Tangled incentives push drugmakers away from opioid solutions

For the drug industry, building a better pain pill is a problem.

Pharmaceutical companies have introduced medicines to treat dependence, reverse overdoses and deal with opioid side effects. But few effective and economically viable alternatives to addictive painkillers have emerged from the laboratory.

That’s because of broken incentives, according to economists and industry experts. The payment policies of insurers and government health programs, along with pressure from investors, have encouraged drugmakers to treat the symptoms of the opioid epidemic but discouraged innovations that might get to the root of the problem.

New therapies for pain have generally been too expensive, too cumbersome to use, or targeted at too small a group of patients.

“There is nothing quite like a simple pain pill to solve a pain problem,” said Marvin Seppala, chief medical officer at Hazelden Betty Ford in Minnesota, which helps treat addiction.

Selling those simple pills was lucrative for years for drugmakers, wholesalers, pharmacies and other players. Opioids remain popular with doctors and the 125 million Americans who suffer from chronic pain; research firm Informa Pharma Intelligence expects sales to climb to $18.4 billion in 2020, a 25 percent increase from 2015.

Effort and expense

Most opioids are cheap generic drugs that have been prescribed for decades, making the effort and expense of developing new painkillers hard to justify.

“They’re off-patent, they can be produced by companies that aren’t the original inventors,” said Bertha Madras, a professor of psychobiology at Harvard Medical School and a member of President Donald Trump’s opioid commission. “It becomes a much more expensive proposition to develop and get the approval for an opioid.”

Drugmakers have instead invested in developing complex medicines for cancer and rare diseases, which can fetch six-figure price tags.

“Companies got out of the pain business,” said Pratap Khedkar of ZS Associates, a sales and marketing consultant who studies the pharmaceutical industry. “It’s not the hotbed of innovation.”

Pharmaceutical companies that have sought to bring new pain medications to market have mostly focused on patients with more acute needs, such as those who’ve had certain types of surgery or are suffering from conditions like arthritis.

Drugs in development

Many of the efforts to develop new painkillers have been hurt by experimental setbacks or still come with the risk of addiction.

Pfizer Inc. and Indianapolis-based Eli Lilly and Co. are developing an experimental nonopioid painkiller for osteoarthritis and chronic low back pain called tanezumab. Research was paused more than once over safety concerns, although late-stage testing is set to finish by the second half of 2018. The companies said that if approved, it would be the first in a new class of nonopioid pain drugs.

Nektar Therapeutics is developing an opioid that is designed to limit the euphoria patients feel when taking other painkillers — a major factor in driving addiction. It failed in early trial, but in March was found to have helped reduce patients’ chronic lower-back pain in a final-stage trial.

Some more successful new painkillers have been focused on smaller patient groups. Pacira Pharmaceuticals Inc.’s Exparel, a nonopioid designed to control pain following surgery, recorded $266 million in sales last year and is expected to top more than $300 million by 2018, according to estimates compiled by Bloomberg.

Two firms studying pain have earned highly coveted grants from the National Institute for Drug Abuse, part of the National Institutes of Health — but they still involve opioids.

Two other firms,  Ensysce Biosciences and Elysium Therapeutics Inc., have earned highly coveted grants from the National Institute for Drug Abuse, part of the National Institutes of Health. While the drugs they’re working on are meant to decrease overdose or addiction risk, the treatments still involve opioids.

“Irrespective how you make it, there is going to be the risk of developing abuse and addiction,” according to Stephen Delisi, a psychiatrist and addiction specialist at the Hazelden Betty Ford Foundation in Minnesota. “A person who is at risk for addiction is going to still be at risk to become addicted.”

Different incentives

The incentives to develop a better pain pill differ sharply from those in other areas of research, such as Alzheimer’s disease.

Drugmakers have spent billions on more than 100 failed medicines for Alzheimer’s, but a breakthrough would potentially reach a large and lucrative population of elderly patients on Medicare. Any new pain drug would be fighting it out with inexpensive, proven rivals in a politically fraught environment.

The White House Council of Economic Advisers estimated this week that abuse of opioids cost the economy about $504 billion in 2015, or nearly three percent of that year’s overall economic output in the U.S. Those costs include health-care expenses, spending on criminal justice and first responders, and lost worker productivity.

“There’s currently a lot more costs of addiction that are being borne by society in a more diffuse way,” said Kosali Simon, a health economist at Indiana University.

Attempts to design opioids that can’t be easily abused have done little to alter the market, and pushed some people toward illicit drugs such as heroin and synthetic fentanyl. Purdue Pharma LP reformulated its OxyContin painkiller to resist being crushed or liquefied — and thus harder to snort or inject — in 2010. That was followed by a marked increase in U.S. heroin overdoses.

“A readily available substitute was just kind of sitting there,” said David Powell, an economist at the RAND Corp. who co-wrote a paper on OxyContin.

Other medications designed to thwart manipulation have had safety issues. In July, Endo International Plc pulled its Opana ER from the market at the request of U.S. regulators, who said it helped worsen an outbreak of HIV among intravenous drug users.

Wary payers

Drug plans have been reluctant to pay for abuse-resistant pain medicines, which often cost more and can be more difficult to administer. A recent report from The Institute for Clinical and Economic Review, a not-for-profit that evaluates the value of prescription drugs, found that abuse-deterrent opioids weren’t cost-effective for insurers.

At the same time, payers are limiting patients’ access to older pain drugs. Cigna Corp. took OxyContin off its list of preferred drugs for 2018, though it still covers other opioids. CVS Health Corp. said its pharmacy-benefits management arm will limit prescriptions to a seven-day supply, and Express Scripts Holding Co. also said it would curb prescriptions.

That leaves patients with a difficult choice. Abuse-deterrent painkillers might cost as much as $250 out of pocket. But generic opioids cost as little as $2, according to Denis Patterson, a pain specialist in Reno, Nevada.

Abuse-resistant drugs get “denied 90 percent of the time. But the pain pills will get approved every single time,” said Patterson.

“Shouldn’t it be flipped,” he said, “in that the things which can get people better should have better coverage?”