Good news for investors of Impax Labs (NASDAQ: IPXL) turns out to be bad news for lots of other people, including injured workers and their families.
After a well publicized settlement back in 2010 with Endo, makers of the brand name version of Opana ER, Impax has begun shipping generic oxymorphone hydrochloride extended release tablets as of January 4, 2013.
Upside: As we all know, generics are cheaper.
1) The new formulation is not tamper-resistant. This actually creates two potential consequences: a) physicians who are aware of the fact that the new generic is non-tamper resistant may be less likely to prescribe it, therefore dampening the typical post-patent-expiration price drop of the drug; b) physicians who are not aware of the non-tamper resistant formulation - or choose to ignore its significance - will write scripts for the new generic, thus introducing a more dangerous and abuse-prone drug into the injured worker's treatment plan (and into the injured worker's home, I might add, where others may abuse or divert the drug).
2) The post-patent-expiration price drop can be a deceiving phenomenon for a work comp claim. Yes, the drug spend may go down. But is the patient improving? Does the introduction of the cheap generic opioid increase or decrease the likelihood of a positive clinical outcome? What additional medical expenses will result from the introduction of the generic opioid (side effects, exacerbation of co-morbid conditions, risk of dependence/addiction, etc)?
Cheap generics can be just as dangerous as expensive brands - don't take your eye off the ball.
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