current approach to the marketing of off-label uses of FDA-approved medications.  Drug and device manufacturers have been waiting years for this opportunity to change the agency's stance on off-label marketing.  

This is not good news.    

First, a definition: Drugs approved by the FDA are approved only for the specific conditions for which they were tested in clinical trials conducted by the manufacturer.  These approved medications have an FDA "label" which stipulates those conditions for which the drug has been approved.  FDA approval, however, does not govern the practice of medicine.  Doctors are free to prescribe FDA approved drugs for conditions not included on the "label" (thus, off-label use of FDA approved drugs).  While the practice is common among doctors, pharmaceutical and medical device companies are restricted from "marketing" off-label uses of drugs.    The 1938 Food, Drug, and Cosmetic Act gave the FDA the power to regulate promotional materials on medications and to this day, they do. Very closely.  

Second, some basic statistics:
  • 1 in 5 medications prescribed today is for off-label use. (Example relevant to you: tricyclic antidepressants do not have FDA approval as a treatment for neuropathic pain, yet this class of drugs is considered by many physicians to be a first-line treatment option.) 
  • In recent years, antipsychotic drug use for unapproved FDA indications has increased. One study estimated that the cost of off-label antipsychotic drug use in 2008 was $6.0 billion.
  • The fines connected to illegal off-label marketing by pharmaceutical companies appear material (though this is debatable in light of the annual sales of some of these drugs): 
    • 2009: Eli Lilly paid $1.4 billion off-label marketing of olanzapine for dementia
    • 2009: Pfizer paid $2.3 billion for alleged off-label marketing of 4 of its medications
    • 2012: GSK paid $1.3 billion for off label marketing of paroxetine
    • 2012: Abbott paid $1.6 billion for off label marketing of valproic acid 

So here's the core question: Should the FDA allow pharmaceutical and medical device companies to market to doctors off-label uses of medications?

In a word, no.  But let's dig a little deeper into the argument the pharma companies are making.

Their position is summed up best by the quote in the Bloomberg article (linked above) from Deborah M. Shelton, deputy general counsel for healthcare at the Biotechnology Innovation Organization (BIO):  “Removing current regulatory barriers, and clarifying the ability of companies to share truthful and non-misleading information [emphasis added] about medicines, is essential to our collective ability to realize the full potential of 21st century medicines and helping to ensure that patients are able to get the right medicines at the right time for them,” 

Two key words here: truthful and non-misleading.  Leaving aside that the use of both terms appears redundant, we're still left the the fundamental question of who decides what is truthful and non-misleading.  

We have three choices available to answer that question: the FDA, the drug companies, and broad clinical experience.  

The FDA seems like the most logical answer.  They approved the drug in the first place, why can't they be responsible for approving additional indications (or uses) of that same medication?  The reply from the drug companies to this idea is understandable: it's really expensive.  The FDA requires a similar level of data and similar level of rigor from clinical trials to approve an additional indication as they do to approve the initial indication.  In many cases (though not all), the costs are clearly prohibitive.  

The drug companies cannot be trusted to decide what's truthful.  If you can't see the obvious conflicts of interest here, then you should stop reading.  You're not worth another word.    

Broad clinical experience, or the general body of knowledge developed as a result of actually practicing medicine, is a valuable source of information and the means by which some portion of off-label prescribing comes to occur in the first place.  When such knowledge is documented in well-respected, peer reviewed journals, the medical community gains a trusted and codified source that might prove valuable to other clinicians.  But how to get that information disseminated?  Could the pharma companies do that?  Isn't that what they're asking for here?  To relay "truthful and non-misleading information" to doctors about off-label uses of medications?  

Here's the thing: they can already do that.  From the Mayo Clinic's article by Chistopher Wittich, et al [emphasis added]: "The 1997 FDA Modernization Act allowed manufacturers to distribute to health care providers peer-reviewed journal articles about unapproved uses of medications.  If a given drug company chose to engage in distribution of this type of information, it was required to submit an application for approval of that indication within a rigid and pre-specified period. These requirements were subsequently revised in 2009 with the approval of new FDA guidelines. The new guidelines clarified existing rules and allowed distribution of information on off-label uses by pharmaceutical manufactures if specific regulations were followed.  After 2009, pharmaceutical manufacturers could distribute information, including journal articles and textbook chapters, describing unapproved uses for their medications. The FDA demanded that the information in these... publications be accurate, the relationship between the distribution of information and the sponsoring drug manufacturer be disclosed, and the published material not be edited or presented in an abridged form. In addition, the manufacturer is no longer required to submit an application for approval for that indication."

