Tag Archives: food and drug administration

Would a Formulary Help in California?

Introducing a closed pharmaceutical formulary into California workers’ compensation could produce two main benefits. The first is to further lower the cost of pharmaceuticals by either restricting or eliminating certain medications. The second is to reduce the possibility of drug addiction.

An October 2014 California Workers’ Compensation Institute (“CWCI”) report titled, “Are Formularies a Viable Solution for Controlling Prescription Drug Utilization and Cost in California Workers’ Compensation” states that pharmaceutical costs could be reduced by 12%, or $124 million, by introducing the Texas workers’ compensation pharmaceutical formulary.

To achieve the second benefit, an assembly member introduced AB1124 to establish an evidence-based medication formulary and wrote, “The central purpose of our workers’ comp system is to ensure injured workers regain health and get back to work. When workers get addicted to dangerous medications, goals of the program are not met. An evidence-based formulary has proven to be an effective tool in other states and should be considered in California.”

To confirm whether these benefits could be achieved through the introduction of the Texas formulary, a review of the CWCI study and the opioid medications available under the Texas formulary was conducted. The findings, summarized below, suggest that the answer is no.

Although California does not restrict or limit medications in treating injured workers, it does limit the prices paid and provides an opportunity to question prescribed medications that appear to be out of the ordinary. Medi-Cal prices (California’s Medicaid health care program) are used for establishing the maximum prices for workers’ compensation medications, in contrast to states such as Texas, which use the average wholesale price (AWP).

A review of two cost-saving examples that referenced specific medications calculated projected savings based on CWCI’s ICIS payment data for prescriptions paid between Jan. 1, 2012 and June 30, 2013.

The first example compared 50mg Tramadol prices from five different suppliers. The highest was $190, followed by $23, $18, $12 and $8 per script. Here, CWCI suggested that the manufacturer of the highest-priced script be removed from the California formulary. From mid 2009 through 2013, however, the unit price for 50mg Tramadol from the supplier of brand name Ultram and at least 10 other suppliers in California was nine cents, so the AWP for a script was $2. So, overpaying for medications is an issue even if the $190 supplier is removed.

The Workers’ Compensation Research Institute (WCRI) also reported that California claims administrators paid a unit price of 35 cents for 5mg Cyclobenzaprine and 70 cents for 10mg while the unit price from Californian suppliers was 10 cents for 10mg and 15 cents for 5mg. Again, the prices suggest that California claims administrators were paying more than the maximum prices.

Based on randomly selected manufacturers and strengths of the top 20 medications identified in the 2013 NCCI prescription drug study, California’s prices were on average 20% lower than the AWP and in some cases as little as 1/24th the cost. California prices were found to be at the lowest retail price range compared with those published on goodrx.com. Pharmacies located in Los Angeles, Miami and Dallas were used for comparison. Findings suggested employers in California workers’ compensation are paying no more than the general public for medications, whereas in Texas employers are paying more by using the AWP.

The second example compared script prices of seven opioid agonists, including Tramadol and Oxymorphone. Oxymorphone was the highest-priced script at $600 and Tramadol the lowest at $60 per script, suggesting a saving of as much as $540 if Tramadol were to be prescribed instead of Oxymorphone.

But prescribing oxymorphone when tramadol could suffice or vice versa could be regarded as an act of gross negligence by the physician. On the World Health Organization (WHO) analgesic ladder, tramadol and codeine are weak opioids regarded as “step two” while acetaminophen and NSAIDs are “step one.” “Step three” opioids include medications such as morphine, oxycodone and oxymorphone, which all differ in their pharmacodynamics and pharmacokinetics, so choosing one or more to treat pain becomes a balance between possible adverse effects and the desired analgesic effect. Oxymorphone (stronger than morphine or oxycodone) is recommended for use only when a person has not responded to or cannot tolerate morphine or other analgesics to control their pain.

