Editor’s Note: The nation’s opioid epidemic claimed more than 42,000 lives in 2016. As the crisis of addiction accelerates, experts predict that opioids could kill more than half a million Americans over the next decade. In a new webinar and companion article for Bloomberg BNA, Manatt examines the genesis and drivers of the opioid epidemic, reviews how four major sectors have responded, and shares potential solutions for bringing the crisis under control. Key points are summarized below. Click here to view the CLE-eligible webinar free on demand. Click here to download free copies of the webinar presentation and companion article.
The Genesis of the Opioid Crisis
The deaths caused by opioids in 2016 exceeded the total deaths in any single year from car accidents, gun violence and even HIV/AIDS at the height of that epidemic. Multiple factors have contributed to the crisis, including the introduction of potent, long-acting prescription pain medications; a perspective shift among physicians that such products were not as addictive as they had thought; and pressure from patient advocates urging providers to treat pain more aggressively. Together, these changes contributed to a tripling of the number of opioid prescriptions between 1999 and 2015.
To compound the crisis, heroin dealers expanded their supply networks and deployed new technology to deliver heroin quickly, efficiently and cheaply. More recently, synthetic opioids, such as fentanyl, have contributed to the overdose and death rates.
With growing recognition that substance use disorders are a chronic disease of the brain that require medical management, there is an opportunity to deploy medication-assisted treatment (MAT). However, MAT remains in short supply, and prior authorization and reauthorization requirements often deter usage.
State, Local and Tribal Governments
Local officials in communities hardest hit by the opioid crisis have confronted increased costs for law enforcement and emergency care, often with limited support from state and federal officials. That is changing, with most states now having some programs to address the crisis.
The federal government has offered some help through grants and, most significantly, Medicaid. Federal grant funding is limited, however, and Medicaid is a state-federal partnership that requires significant state dollars. As a result, state and local officials have filed lawsuits against manufacturers and distributors.
Civil Litigation Brought by Towns, Cities and Tribal Governments. More than 400 cities and counties have filed suits against opioid manufacturers, distributors and dispensers. On December 5, 2017, the United States Judicial Panel on Multidistrict Litigation (MDL) consolidated 62 of these cases and transferred them to the Northern District of Ohio. (See In re National Prescription Opiate Litigation, MDL No. 2804 (Dec. 5, 2017)) Since then, more than 340 cases have been added to the multidistrict litigation in Ohio, with more being added nearly every week. (Id. Doc. 173) Tribal governments have also entered the litigation, with nine tribal entities bringing suits through March 20, 2018.
While the cases have alleged a number of different legal theories, they share common questions of fact. Most of the cases point to the Controlled Substances Act (CSA) as not having been followed, thereby violating a “duty of care.” (See 21 U.S.C. § 829(e)(2)(A); 21 U.S.C. § 353(b); 21 C.F.R. § 1306.03(a)(1)) For that reason, many, if not most, of these cases will likely join the consolidated cases in the Northern District of Ohio.
In response, companies have argued that the CSA does not provide a private right of action. (See Memorandum of Law in Support of Defendant McKesson Corporation’s Motion to Dismiss Complaint, Fayette Cty. v. Cardinal Health et al., 17-cv-01957, Doc. 25 at 7-8 (S.D. W.V. April 13, 2017)) In addition, defendants have claimed that a legitimate doctor’s prescription breaks the chain of causation, precluding the manufacturers from being held liable for any resulting harm caused by opioids. (Id., Doc. 32 at 16-19) Finally, some claims have been contested under the Free Public Services Doctrine, which limits recovery of money spent by public entities to provide services. (Id. Doc. 36 at 7-8)
Investigations by State Attorneys General. State attorneys general have been suing opioid manufacturers and distributors at an increased pace. The current wave of cases began in 2015, with a case by Mississippi Attorney General Jim Hood; five other attorneys general have filed state-court lawsuits against manufacturers and distributors since 2015. Another 41 attorneys general collectively issued subpoenas to five manufacturers and distributors in September 2017, but have not yet brought suit.