Sounds reasonable to me.  What do the drug companies want to be able to do beyond this?  Makes me very, very nervous.  

On Twitter @PRIUM1

Monday, August 29, 2016

Standing Orders: Are You Prepared?

The Missouri PDMP watch goes on... I think CNN should have a clock for it.  Instead of counting down to an event, the clock would continually count up, marking the years, months, days, hours, and minutes since Missouri became the only state without a law creating a Prescription Drug Monitoring Database.  For the record, the District of Columbia enacted its own PDMP legislation on Saturday, February 22, 2014.  So by my count, the clock would read: 2 years, 6 months, 7 days, 10 hours, 59 minutes, 32 seconds... 

But the state did make some progress recently.  Missouri HB 1568 creates a "standing order" for naloxone.  There's a legitimate debate regarding standing orders for naloxone, but regardless of where you stand in that debate, there's little doubt we're going to see more and more of these across the country.  So let's establish some definitions and pose some interesting questions for the payer community.

First, looking up "standing order" in an average dictionary isn't terribly useful.  We're looking for a clinically oriented definition and I found the best one at
"a written document containing rules, policies, procedures, regulations, and orders for the conduct of patient care in various stipulated clinical situations. The standing orders are usually formulated collectively by the professional members of a department in a hospital or other health care facility. Standing orders usually name the condition and prescribe the action to be taken in caring for the patient, including the dosage and route of administration for a drug or the schedule for the administration of a therapeutic procedure. Standing orders are commonly used in intensive care units, coronary care units, and emergency departments."
Translation: Pre-approved treatments that can be dispensed and administered by non-physicians because a doctor said it was ok ahead of time.

The language in Missouri is indicative of what we're likely to see elsewhere: "Notwithstanding any other law or regulation to the contrary, any licensed pharmacist in Missouri may sell and dispense an opioid antagonist under physician protocol" and "Notwithstanding any other law or regulation to the contrary, it shall be permissible for any person to possess an opioid antagonist."  Additonally, the bill also contains language that relinquishes pharmacists from any liability associated with dispensing naloxone as well as protection of individuals who administer naloxone.  This is an important component of any legislation in this area.

Translation: Want naloxone?  Show up at a pharmacy in Missouri with some money and you can have some.  No questions asked.  And no one is going to get arrested or sued for dispensing or administering the drug.  

But this begs several important questions for the work comp payer community.

First: How much is naloxone going to cost?  Are we talking generic syringes?  Or EVZIO auto-injector pens?  This "standing order" in Missouri spells out the ingredient a patient can obtain, but not any preferred form of administration.  Notably, the cost of this stuff is skyrocketing.

Second: Who is going to pay for this, ultimately?  If an injured worker pays for EVZIO pens out of pocket via a standing order, will he submit for reimbursement to the employer/carrier?  How will this be handled?

Third: Will we submit this to utilization review?  Are the guidelines sufficiently thorough to cover this type of scenario?  (I can answer that one, actually: no, they're not).  So where does that leave us? Do we really want to deny payment and then have the unthinkable happen?  Imagine the headlines. "Work Comp Screws Up Again: Injured Worker Dies of Overdose After Employer Denies Payment for Life Saving Antidote."

No one wants that.  But we also want to ensure we're addressing the underlying issue.  Why do we have injured workers on sufficiently high doses of opioid medications that the patient (or, likely, a loved one) feels the need to take advantage of a "standing order" and obtain naloxone from the local pharmacy?

Which brings us to a fourth question: Does the employer have an obligation (ethically, not necessarily legally) to inform the prescribing physician that the injured worker has obtained naloxone via a standing order?  "Hey doc, just thought you'd be interested to know... Injured Worker Joe?  Yeah, his wife just picked up a pack of two EVZIO pens at Walgreens.  We're going to reimburse them the $800, but thought you might interested in your patient's perception of overdose risk."  That's a pickle: the reality is that the adjuster may be the only one that knows about both the opioid scripts and the naloxone secured via a standing order.

Unintended consequences abound.

Follow me on Twitter @PRIUM1

Tuesday, August 16, 2016

Health Literacy and Pain Management: How to Do Patient Education

Whether or not opioid pain medication might actually worsen pain is a legitimate clinical discussion and an important claims management topic.  While the phenomenon is researched and written about in medical journals, talked about at various conferences, and acknowledged among physicians, I had not yet seen a committed attempt by a state regulator to educate injured workers about what might be happening to them.