A list of opioid medications published by Purdue Pharma was used to identify which opioids were excluded from the Texas formulary. The list of more than 1,000 opioid analgesics was prepared by Purdue to comply with the state of Vermont law 33 V.S.A. section 2005a, requiring pharmaceutical manufacturers to provide physicians with a list of all drugs available in the same therapeutic class. Being in the same class, however, does not necessarily mean they are interchangeable or have the same efficacy or safety.

The list showed available strengths and included (1) immediate and extended release, (2) agonists such as fentanyl, oxycodone, hydrocodone, oxymorphone, tramadol, codeine, hydromorphone, methadone, morphine, tapentadol and levorphanol and (3) combinations such as acetaminophen with codeine, oxycodone with acetaminophen, oxycodone with asprin, oxycodone with ibuprofen, hydrocodone with acetaminophen, hydrocodone with ibuprofen, acetaminophen-caffeine with dihydrocodeine, aspirin-caffeine with dihydrocodeine and tramadol with acetaminophen.

It appears that extended-release medications used for around-the-clock treatment of severe chronic pain have been excluded or are not listed in the Texas formulary, with a few exceptions. For example, 80mg OxyContin (Oxycodone) ER 12 hour (AWP $18, Medi-Cal $15) is excluded. 120mg Hysingla (Hydrocodone) ER 24 hour (AWP $41, Medi-Cal $34) is not listed. However, 200mg MS Contin (Morphine) ER 12 hour (AWP $31, Medi-Cal $26) and 100mcg Fentanyl 72 hour transdermal patch in both brand name and generic forms are approved under the Texas formulary. Immediate-release generic medications such as oxycodone, hydromorphone and hydrocodone with acetaminophen in all strengths are approved, but immediate-release hydrocodone with ibuprofen and oxymorphone in either immediate or extended release are excluded.

Would the objective of AB1124 be achieved by utilizing the Texas formulary? The above review suggests it would not. All the opioid medications available through the Texas formulary have the potential to cause addiction and be abused, possibly leading to death either accidentally or intentionally. As an example, the executive director of the Medical Board of California has filed accusations against Dr. Henri Eugene Montandon for unprofessional conduct including gross negligence. His patient was found dead with three 100mcg fentanyl patches on his upper chest. The autopsy revealed he potentially had toxic levels of fentanyl, codeine and morphine in his bloodstream at time of death. These three opioids are available under the Texas formulary.

An article published on the website www.startribune.com described the challenges in treating returning soldiers from combat duty. The article discusses Zach Williams, decorated with two Purple Hearts who was found dead in his home from a fatal combination of fentanyl and venlafaxine, an antidepressant. Venlafaxine in both immediate- and extended-release form is approved in the Texas formulary. In addition, the following statement was made in a 2011 CWCI study into fentanyl: “Of the schedule II opioids included in the Institute’s study, the most potent is fentanyl, which is 75 to 100 times more powerful than oral morphine.”

The top 20 medications identified by the 2013 NCCI prescription drug study were also compared with the Texas formulary, and six medications were found to be excluded, including three extended-release opioids, OxyContin (Oxycodone), Opana ER (Oxymorphone) and the once-daily Kadian ER (Morphine). The twice-daily, extended-release morphine MS Contin, however, was approved. Flector, a non-steroidal anti-inflammatory transdermal patch used for acute pain from minor strains and sprains, was excluded, as was carisoprodol a muscle relaxant classified by the DEA as a Schedule IV medication (the same as Tramadol). The Lidocaine transdermal patch, which is a local anesthetic available in both brand name and generic. was also excluded. Lidocaine patches have been found to assist in controlling pain associated with carpal tunnel syndrome, lower back pain and sore muscles. Apart from carisoprodol, it would appear the remaining five were excluded from the Texas formulary because of their high price rather than concerns regarding their safety or potential for abuse.

