Editor's corner: The opioid crisis industry and its impact on healthcare finance

The words Editor's Corner in bold letters at the top of a stack of newspapers.

Picture of Ron ShinkmanMy hometown Los Angeles Times recently published a portion of a multi-part investigation about the nationwide epidemic of opioid painkiller abuse.

In a model of concise, economic storytelling, the Times demonstrated how drug giant Purdue Pharma, the manufacturer of OxyContin, systematically went through its sales data and sent employees into the field to discover that shady medical clinics were recruiting homeless people to undergo sham medical exams in order to obtain prescriptions for the drug. The clinic owners would then turn to shady pharmacies to fill huge volumes of prescriptions for the most powerful form of the painkiller--itself a red flag for abuse, since legitimate doctors rarely prescribe the highest dosage. Those 80 milligram pills would then be resold to addicts for as much as $80 apiece.

A separate article detailed how this supply of illicit OxyContin created a public health crisis in the town of Everett, Washington.

Purdue's database was so thorough it was able to quickly pinpoint the Southern California pharmacies that had its volume of OxyContin prescriptions rise by 2,000 percent in a short period of time.

Did the company contact the Drug Enforcement Administration or other authorities with its damning database? Not really. Did it stop supplying those pills? Not always.

In a model of concise, economic corporate spin, Purdue told the newspaper that siccing the authorities on those pill mills might have been overreach. “While we make information...available to law enforcement and state medical boards, it would be inappropriate to direct every single anecdotal and often unconfirmed claim of potential misprescribing to these organizations,” it said in a statement.

That Purdue has realized about $31 billion in revenue from OxyContin since the 1990s may have something to do with that position of reluctantly bothering law enforcement agencies about law-breaking.

I delve into all of this because a lot of American healthcare finance pivots on looking the other way--and then capitalizing on that sideways glance.

Purdue did eventually take actions to make sure that its OxyContin tablets weren't abused, such as reformulating their time-release feature so the drug could not be smoked or injected when the pills were crushed. But given that the Times noted that 4,000 new people wind up abusing prescription painkillers in the U.S. every day, likely many more people wound up addicted than if the company had moved more swiftly. And once addicted, many simply switch to heroin if they can't get pills.

Then there's the drug naloxone, which has proven effective in reversing opioid overdoses. It has been on the market for 45 years. Amphastar Pharmaceuticals, Inc., which manufactures and distributes a generic version of the drug, recently doubled its price for the form of the drug most commonly used by first responders, according to Politico. The price of Hospira's generic version rose from $1.84 a vial a decade ago to $31.66 in 2014. That's a 1,720 percent increase. The price of an auto-inject version of the drug designed to be administered by people with no medical training recently rose from $287.50 per dose to $1,875, Politico reported earlier this year.

I won't even delve into the tens or even hundreds of thousands of dollars it costs to treat drug addiction--and that's assuming there are no relapses down the line.

If there is any wonder as to why healthcare delivery is more expensive in the United States than any other place on Earth, this single facet of healthcare could be called Exhibit A. And there are many, many more examples of such cascades, all driven by the relentless All-American race for the buck.

By the way, hospitals often have to treat painkiller addicts in their emergency departments. And in many cases they do so at a loss because they are either uninsured or enrolled in a low-paying government plan such as Medicaid. We wind up paying for that too.

So the next time you read about someone suffering from an opioid addiction or see one in your emergency room, don't just think about the cost for them and their families. It's costing you as well.-- Ron (@FierceHealth)