The market in the US is characterized by strong growth

Orexo’s key market today is the American market for buprenorphine/naloxone products. Orexo operates in the market through the commercialization of ZUBSOLV®, which is an effective drug for people suffering form opioid addiction. Dying from an overdose is one of the most common causes of deaths in the US and in 2017 more than 70,200 Americans died of an overdose, mainly caused by opioids.1 The problem is classified as an epidemic. Several important federal initiatives have been taken to increase access to treatment, and this creates scope for continued strong growth.

 1 Center of Disease Control

Covid-19 fuels the need for Orexo’s treatments

The Covid-19 pandemic, with society lockdowns and social distancing, have led to a significant increase in drug addiction and mental health issues globally. In the US the opioid crisis has exacerbated and overdose death tolls are reaching record-high numbers. There is a great human suffering and to fill the treatment gap the need for therapies that go beyond traditional regimens, such as digital therapeutics, is significant.

A global concern and large treatment needs

In recent years, it has become increasingly obvious the important role mental health plays in achieving global development goals, and therefore mental health has been included in the UN’s goals for sustainable development. Depression is the leading cause of disability worldwide and suicide caused by depression is the second common death cause among people in the age of 15–29.1 In the US there is an estimated 17 million US adults suffering from at least one major depressive episode on a yearly basis,2 of which approximately 35 percent not receive treatment.

The use of drugs globally continues to spread. Approximately 270 million people are using drugs. Opioids continue to cause the most harm and stands for the majority of the drug related deaths.3 The problem with opioid misuse is by far the greatest in the US where a fifth of those dependent on opioids live.4 In the US it has reached epidemic proportions and is today the most common cause of deaths among Americans under 50 years. A sharp increase in prescription of opioid painkillers over a little more than two decades is the primary reason that today there are an estimated 12 million people abusing opioids in the US.5 Approximately 4 million are considered to be in need of treatment.6 Of these, approximately 1.4 million receive so-called Medication Assisted Treatment, MAT, where the most common form of treatment is buprenorphine/ naloxone, which is given to approximately 1 million Americans.7 The market for buprenorphine/naloxone products has grown substantially in recent years and in 2020 the growth amounted to 15 percent.8

Alcohol misuse is another serious health crisis in the US with more than 16.6 million suffering from heavy alcohol misuse.9 Each year, more than 88,000 people die from alcohol-related causes,10 making it the third leading preventable cause of death in the country. Approximately 20 percent of those diagnosed with alcohol use disorder (AUD) receive treatment, of which the majority attended self-help groups.11

Covid-19 exacerbates the crisis

The Covid-19 pandemic, with society lockdowns and social distancing, have led to a significant increase in mental health issues and substance use disorders. In the US the opioid crisis has exacerbated and data presented in the summer of 2020 indicated 83,000 Americans died of an overdose during the latest 12-months period, an increase of 21 percent.12 Synthetic opioids continues to explain the large majority of the death tolls which amounts to more than 70 percent.13 The Covid-19 pandemic expects to have a large impact on people’s mental health and WHO highlighted the need for countries to take necessary measures to alleviate the impact on individuals, their families and society more broadly.14 Recognizing the need for additional treatment solutions for rising mental health conditions, the FDA has introduced a ”Public Health Emergency Policy” with the aim of increasing access to digital therapies within the area of psychiatric disorders during the Covid-19 pandemic.

Large economic burden on societies

From an economic point of view drug addiction and mental illness are a considerable problem. In addition to loss of life and lower quality of life, large costs are associated with lower productivity and a lack of resources, and there are also increased healthcare and correctional treatment costs. In the US, costs related to opioid dependence are extensive, and in 2018 the opioid epidemic cost the US society USD 696 billion.15 The costs continue to rise which can be explained by the growing death toll in recent years and as

it includes a broader societal cost of premature death. Also the widespread alcohol misuse is a big burden for the American society with costs amounting to approximately USD 250 billion on an annual basis.16

The digitalization is fueled by Covid-19

Almost all industries have been transformed or are under transformation, as a result of the digitalization’s progression. The healthcare sector, surrounded by an extensive regulation framework, has not developed in the same pace, but Orexo is convinced it is just a matter of time before digital health becomes an integrated part of all health care delivery. The health care sector all over the world is under pressure from an aging population and need to find ways to improve efficiency without jeopardizing quality, and improved use of digital health applications will be one solution to this.