The U.S. Food and Drug Administration (FDA) is responsible for the approval of all medications in the U.S. Its approved list is the U.S. pharmacy formulary (or closed formulary). California workers’ compensation uses this list for treatment and the Medi-Cal formulary for medication pricing. In comparison, Texas workers’ compensation uses its own formulary, which is a restricted list of FDA-approved medications, and pays a higher price for approved medications than California’s system does.

Implementing an evidence-based formulary, such as in Texas, may result in an injured worker’s not having the same choice of medications as a patient being treated for pain under California’s Medicaid healthcare program. How can this be morally justified? Will we see injured workers paying out-of-pocket to receive the medications necessary to control their pain?

Claims administrators can greatly reduce pharmaceutical costs through their own initiatives by (1) ensuring that they pay no more than the Department of Industrial Relations (DIR) published price for a medication, (2) ensuring that physicians within their medical provider network (MPN) treat pain using the established pharmacological frameworks such as the WHO analgesic ladder, (3) ensuring that quantities and medication strengths are monitored, along with how a person has responded to analgesics, (4) ensuring that, when controlling pain with opioids, there is a heightened awareness for potential abuse, misuse and addiction, (5) establishing a multimodal pain management regimen including non-pharmacological therapies such as acupuncture, aerobics, pilates, chiropractic and physical therapy tailored to a person’s medical condition and, (6) for chronic pain, considering introducing an Internet-delivered pain management program based on the principles of cognitive behavioral therapy.

The progress of many of these initiatives can be automatically monitored through a claims administrator’s technology solution, where a yellow or red flag is raised when prices paid exceed the legislated maximum amounts, when a pharmacological step therapy or progressive plan has been breached or when non-pharmacological therapy goals have not been achieved.

Using these initiatives, as opposed to restricting specific manufacturers or medications through a closed formulary, will undoubtedly yield a far better outcome for the injured worker and lower the cost to the employer, benefiting all involved.

Get Unhooked

The Right Way to End Opioid Addiction

Psychosocial issues can influence chronic pain just as much as the biologic damage from an injury. Job or financial concerns, depression and anxiety, feelings of helplessness, family problems, enabling environments, substance abuse,and past physical or sexual abuse top the list of factors contributing to extended disability. Yet, workers’ compensation has traditionally downplayed psychosocial impacts on the claimant’s motivation to get better and focused instead on “medicalizing” treatment through physician visits, surgery, chiropractic care, a round of physical therapy and especially drugs that, ironically, often make the situation worse.

About 19% of the medical cost of a workers’ compensation claim goes to pharmacy, and a disproportionate amount of those drugs—between 21% and 34%—are opioids. Although neither the Food and Drug Administration (FDA) nor any other treatment guideline recommends opioids for long-term chronic pain, 55% to 86% of claimants are taking them just for that, according to the white paper “Opioids Wreak Havoc on Workers’ Compensation Costs,” published by Keith E. Rosenblum in August 2012.

Its research also found that one-third of claimants who start taking opioids are still on them after a year. Studies show that claimants who take opioids longer than 90 days are not likely to return to work. Patients using prescription painkillers for a long time typically suffer side effects, such as opioid-induced constipation, and experience related diseases such as kidney or liver damage from non-steroidal anti-inflammatory drugs.

There also are side effects from the medications prescribed to combat the side effects of the original prescriptions (for example, Nuvigil often is prescribed to wake patients from over-sedation). Ironically, opioids themselves can create an increased sensitivity to pain (hyperalgesia), thereby feeding the exact problem they are designed to solve. There needs to be a better way.

Behavioral Therapy

All patients bring psychological baggage—both good and bad—to their workers’ compensation injuries. Self-motivation, discipline, self-esteem, a sense of entitlement or victimhood, addictive behaviors and a true desire to get better are factors in recovery.

Some claimants recover and return to work with medical treatment alone; many do not. Claims with unaddressed psychosocial issues are the ones that go off the tracks, drag on for years and pile up costs. In workers’ compensation, “psych” is a four-letter word, but, unless you consider it in the treatment plan, the chances of full restoration are reduced.