And then New York State Workers' Compensation Board published this gem.  The brochure was developed in cooperation with the New York State Office of Alcoholism and Substance Abuse Services (smart move by the WCB) and posted on the "Workers" section of the website under the link "Pain Medication Dependence Fact Sheet."  

The brochure is appropriately titled: "Is My Pain Medication Making Me Worse?"

The brochure starts with the story of Jim, a 55-year-old construction worker with a low back injury who is prescribed pain medication... and experiences a steady decline in functionality and engagement.  It also includes a list of common medications, a phone number to call for help, a list of common side effects, a phone number to call for help, a list of FAQs, and last, but not least... you guessed it, a phone number to call for help.  The number appears multiple times in multiple locations on a relatively simply brochure.  And that's the point.    

Educational pieces like this are harder to create than you might think.  I recall when PRIUM created our own injured worker education piece (which you can download and use for free here).  I was so proud of the first few drafts.  I thought we had nailed it.  Then our Medical Director, Dr. Pamela Thomas, got a hold of it.  She tore our draft to shreds.  

Dr. Thomas is an expert in health literacy.  She helped us understand that patient education messages have to be aimed at the lowest common denominator.  Too many big words, too many messages, too much clinical language, too few attempts to engage at the patient's level... all lead to poorly executed patient education materials.  Which is not to say that all injured workers require reading materials at a remedial level.  But the reality is that some do and good patient education ensures that the maximum number of patients can comprehend the information being conveyed.  These things are hard to put together.  

I give the New York piece one and half "thumbs up" (a couple of infographics for visually-geared learners would have taken taken it all the way to two thumbs up).  The fact that they published this at all is fantastic and the bold title (Is My Pain Medication Making Me Worse?) is engaging, educational, provocative, and appropriate - all at the same time.  

Well done, New York State Workers' Compensation Board.  
Now... where is every other jurisdiction on injured worker pain management education?  

On Twitter @PRIUM1

Tuesday, August 9, 2016

So Why is Naloxone Getting So Expensive?

Last week, I posted a piece on the public health debate around naloxone.  Since then, I've received a stream of new and interesting data to share.  

First, a report showing that naloxone scripts led to fewer ED visits... of the 2,000 patients in this study focused in safety-net clinics around San Francisco, those receiving naloxone along with long-term opioid prescriptions had 47% fewer visits to the emergency department.  That appears to be compelling evidence to suggest co-prescribing naloxone makes sense (though the focus on the safety net clinic population begs the question of how translatable the conclusions might be to other populations).

We also saw the release of a white paper from Fair Health that suggests diagnosis of opioid dependence is skyrocketing.  Fair Health is a non-profit organization dedicated to transparency in health care costs.  They analyzed their database of 20 billion privately insured healthcare claims and found a 3,203% rise in opioid dependence diagnosis between 2007 and 2014.  So maybe we need to focus more on the underlying issue of opioid dependence after all?   

Third, the price of naloxone is rising... this excellent an in-depth piece from Business Insider details the controversy surrounding the price increases.  Out there in social media land, I've seen several comments regarding the price increase that indicate a basic understanding of microeconomics, but that lack the depth necessary to understand what's happening here.  "Demand has gone up," read many of these comments, "so price goes up, right?"

Not necessarily.  A personal story to illustrate the point:     

Some of you have heard me tell one of my favorite “Will stories".  Will is my 10 year old and the kid is a natural entrepreneur.  Back when he was in 1st grade, his school had an activity called Economics Day.  Each of the six 1st grade classrooms in Will's school had to make a simple product and then sell it to their peers in an open “marketplace” (which, in this case, was a series of tables in the school gym).  One class made puppets out of brown paper bags.  Another class made pet rocks.  One class did the classic lemonade stand.  Will’s class made “S’more packs” (two graham crackers, a marshmallow, and a small Hershey’s chocolate bar all in a small plastic sandwich bag).  Each kid had earned “money” to spend through good behavior and acts of service to others over the course of the semester. 

All the first graders gathered in the gym and awaited the signal from one of the teachers.  When she blew her whistle, nearly all of the children would begin freely “shopping” the various tables of merchandise around the gym.  Only a small group of students from each class would remain at their respective “cash registers” to do the actual selling.  William volunteered for this duty first.  While everyone else shopped, Will would be in charge of selling his class’s S'more Packets.  I stood behind him and made sure order was maintained.  Easy duty… or so I thought.

The whistle blows.  Nearly every kid in the gym makes a run for Will’s table.  There’s chocolate there, right?  The kids who don’t run for the chocolate instead go for the lemonade.  The Pet Rock and hand puppet kids are immediately bored.