In late 2017, the state of Washington brought suit against Purdue Pharmaceuticals under its state consumer protection statute that makes any company liable for deceptive business practices. Attorneys general also have relied upon common law claims for nuisance or negligence. And the judge handling the MDL has suggested he may reach out to the attorneys general to seek their participation.
The National Association of Attorneys General has taken a different approach, writing to America’s Health Insurance Plans requesting that the association encourage members to revise payment and coverage policies to prioritize non-opioid treatments for chronic non-cancer pain.
Criminal Prosecutions by Local District Attorneys and State Attorneys General. Local district attorneys and state attorneys general are stepping up criminal prosecutions of overprescribing doctors acting in violation of the CSA. In 2016, a Los Angeles County jury found a doctor guilty of murder based on unwarranted prescribing of opioids, and last July the New York State attorney general charged a doctor with second-degree distribution of narcotics for writing fraudulent prescriptions. On March 8, 2018, the Pennsylvania attorney general charged a psychiatrist for prescribing opioids for “pain management” without being certified in pain management.
Since 2016, Congress has enacted several funding bills to fight the opioid epidemic, including $3 billion for fiscal year 2018 and an additional $3 billion for fiscal year 2019 in the recently approved budget bill. In his latest budget, President Trump called for an additional $7 billion for fiscal year 2019. The administration has declared the epidemic a public health emergency, several federal agencies have initiatives underway and federal law enforcement is increasingly active. On March 21, the Attorney General issued a memo encouraging U.S. Attorneys to seek capital punishment in opioid-related cases “when appropriate.”
Medicare Prescription Drug Program (Part D). In 2013, the Centers for Medicare & Medicaid Services (CMS) adopted an opioid overutilization policy for its Medicare prescription drug program (Part D). Of particular note, CMS developed a comprehensive morphine equivalent dose (MED) approach to identify overutilizers, drawing on a method originally used in Washington state, as well as on the opioid product list and MED conversion factors maintained by the Centers for Disease Control and Prevention (CDC). On April 2, CMS published a Part C/D call letter and final rule that updated the policy for Part D plan sponsors for contract year 2019. It includes limits for opioid-naïve patients, identifying at-risk enrollees and case-management triggers, and allowing lock-in for at-risk enrollees.
Medicaid. Medicaid is the largest funding source for state opioid treatment efforts, with $9.4 billion spent in fiscal year 2013. In light of Medicaid’s critical role in the opioid epidemic, the administration has been criticized for proposing major cuts to the program. Meanwhile, CMS continues to strengthen Medicaid’s response to the epidemic, advising states in late 2017 that it would use its 1115 waiver authority to provide federal Medicaid matching funds for the cost of serving people in residential settings, including Institutions for Mental Disease.
Other federal agencies. The Centers for Disease Control and Prevention (CDC) published the CDC Guideline for Prescribing Opioids for Chronic Pain, the Food and Drug Administration (FDA) established an Opioid Policy Steering Committee, and the Substance Abuse and Mental Health Services Administration (SAMHSA) has distributed grant funding to expand treatment options, encourage MAT, distribute naloxone and train first responders.
Federal law enforcement. Federal law enforcement is moving aggressively to address the opioid epidemic. The Department of Justice (DOJ) has prosecuted doctors who have written opioid prescriptions that they knew would be diverted. Since 2013, a number of retail pharmacy chains have settled civil claims for amounts ranging from $3 million to $80 million. DOJ has also brought criminal and civil cases against distributors and manufacturers, including C-suite defendants. In addition, grand jury subpoenas are being issued by U.S. Attorneys' offices in multiple jurisdictions on multiple manufacturers. A Federal Grand Jury in the Southern District of Florida issued subpoenas to three opioid manufacturers on January 11, 2018.