Workers’ compensation is just beginning to venture into the psychosocial realm with cognitive behavioral therapy (CBT) to address opioid addiction. CBT’s use is fairly new because of the deep-seated, industry-wide phobia of owning a psych claim. Payers fear never-ending psychiatrist visits and a new set of drugs and costs likely to accompany a psych diagnosis.

However, CBT is not the same as traditional psychotherapy. It is a psychotherapeutic treatment tool that does not produce an additional diagnosis. Plus, CBT is surprisingly affordable. Provided in-person or telephonically—both requiring extensive “homework”—it is usually limited to eight to 12 visits at $100 to $150 per visit. In many cases, a payer’s total investment in CBT is less than the claim’s monthly drug spending.

The science and success of CBT are still evolving, but some studies and anecdotal outcomes show that it is a helpful tool, both in workers’ compensation and the healthcare industry in general. The focus is on patients who seem stuck in their treatment plans. CBT works on the concept that a person’s thoughts are the primary cause of that individual’s behaviors and feelings. Thought patterns—not circumstances, events or other people—dictate the individual’s motivation and sense of well-being.

A psychologist or other therapist asks questions and poses statements to help patients open up and self-identify the psychological elements standing in the way of their recovery. In that way, CBT gets to the root of motivation issues. Some claimants hate their jobs or bosses and consciously or subconsciously resist returning to work.

Family members can be motivation-killers and enablers, as in a case where a claimant took so much Celebrex that he developed cirrhosis of the liver. He and his doctor wanted to reduce his opioid intake, which also was damaging his liver, but his wife resisted. She said he was easier to manage when sedated and had to be convinced that he would die prematurely before she acquiesced.

The belief that “I don’t deserve to feel better” churns the cycle of pain for some. Many pain patients have low self-esteem that stems from any number of factors, including: hyper-critical parents, absent or neglectful parents, past sexual or physical abuse or other traumatic experiences.

The goal of CBT is for the patient to self-identify the issue through prompting by a professional and then correct fundamental errors in thinking, such as victimization, generalization or catastrophizing.

To be clear, CBT does not cure motivation problems. Instead, this “talk therapy” helps patients identify barriers to recovery and replace negative thoughts with positive, empowering ones.

Functional Restoration

While CBT is provided as a standalone, it also figures prominently in functional restoration programs (FRP), which help patients work through psychosocial issues while detoxifying and participating in physical therapy and other exercise programs that increase their physical activity and capability.

The whole functional restoration process enables individuals to acquire the knowledge and skills to make the behavioral changes needed to take primary responsibility for their own physical and emotional well-being after an injury. The ultimate goals of FRP and CBT are to implement lifestyle changes that will last a lifetime and manage pain.

A functional restoration clinic should be multidisciplinary, preferably with an addictionology, orthopedic or pain management and rehabilitation (PM&R) specialty, a psychologist and licensed physical therapist acting as a team to customize and coordinate treatment for the patient. Other treatments such as yoga, chiropractic and biofeedback also can be included, along with services like vocational counseling. The best programs involve between 120 and 160 total hours of therapy.

An initial assessment should predict the person’s anticipated compliance, and the better functional restoration clinics have high denial rates (50% or more). Applicants may not be in good enough health, or they may lack the motivation to change. There’s no point in spending $30,000 on a program if the claimant refuses to work or accept responsibility for his health and outcomes. A pre-emptive CBT program can help weed out unmotivated patients.

Vital signs and physical capabilities need to be measured and objectively managed, and a baseline should be taken upon admission, followed by daily to weekly measurements and adjustments. Following patients upon discharge is just as important. Best practices show one year of follow-up, by telephone or in-person, achieves the best results in cementing lifelong change. Without consistent encouragement and personal instruction, claimants may relapse and turn back to drugs.