Suddenly, Will finds himself in the middle of an old fashioned Wall Street trading pit.   He’s surrounded by kids, each holding out $5 of play money and shouting for chocolate.  Initially, Will is collecting money and handing out ‘Smore Packets just as he’s supposed to do. He’s happy his class’s product is popular and he’s clearly grateful for the business.  But as the crowd thickens and the kids grow louder, I begin to notice what Alan Greenspan once called “irrational exuberance.”  The kids are frantic.  Markets are psychological and this one is getting crazy.  Kids are elbowing for position.  They’re screaming Will’s name in an attempt to get his head to swivel in their direction, potentially increasing the probability they’ll be the next to walk away with chocolate.  He’s getting bumped, jostled, and hit.  I’m getting worried about him and I wonder if he’s going to lose it under the pressure.  Should I step in?  Be an adult?  Organize this chaos?  It’s getting out of control…

And at that moment, Will did something both courageous and, to him, completely logical.  Without permission from his teacher, without encouragement from me, without any warning at all…

He raised the price.

“These aren’t $5 anymore,” he yelled over the din, “they’re $10!”  Only a few kids drop out of the crowd.  The rest simply reach into their pockets and pull another $5 of play money out to add to the $5 they’ve already been waving in Will’s face.  He sells a few packets at $10 and realizes he can go higher.  “Now they’re $15!” he yells.  I glance over at his teacher, Ms. Foster, who takes one step toward Will.  I can see she’s a little unsure of what to make of this scene and I have a moment of panic that she’s going to shut down the most perfect example of an efficient market I’ve seen in my life.  Then she pauses, steps back, looks at me, and smiles.  Thank goodness, I think, she gets what’s happening.  This is Economics Day… and these kids are learning economics!

Little did anyone know that the laws of supply and demand would be as intuitive to Will as eating, sleeping, and breathing are to you and me.

By the time I turn my attention back to Will, he’s at $30 and the flow of ‘Smore Packets into the greedy hands of first graders is starting to ebb.  He senses he’s neared the market price, the equilibrium between supply and demand.  This is what economists call it, economists who have studied this phenomenon and only this phenomenon, for longer than Will’s been alive.  To Will, though, there are no fancy terms or theories.  There’s just a point, he says later, that “felt right.”

So how do pharma companies justify jacking up the price of naloxone?  It’s just supply and demand, right?  What’s the big deal? 

Here’s the key difference: Will had a finite supply of chocolate.  Once it was gone, it was gone.  When supply is fixed and demand rises, price increases.  But that’s not true of naloxone.  This stuff is easy to make and has been around for 40 years.  When demand rises (and it certainly has), supply should increase commensurately and price should remain relatively stable over the long term.  That’s how economics works.  Anticipating objections from the "econ major" crowd who will argue we're experiencing a "shift in the demand curve" for naloxone (which is different than a simple increase in demand), I would argue that a commensurate shift in the supply curve is not only possible, but easily achievable given the nature of the underlying molecule.  

"We're not talking about a limited commodity. Naloxone is a medicine that is almost as cheap as sterile sodium chloride — salt water," said Dan Bigg, the executive director of the Chicago Recovery Alliance.

Unless you’re a pharma company.  Then you get to smile and smile... and be a villain.  You get to exploit the average American's lack of understanding of microeconomic theory and suggest that a rise in demand logically leads to an increase in price. 

Supply and demand, right?   

On Twitter @PRIUM1

Monday, August 1, 2016

Nuance is Necessary in the Naloxone Debate

American Medical Association white paper headline: "Help save lives: Increase access to naloxone"
New York Times headline: "Naloxone Saves Lives, but Is No Cure in Heroin Epidemic"

These headlines aren't inconsistent, but they do hint at the evolving national dialogue around naloxone.  I would say there's a debate brewing around the appropriateness of naloxone access, but the truth is that the debate isn't new - it's been going on for decades.  What makes it feel new to many of us is that the prescription drug and heroin epidemic is pushing our medical and public health professionals to more aggressively pursue any and all possible solutions at our disposal. And with every solution comes a critique.

Let's start with a few basic facts:

  • Naloxone was approved by the FDA in 1971.  
  • Naloxone is an opioid antagonist, which means (in layman's terms) that the drug kicks opioids off of the receptors in the brain and replaces them, eliminating the "high" and reviving the patient (and also sending them into immediate withdrawal).
  • Naloxone works quickly (approximately 2-3 minutes) and its effects last between 30 and 90 minutes depending on the type of opioid that was used; sometimes, more than one administration of naloxone is necessary to reverse an overdose.  
  • There is virtually zero potential for abuse of naloxone and virtually zero effect on an individual given naloxone who is not experiencing an overdose.  
  • Naloxone comes in various forms: generic via syringe, branded injector pens (EVZIO), nasal spray (Narcan or naloxone w/ atomizer).
Now to the debate, literally an existential one at that (you might say naloxone is the "to be or not to be" drug... that is the question...)   