Examples of others factors driving the development:

  • Continuous increase in scientific evidence of the value from digital health products
  • Covid-19 has significantly accelerated the utilization of non face to face interactions between healthcare providers and patients
  • Digital health solutions offer a superior monitoring of treatment outcome and enables value based solutions
  • Most payers in the US are recognizing the value of digital health solutions and are assessing how to finance and implements these
  • Patients are increasingly becoming comfortable with sharing sensitive information online.

The Covid-19 pandemic with social distancing has resulted in that authorities, payers, caregivers and patients have approached digital solutions more quickly. Among others the demand for telemedicine surged and FDA has opened up for a fast track to market for digital therapies within the psychiatric field during the pandemic.

The buprenorphine/naloxone market in the US

The market for treatment of opioid dependence using buprenorphine/naloxone showed a record-high growth of 15 percent in 2020. The growth predominantly took place in the largest payer segment, where care is financed by the public sector payers, such as Managed Medicaid, FFS Medicaid and Medicare Part D. Care financed by private insurance companies, often signed by employers, comprised by the commercial payer segment, showed a weak development during the year. The Covid-19 pandemic resulting in a doubling of the unemployment in the US had a negative impact on the commercial payer segment while it gained public financed care and care where patients themselves finance their care. Generics part of the market continue to be dominant which mainly refers to the public financed care which is characterized by high price sensitivity.

 

1 World Health Organization
2 National Institute of Mental Health
3 World Health Organization
4 World Drug Report
5 Clarion Healthcare
6 IQVIA Data
7 Clarion Healthcare
8 IQVIA Data
9 Substance Abuse and Mental Health Services Administration

10 Sacks, J.J.; Gonzales, K.R.; Bouchery, E.E.; Tomedi, L.E.; and Brewer, R.D. 2010 National and state costs of excessive alcohol consumption. American Journal of Preventive Medicine49(5):e73–e79, 2015.

11 Substance Abuse and Mental Health Services Administration

12 Center of Disease Control and Prevention

13 Center of Disease Control and Prevention

14

https://www.un.org/sites/un2.un.org/files/un_policy_brief-Covid_ and_mental_health_final.pdf

15 The White House Council of Economic Advisors

16 Substance Abuse and Mental Health Services Administration

Global forces increasing abuse of opioids and other drugs

The great increase in prescription painkiller drugs in the past decade has led to more and more Americans abusing opioids. This development is also the result of strong underlying global forces that go beyond tablet abuse and which have led to an explosion in the number of opioids and other drugs available and their abuse.

Social exclusion and mental illness

Developed countries often have a larger percentage of drug consumption. Individuals with a higher socioeconomic status tend to introduce but also facilitate the establishment of illegal drug use.1 However, it is usually socially and economically vulnerable people in these societies that develop an addiction or suffer from physical or mental impairment in connection with their abuse. People living on the fringe of society whose lives are characterized by long-term unemployment, social exclusion and shattered dreams are not seldom a hotbed for extensive drug dependence.

Migration

Flows of refugees can have an impact on the use of drugs. People fleeing from war and conflicts often live under difficult circumstances and often lack a social safety net. Studies demonstrate that people suffering from post traumatic stress and depressions run a greater risk of being introduced to drugs. Being a refugee also means increased exposure to new drugs.2

Trafficking

Drug trafficking

With the spread of globalization, trade barriers have been removed, thus promoting world trade. At the same time, the ability of illegal drug cartels to reach out to more markets has been facilitated, which has led to drug trafficking growing. Increased efficiency of distribution channels and increased competition have also generally led to the lowering of drug prices among users.

Human trafficking

After drugs and weapons, human trafficking is the third largest and most profitable organized crime in the world. In 2012 the International Labour Organization (ILO) estimated that 21 million people were the victims of trafficking.3 This type of crime is one of the most profitable, is growing the fastest and is strongly linked to drug abuse.4

Illegal drug industry

To reduce the risk of unlawful distribution and abuse, the market for drugs classified as narcotics is stringently regulated. At the same time it is estimated that more than 5.5 billion people each year have very little or no access to drugs classified as narcotics for the treatment of moderate or severe pain.5 This development is one of several reasons for the great gains made by the illegal drug industry, which further increases the risk of abuse.

1 World Drug Report 2016
World Drug Report 2016
3 International Labour Organization http://www.ilo.org/global/topics/ forced-labour/lang--en/index.htm
4 U-fold, Uppsala Universitet
5 World Drug Report 2016