When selecting an FRP, access to an inpatient program or a strong alliance with a hospital or other inpatient detox facility can be critical. It cannot be overstated how vital the appropriate venue for detoxification is to overall success. Often, the treating physician who prescribed the drug cocktail in the first place is ill-equipped to develop a discontinuance strategy or provide the clinical oversight needed to wean patients off the drugs. Initial inpatient care may be needed if respiratory depression or cardiac issues could significantly complicate the weaning process.

Power of Yoga

Many functional restoration programs offer yoga, an interesting combination of physical and mental/emotional exercise. Studies show that it improves flexibility, strength and balance on the physical side. Its focus on “centering” helps participants calm their minds and relax their bodies, relieving pain and giving them an empowering sense of control.

An Austin, Texas, clinic saw such a positive response to its once-a-week yoga class that it expanded it to five days a week. Not only was patient satisfaction high, but overall functional outcomes improved. Patients say it helps them cope with pain, improves flexibility and increases their functionality, and they plan to make it a permanent part of their lifestyle. Yoga by itself is typically not sufficient, but incorporating it into the multidisciplinary functional restoration strategy can yield very positive results.

A holistic pain management approach can get runaway claims back on track. Weaning a claimant off an opioid-laden cocktail, which often does much more harm than good, is a great thing. Stopping the financial losses on a claim is a great thing. Returning a clear-headed, self-directed employee to work is a great thing.

Adjusting Mindsets

The focus of workers’ compensation, when it was originally created more than 100 years ago, was to return an injured worker to health and function and work as quickly as possible. Historically, it has been an insurance function; after all, workers’ compensation is part of the property/casualty industry. However, over time, workers’ compensation became part of the healthcare industry because restoring function and health is entirely related to the competency of the clinical and psychological strategies employed.

As evidence mounts that patient motivation is vital to actual recovery, it’s time for another transition from a “medicalization-only” mindset to a holistic approach that takes into account all the variables that affect recovery. It’s time for all stakeholders within the system to think more broadly and be open to new concepts that comply with best practices and correspond with treatment guidelines.

In other words, maybe the injured workers are not the only ones who need to have their motivations adjusted.

 

SIDEBAR

Prevention Is Key

Keep claims from going off track in the first place by having treating physicians conduct risk management before prescribing opioids. Some questions include:

  • Has there been past substance abuse?
  • Is the patient receiving narcotics from other physicians?
  • How many other physicians are prescribing medications?
  • Is there depression or anxiety involved?
  • Did the claimant experience sexual or physical abuse (a prime predictor of addictive behavior)?
  • Will the patient submit to random urine drug tests?

Additionally, there are a number of screening tools to identify potential drug dependency and addiction. Some examples include:

  • For prior substance abuse: Diagnostic Criteria for Substance Dependence – DSM-IV from the American Psychiatric Association
  • For potential addiction/dependence issues: Opioid Risk Tool (ORT) or Screener and Opioid Assessment for Patients with Pain  (SOAPP)
  • For depression: Patient Health Questionnaire (PHQ-9)
  • For general psychological analysis: Minnesota Multiphasic Personality Inventory (MMPI)

Unfortunately, most payers do not have a mechanism for reimbursing physicians for conducting a detailed risk analysis. This needs to change. Payers could assign a CPT code for physicians to use to conduct a thorough risk analysis. Spending a few hundred dollars up front can save hundreds of thousands of dollars on a long-term, opioid-laden claim. The assessment would also shed light on the physician’s capabilities to manage a chronic pain situation.

Winning the War Against Opioid Addiction and Abuse

As we move forward with winning the war against opioid addiction, it can sometimes be challenging to read the daily headlines and stay positive, especially around the holidays. A December article titled “Drug Abusers May be Injuring Pets to Get Pain Killers” shared how police officers and community leaders informed the Ohio attorney general’s office that people have been abusing drugs rightfully prescribed to pets. The US News HealthDay story titled “Secure Your Prescription Drugs When Hosting Holiday Parties” warned readers about the importance of securing prescription drugs in a safe location before guests arrive. When stories deteriorate to addicts intentionally harming their dogs and to people worrying about holiday guests raiding medicine cabinets, rock bottom isn’t far away.