There are many (Centers for Disease Control, American Medical Association, Substance Abuse and Mental Health Services Administration, American Society of Addiction Medicine) who support widespread access to naloxone.  According to the CDC (and quoted in the AMA's white paper), from 1996 to 2014, the lives of more than 26,000 people were saved by naloxone.    

There are others who express concern that widespread access to naloxone will give addicts a safety net, encouraging risky behavior.  Governor Paul LePage (R) of Maine, never shy and certainly never concerned about causing offense, summed up the argument this way (in light of his veto of naloxone-related legislation): "Naloxone doesn't truly save lives; it merely extends them until the next overdose.  Creating a situation where an addict has a heroin needle in one hand and a shot of naloxone in the other produces a sense of normalcy and security around heroin use that serves only to perpetuate the cycle of addiction."  

As so often occurs in complicated policy debates, blanket assumptions and blunt statements lead to poor dialogue and lack of action.  So let's explore the nuance by segmenting the population of potential naloxone beneficiaries.  Note that this isn't the only way to segment the population nor is it the most detailed, but it's better than lumping everyone together.

1. First responders: Here, there is little debate.  First responders should be equipped with naloxone. They have a professional duty to save lives and naloxone will help them do that.  They are trained medical professionals and to withhold a vital life-saving antidote in the midst of a prescription drug and heroin epidemic is blatantly irresponsible.  

2. Drug abusers: Whether its prescription drugs or heroin, this is obviously a group at high risk for overdose. What Gov. LePage is missing in his inelegant portrait quoted above is that the person who overdoses will not be the one who administers the naloxone (having naloxone "in the other [hand]" doesn't do one any good if one is unconscious).  He also misses the reality that naloxone administration leads to immediate withdrawal - rather than experiencing "normalcy and security," the addict, while thankfully alive instead of dead, is thrust directly into hell on Earth.  

This segment of the patient population actually highlights two axes along which the debate takes place:  First, should drug abusers have access to naloxone at all?  Second, should we enable non-medically trained people (possibly fellow addicts) to administer the drug? If you believe in LePage's premise, that naloxone "merely extends [lives] until the next overdose," well, then... you are a cold and callous person who doesn't believe in the basic human aspiration toward redemption and recovery.  Might it be a long and hard road?  Yes.  Might there be relapses and multiple overdoses requiring naloxone?  Yes.  If it was your loved suffering from the addiction, would you want to give them every possible chance at recovery?  Yes.  As to whether non-medically trained people should be able to administer it... if I can give my kid an EpiPen injection when he gets stung by a bee, then I can administer naloxone.  No medical degree necessary.  
Thank goodness the Maine Legislature had the good sense to override LePage's veto, allowing Maine to count itself among the 34 states with a standing order for naloxone.   

3. Legitimate prescription drug users: This group is tricky.  These patients are under the care of a doctor, receiving legal prescriptions for opioids, and securing those medications at a pharmacy. I note there could be overlap between this group the group 2 (drug abusers), but this group has the benefit of a doctor overseeing their prescription regimen. The CDC and AMA guidance on naloxone prescribing among primary care doctors is fairly consistent.  A co-prescription for naloxone should be considered if the patient has a history of overdose, a concomitant script for a benzodiazepine, a history of substance use disorder, a mental health condition, or a medical condition that might make the patient susceptible to respiratory distress.  

But wait. Aren't these all the same factors that should cause the doctor to reevaluate the appropriateness of prescribing opioids at all?  Should a doctor manage the risk of overdose by prescribing an overdose antidote?  Or should the doctor be more diligent in exploring non-opioid alternatives first?  

This isn't just theory.  We're seeing it in PRIUM cases.  It's expensive, the cost is rising, and the benefit is unclear.  Surely, there are circumstances in which naloxone will be appropriate for co-prescribing (perhaps immediately post-injury or post-surgery when opioids are indicated for acute pain and the patient has a history of overdose, for example).  But the practice of co-prescribing naloxone for chronic pain patients is troubling.  

When it comes to high dose opioid therapy for chronic pain, we need to demand more from prescribing doctors than a "just in case" antidote.  Chronic pain care requires rigorous exploration of alternatives, difficult conversations with patients, careful management of medications, and a commitment to patient safety.  

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