The US #opioidcrisis is the greatest health crisis in modern time
Opioid abuse is currently the most common cause of death from drugs. The opioid problem in the US has caused an epidemic, where drug overdoses are claiming more and more lives. In addition to the unnecessary loss of life, the resources needed to address the issue are a huge economic burden. There is an increasing need for treatment, and the buprenorphine/naloxone market grew by over 14 percent in 2018.1
A global problem that has developed into an American health crisis
It is estimated that approximately 25 million people in the world are dependent on opioids.2 The problem exists in both developed countries and in less developed countries but is by far the greatest in the US, where a fifth of those dependent on opioids live.3 Worldwide at least 190,000 people die prematurely each year as a result of drugs and the majority of the deaths are caused by the use of opioids.4 The problem is acute in the US, where more than 70,2005 died of an overdose in 2017. Approximately 70 percent of these deaths were caused by opioid abuse. In the same year the opioid crisis in the US was classified as a Public Health Emergency, which means that resources should be allocated to avert or avoid public health crises. In Europe, with an estimated 1.3 million,6 high-risk opioid users, opioid addiction is not as great a problem as in the US. However, there are several alarming signs that the problem is getting worse. The number of overdose-related deaths has increased for the fourth consecutive year.7
Opioid abuse costs societies substantial resources
From an economic point of view opioid dependence is 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 enormous and considerably higher than previously calculated. The Council of Economic Advisors, which is an advisory committee to the American President, came out in 2017 with the report entitled “The Underestimated Costs of the Opioid Crisis”. This report shows that the cost to society of the opioid crisis amounted to USD 504 billion in 2015, or 2.8 percent of GDP. This amount is six times higher than the previous calculation, where loss of life as a result of overdoses had not been taken into account.
Market consists of three payer categories
The market for the treatment of opioid dependence using buprenorphine/naloxone can be divided into three different payer categories, Commercial, which comprises private insurance companies, Cash & Vouchers, where patients themselves finance their care, and Public, where care is financed by public sector payers such as Managed Medicaid, FFS Medicaid and Medicare Part D. The Public category differs from the other categories in that it is to a great extent stringently controlled by insurance companies with regard to what drugs may be prescribed and which physician a patient can choose. Pharmacy Benefit Managers (PBM) play an important role, as they are responsible for assessing, on behalf of the insurance companies and employers, which drugs are to be covered by insurances.
Publicly financed care growing fastest and is characterized by price pressure
The Public category, publicly financed care, has grown the fastest in recent years, driven by the fact that more and more people have gained access to publicly financed healthcare through the Affordable Care Act and due to the fact that employers have become more restrictive in offering private healthcare insurances. The Commercial category has displayed lower growth in comparison to the Public category.
The market is generally characterized by price pressure. This is above all true in the Public category, which is stringently controlled and which has seen discount levels increase. In comparison with other pharmaceutical markets, generics have not had a significant price pressure effect. However, generics are favored by the fact that many insurance companies in the Public category automatically give generics priority and thus indirectly put pressure on companies with new products to lower the price if insurance companies are to deviate from this principle. Since the launch of Zubsolv®, the list price of generics has been on a par with or a little higher than that of the drugs sold under patent-protected brand names, but recently there have been campaigns from individual generic companies that have offered discounts to pharmacies which have then reduced the price at the pharmacies to significantly lower levels.
Besides Orexo there are two other players in the market, Indivior and BioScience Delivery, who offer treatment with products under their own brand name. Indivior, who commercialize Suboxone® film, are the market leader, with a market share of just under 65 percent.8 However, their market share has displayed a negative trend in the past two years.8 Orexo’s market share for Zubsolv amounts to just over 5 percent and the corresponding figure for BioScience Delivery and their drug, Bunavail, is approximately 0.5 percent.8 The remainder of the market is constituted by generic companies, whose share of the market has grown in recent years.8
Great need for treatment driving strong growth
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.9 Approximately 4 million are considered to be in need of treatment.9 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 0.8 million.9 The market for buprenorphine/naloxone products has grown substantially in recent years. Annual growth is approximately 14 percent and the value of the market is estimated to be more than USD 2.8 billion.10 Considerable political and media focus has increased knowledge and awareness of opioid dependence and its risks, which has led to more people seeking help. The launch of the Affordable Care Act (ACA) healthcare reform, also known as Obamacare, has also resulted in more people gaining access to subsidized care.
Dynamic market with a positive outlook
Even though there are signs indicating that the number of prescriptions of opioid-based painkillers written out is declining in the US, there will continue to be a great need for treatment. An investigation carried out by Clarion Healthcare shows that the number of people in need of treatment will increase from today’s 4 million Americans to 6 million in 2023. The increase is primarily explained by the fact that both the number of patients in need of treatment and the number of patients receiving treatment will increase by approximately 50 percent. According to the study, an increasing number of patients will be treated with buprenorphine/naloxone at the expense of other MAT treatments. Even though it is predicted that the market will grow, the market dynamic can increase due to new treatment alternatives and greater generic competition.
1 IMS Data
2 World Drug Report 2016
3 UNODC World Drug Report 2014
4 World Drug Report 2017
5 Center of Disease Control
6 European Drug Report 2017
7 European Drug Report 2018
8 IMS Data
9 Clarion Healthcare
10 IMS Data