However, 2013 positioned us well for achieving improved results during 2014. Some of last year’s positive developments include:

1.   State law changes establishing clearer standards of care, reporting and tracking of controlled narcotics, bans on abused narcotics, etc.

2.   State and federal agencies aggressively prosecuting individuals who prescribe opioids illegally or  operate “pill mills,” revoking registrations of some pharmacies and compelling healthcare providers and pharmacies to surrender or forfeit their medical licenses to state medical/pharmacy boards

3.   Physician-led education efforts like the Physicians for Responsible Opioid Prescribing

4.   Medical boards actively addressing the inappropriate and illegal dispensing of drugs

5.   Heightened awareness of the neonatal abstinence syndrome crisis in the U.S.

6.   Workers’ compensation insurers leveraging advanced analytics, physician education efforts, evidence-based pain diagnoses and utilization reviews to reduce injured worker reliance on addictive prescription drugs

7.   The Food and Drug Administration’s Risk Evaluation and Mitigation Strategy

8.   The issuance of the October 2013 Trust for America’s Health report titled “Prescription Drug Abuse: Strategies to Stop the Epidemic”

9.   Continuing prosecution and sentencing of healthcare providers

10. Efforts by national medical organizations

The first eight developments were addressed in the authors’ first quarter 2013 Physician Insurer magazine article titled “The Opioid Abuse Epidemic, Turning the Tide” and our Dec. 2, 2013 Property Casualty 360 Claims Magazine article titled “10 Strategies to Combat the Rx Abuse Epidemic – An Insurers Perspective.”

This article will expand on the last two developments and share some thoughts on what may be in our future when it comes to winning the war on opioid addiction and abuse.

Prosecution and sentencing of healthcare providers

2013 was marked by the successful prosecution and sentencing of healthcare professionals involved in various forms of prescription drug diversion. Arguably the most notable of these was the 39-year prison sentence given to David Kwiatkowski, the former New Hampshire hospital technician who caused dozens of people to become infected with hepatitis C when he injected himself with pain killers using syringes that were then used on patients. Kwiatkowski admitted in August to stealing the drugs and leaving used syringes for hospital use for years, despite knowing he was infected with hepatitis C. His case drew national attention to the problem of prescription drug diversion among healthcare workers; caused a number of institutions to finally take a fresh look at their human resource policies and systems being used to detect diversion; and, has, we hope, sent a strong message of deterrence to all healthcare drug diverters — it is only a matter of time before you get caught!

Efforts by national medical organizations (NMOs)

On an extremely positive note, we are beginning to see NMOs join the fight to help stem the opioid epidemic. On Dec. 10, 2013, the American College of Physicians released a position paper titled “Prescription Drug Abuse: A Policy Position Paper From the American College of Physicians.” The goal of the paper was to provide physicians and policy-makers with 10 recommendations to address the significant human and financial costs related to prescription drug abuse. The recommendations include support for additional education, a national prescription drug monitoring program, establishment of evidence-based nonbinding guidelines regarding recommended maximum dosage and duration of therapy, consideration of patient-provider treatment agreements and the passage of legislation by all 50 states permitting electronic prescription for controlled substances.

In turn, in January 2014, the American Academy of Pediatrics (AAP) Committee on Drugs and Section on Anesthesiology and Pain Medicine issued a report titled “Recognition and Management of Iatrogenically Induced Opioid Dependence and Withdrawal in Children.” The clinical report recommended guidelines for prescribers to follow when weaning children from opioids. As noted by lead author Jeffrey Galinkin, MD, “[t]he key reason the AAP was keen to publish this paper and go forward with this guideline is that people are unaware that patients can get drug-specific withdrawal symptoms from opioids as early as five days to a week after having been on an opioid chronically.”

