Written by Prabhav Kamojjhala
“My public high-school had monthly police checks where a canine dog unit would search the school, multiple student cases of abusing narcotics, and many students were found in possession of highly regulated and illegal drugs” says Shreyas Sinha, a current first-year in the BPE program and a native of Nashua, NH.
The shadow of the opioid crisis appears to be almost omnipresent across the United States, having claimed 70,237 lives in 2017 (up from 16,849 deaths in 1999). The issue has become so pervasive that even Sesame Street has attempted to tackle it through the introduction of a new character.
The emergence of this problem can arguably be linked to prescription painkillers such as Oxycontin, a drug that was aggressively marketed by its maker – Purdue Pharma – since it was invented in the 1990s. What ensued was a complex web of sales representatives and doctors, all peddling the drug’s supposed 12-hour benefits, creating a cycle of addiction among the American public that is still visible today.
In the face of this crisis, over 2000 plaintiffs have taken Purdue Pharma to court, a move that the firm has tried to shield itself from by filing for bankruptcy in hopes of a settlement with the plaintiffs that have taken them to court. But this begs the question: what does Purdue’s bankruptcy mean for the opioid market and more importantly, the opioid crisis?
The market for opioid production is essentially dominated by four major firms: Purdue, Actavis, SpecGx and Par Pharmaceutical, responsible for 91% of all opioids manufactured in the United States. What makes this dominance in the market particularly hard to break however, is the role of patents. What these patents do is break the market into small “mini-monopolies” where each firm controls the ability to produce a particular type of medication that works in a specific manner.
Purdue Pharma’s success, for example, stems from its ability to capitalize on patent laws that allowed them to make Contin (a coating that controls the rate at which the drug is released), based variants of Morphine (MS Contin), and Oxycodone (Oxycontin). This in turn meant that despite manufacturing 3% of all medications in the market, Purdue was still able to rake in $35 Billion for the firm. Moreover, ProPublica estimates that the firm has a 16% market share in the market for opioid medications with a similar potency.
Considering the mounting lawsuits it faces, Purdue Pharma has tried to reach a settlement with its numerous plaintiffs by promising to pay over $3 Billion coupled with the sale of Mundipharma, a business owned by Purdue. Yet this settlement might arguably do little, if anything, to significantly reverse the existing problem. Distributors such as McKesson are just as responsible in getting drugs to their end consumers as the manufacturers. For example, data from ARCOS reveals that in West Virginia distributors shipped 780 million doses of oxycodone and hydrocodone between 2007 and 2012 – to a state of 1.8 million people.
As the point of access for consumers, a lack of oversight (especially vis-à-vis the volume of opioids being shipped to pharmacies) is just as harmful to kickstarting the problem. On an international scale, pharma firms have also begun looking at the growing restrictions in the US market as a driving force for expansion into emerging markets such as India, which only recently loosened its strict regulations on opioid medications. Even within the market itself, there exist multiple substitutes for drugs such as Percocet (an Oxycodone based drug) and more recently fentanyl, which has significantly contributed to a spike in overdose deaths. One correspondence in the New England Journal of Medicine revealed that even the development of “abuse-deterrent” pills, such as in the case of Oxycontin, resulted in a substitution of the drug with Heroin and other forms of pain medication.
Purdue’s bankruptcy filing is in no way a sign of the decline of the market for opioid painkillers. On the contrary, at a time where sweeping regulations appear to be on the horizon, the future of the Pharma industry is likely to be shaped by how it can respond to the new sweeping regulations. When the federal government went after Big Tobacco, new products such as JUUL rose up to take the traditional cigarette’s place. If governments are to truly curb the growth of the opioid crisis, they will have to ask themselves tough questions and decide if they want long-term disincentivizing regulations or quick fix fines to tout to the public.