Over the past 18 months, DOJ has emphasized the role data analytics will play in such investigations. For example, in August 2017, Attorney General Jeff Sessions established the new Opioid Fraud and Abuse Detection Unitthat will deploy data to identify and prosecute individuals contributing to the epidemic. In February 2018, Sessions announced the creation of DOJ’s Prescription Interdiction & Litigation Task Force, to coordinate criminal and civil efforts, examine pending lawsuits, and determine what assistance federal intervention might provide. The DOJ also will continue to use traditional theories of liability, such as the False Claims Act (FCA), that it has successfully applied in non-opioid cases, in the coming opioid cases.
Providers and Insurers
Physicians face the twin challenges of helping patients better manage chronic pain and treating opioid use disorders. And they must do this while managing the growing requirements of regulators and payers aimed at stemming the opioid epidemic.
State legislatures have been very active in regulating prescribing practices, with mandates to participate in prescription drug monitoring programs (PDMPs), limit opioid prescriptions and meet education standards. The challenge will be to avoid an over-reaction that inhibits appropriate use of opioids or overly burdens physicians trying to balance patient needs and potential harms.
Insurers also can play a major role in helping both patients and providers change their behavior around opioid use. Research conducted by the California Health Care Foundation suggests that plans can have a meaningful impact by supporting providers and patients in five areas:
- Education about alternative ways to manage pain, and comparative information about opioid prescribing rates
- Benefit modifications that encourage physical therapy, behavioral health services and complementary therapies
- Removal of preauthorization requirements for non-opioid pain medications
- Formulary changes such as dose limits, removal of dangerous formulations and “lock” programs for patients using multiple prescribers
- Modification or removal of preauthorization requirements for buprenorphine and naloxone
Pharmaceutical Manufacturers, Distributors and Pharmacy Chains
The pharmaceutical sector has been developing new medications to combat the opioid epidemic, revising policies for marketing existing pain medications, implementing appropriate monitoring to identify/prevent abuse and responding to a swell of litigation.
Proactive initiatives and remediation. In May 2017, the National Institutes of Health announced a public-private partnership designed to develop new therapies more quickly to “bring to market three types of drugs: non-addictive medications for chronic pain, better treatments for opioid addiction and improved methods of reversing opioid overdoses.” Many manufacturers are dedicating significant resources to clinical development of non-addictive pain medications, as well as drugs for treating opioid use disorder (OUD).
In February 2018, one manufacturer announced that its “sales representatives will no longer promote opioids to prescribers” and that requests for information about its opioid products will be handled through its Medical Affairs department. In 2016, in response to a lawsuit by the City of Chicago, another manufacturer proactively put in place a written code of conduct for the marketing of opioids.
Knowing that timely and voluntary disclosure of wrongdoing can positively impact the course of an enforcement action and the determination of charges and penalties, companies are taking remedial actions to help lower settlement amounts. (See, e.g., United States Attorneys’ Manual § 9-28.900 and § 9-28.1000) Some state attorneys general have been dissuaded from action by implementation of internal anti-diversion programs and vigorous auditing programs.
More recently, a pharmacy benefit manager rolled out an enhanced opioid utilization management approach that puts strict limits on prescriptions and requires the use of immediate-release formulations before extended-release are dispensed. Another pharmacy benefit manager launched the Advanced Opioid ManagementSM program in September 2017 and reported a 60% reduction in the average days’ supply per initial fill, from 18.6 days to just 7.5 days.
The discussion above paints a picture of broad mobilization against the opioid epidemic. Where will all this activity lead? The crisis can only be overcome if supply is reduced by enlightened law enforcement and better prescribing practices, demand is reduced by targeting environmental and individual risk factors, and outcomes are improved by supporting continued innovation in treatment and recovery support. Achieving these goals will require coordination across physical health, mental health and social services, as well as law enforcement and the justice system. It may also require significant investments in tackling the risk factors that make fertile ground for addiction.