This recommendation was immediately followed by the Centers for Medicare and Medicaid Services (CMS) Jan. 10, 2014, Federal Register Volume 79, Number 7 publication of proposed rules revising the Medicare Advantage (MA) regulations and prescription drug benefit program (Part D) regulations to help combat fraud and abuse in these programs. The proposed rules include requiring prescribers of Part D drugs to enroll in Medicare, a feature that CMS believes will help ensure that Part D drugs are prescribed only by qualified individuals. As reported by Medscape Medical News, CMS is also seeking the authority to revoke a physician’s or eligible professional’s Medicare enrollment if:

• CMS determines that he or she has a pattern or practice of prescribing Part D drugs that is abusive and represents a threat to the health and safety of Medicare beneficiaries or otherwise fails to meet Medicare requirements; or

• His or her Drug Enforcement Administration certificate of registration is suspended or revoked; or

• The applicable licensing or administrative body for any state in which a physician or eligible professional practices has suspended or revoked the physician or eligible professional’s ability to prescribe drugs.

Furthermore, CMS proposes employing data analysis to identify prescribers and pharmacies that may be engaged in fraudulent or abusive activities. In Table 14 of Federal Register Volume 79, Number 7, CMS’ Office of the Actuary estimates the savings to the federal government from implementing its proposed provisions will be $83 million in calendar year 2015, $132 million in 2016, $171 million in 2017, $364 million in 2018 and $589 million in 2019.

Source: CMS

Innovation in our future

In addition to the above efforts, companies continue to innovate and research new ways to address historical challenges.

Vatex Explorations is building a real-time individual-dose monitoring system called Divert-X to reduce drug trafficking, misuse and addictions that result from routine medical care. Divert-X monitors a patient’s individual doses through the electronic transmission of data identifying the time of dose access, location and other measures. The analysis of the data in real time helps physicians and pharmacists identify drug-taking behaviors that fall outside of norms, allowing early intervention before misuse or addiction set in.

In 2012, the Food and Drug Administration approved an ingestible sensor that can be used to track real time data about your pill consumptions habits. The sensor, developed by Proteus Digital Health, was first approved for use in Europe before coming to the U.S. The ingestible sensor is part of the digital health feedback system, which includes a wearable sensor and secure app and is largely focused on serving the transplant population and patients with chronic illnesses. The authors could envision a day when the system could help in the battle against opioid addiction.

Insurance companies are doing a better job of leveraging advanced analytics to understand their opioid-exposed population and the prescribing habits of the physicians treating their injured workers. Through the review of medical bills (e.g., date and types of service and payment, ICD-9 diagnosis codes, CPT-4 procedure codes, etc.) and pharmacy data (e.g., bill frequency,  aggressive refills, NDC drug codes, quantity used, generic vs. brand, supply days, use of prescriber, pharmacy name, etc.), insurance companies can identify usage and treatment patterns that fall outside of expectations using cluster analyses, association rules, anomaly detection and network “link” analyses.

Law enforcement continues to push the envelope in finding innovative ways to combat drug diversion. Take, for example, the strategy developed in consultation with the National Association of Drug Diversion Investigators and Oklahoma Bureau of Narcotics to curb false reporting of the loss or theft of prescription drugs in Stillwater. According to a police spokesman, most physicians in Stillwater require patients to obtain a police report before they will write a replacement prescription for lost or stolen medications. This requirement resulted in an increase in the number of police reports filed, but a new problem emerged. How could anyone determine whether those police reports were legitimate? In response, the Stillwater police department created a database to record the names of any individual who reported the loss or theft of a prescription drug. The department now requires the individual to take a polygraph test before it will accept any subsequent report of a lost or stolen prescription drug. Fail that polygraph, and criminal prosecution may follow. Query: If this strategy were employed nationwide, would the medicine cabinet at home be guarded more closely?

Conclusion

There is no doubt we have come a long way in the battle against opioid addiction in a relatively short time. Although there is a lot of road left to travel, 2014 is well-positioned to carry forward the effective efforts from last year. Given the innovative spirit of the U.S. and passion of everyone involved in winning this fight, a better long-term solution could be just around the corner.

To Cure Rare Diseases, Unleash Orphan Drug Innovations

In September of 2012, the City of Pittsburgh hosted the 35th annual Great Race, a charity run that raises money for the Richard S. Caliguiri Amyloidosis Research Fund. Caliguiri, a former Pittsburgh mayor, died of this rare protein disorder, and a portion of the race proceeds are used to help find a cure.

It should have been an uplifting event. Yet the Pittsburgh Post-Gazette reported that “despite the rally of support … the research fund created in Caliguiri’s name has had little impact on the effort to find a cure.”

Those familiar with the challenges of treating rare conditions like amyloidosis won’t be surprised by this news. The sad truth is that the economic incentives for developing life-saving treatments for rare disorders are less than optimal.

But that doesn’t mean that we’re powerless to fight rare diseases. Policymakers can dramatically improve incentives for researchers and biopharmaceutical firms to create drugs that treat rare conditions — treatments known as “orphan drugs.” And they should. Rare diseases collectively represent a major public-health threat.

Rare diseases — conditions like Huntington disease and Burkitt lymphoma which afflict fewer than 200,000 people — cost Americans more than $474 billion a year.

Over 7 percent of Americans — or more than 25 million people — suffer from the roughly 7,000 illnesses that fall into this category.

So the overall market for treatments for rare diseases is large. Indeed, total global spending on orphan drugs runs between $50 billion and $85 billion — or between 5.7 percent and 9.7 percent of what the world spends on pharmaceuticals, according to “A Primer on the Orphan Drug Market: Addressing the Needs of Patients with Rare Diseases,” a new paper by economist Dr. Wayne Winegarden, senior fellow at the Pacific Research Institute.

But the potential number of beneficiaries for each individual orphan treatment is relatively small. A narrow market of potential buyers can make investing in orphan drugs perilous.

Part of the problem is that developing a treatment for any illness is a long and expensive process. It takes anywhere from 10 to 15 years to usher a treatment from the research phase, through the Food and Drug Administration (FDA) approval process, and into patients’ hands.

At every step of the process, drug firms must spend more money — and face the distinct possibility that their research will fail. According to the best estimates, a single successful drug costs well over $1 billion to develop.

And once a drug goes generic, the firm that created the medicine must deal with fierce competition from other manufacturers.

It’s hardly surprising, then, that pharmaceutical firms tend to bet on treatments that will be useful to the largest number of patients. This state of affairs often leaves those suffering from rare diseases with few treatment options.

Fortunately, policymakers have found ways to improve the incentives for pharmaceutical firms to invest in orphan drug research.

Consider the Orphan Drug Act, passed in 1983. It provided drug developers seven years of market exclusivity for their inventions, ensuring that they would have a reasonable amount of time in which to make back their hefty investment, free of competition from other pharmaceutical firms.

The law also lessened the economic burden of drug development by offering a 50-percent tax credit for the costs incurred during the clinical trial phase. On top of that, the Act waived the fees associated with applying for FDA approval.

The results? In the past decade, the number of new drugs — or New Molecular Entities (NME), as they are called in the trade — released in the United States for the treatment of rare diseases has increased dramatically. In fact, more new NMEs were launched in 2011 than in any of the last ten years.

This is encouraging evidence that those who suffer from rare illnesses shouldn’t give up hope.

It’s now up to our leaders to find new ways to lower the barriers to developing these valuable treatments. They should start by taking the Orphan Drug Act — already over a quarter-century old — and using it as a model.

Drug companies should be rewarded for developing orphan drugs. It’s the only way to guarantee that, no matter how uncommon an illness, there will be somebody, somewhere working to find a cure for it.