US opioid crisis package nears enactment

Medicare is to review ways to encourage use of non-addictive pain relievers, but Heron Therapeutics will miss out on extension of a special payment provision.

US legislation aimed at reducing opioid misuse now heading to the White House would order several government reviews on speeding development and promoting use of non-opioid pain relievers.

A measure that would have helped Heron Therapeutics as this company prepares to launch a novel non-opioid painkiller has not survived talks among congressional leaders. However, the legislation would require federal officials to review – with a view to overturning – Medicare payment policies that encourage hospitals and surgery centres to favour opioids over non-addictive drugs. The US FDA, meanwhile, would be required to look into eliminating barriers to the development of alternative types of pain relievers.

Broad support

A final congressional version of the SUPPORT for Patients and Communities Act passed the House of Representatives in the last two weeks. It has broad bipartisan support, earning a 393-8 vote in the House and 98-1 in the Senate, so President Donald Trump’s signature looks likely.

While much of the attention has been paid to expanding treatment and new law enforcement authority to prevent diversion of medication, policymakers are also intent on keeping patients from getting hooked in the first place. The trouble is that the legislation does not contain much concrete action.

A rifle-shot provision that would have extended a special Medicare payment from three to five years was not included in the final bill facing a Senate vote this week; the so-called “pass-through” payment is supposed to encourage hospital outpatient departments and ambulatory surgical centres to use non-addictive medications.

Heron would have been one of the most immediate beneficiaries of any extension. The company is due to seek approval for HTX-011 before the end of this year, and the project is one of the most advanced non-opioid post-operative pain relievers in development.  

Most hospital and outpatient care reimbursed by Medicare is paid a single flat rate intended to cover all medical costs, including pain-relief medications. Providers argue that this gives them an incentive to choose the cheapest drugs, typically generic opioids, since using a more expensive patented drug can cut into margins. Thus non-addictive medications have been granted a temporary “pass-through” payment at the rate Medicare compensates doctors for administering complex injectable drugs, average sale price plus 6%. Pacira’s Exparel received one through 2014, for example.

Not the worst news

While news of this measure’s omission caused Heron’s stock to drop last month, Cowen analyst Boris Peaker said the selloff was an overreaction because Medicare already planned to have a permanent pass-through at standalone surgical centres.

As for non-addictive pain relievers used at hospital-based surgical centres, which Medicare has yet to address, Mr Peaker wrote that he expected a similar permanent pass-through in place by the time HTX-011’s temporary pass-through expired, probably in 2022.

This is because the new legislation would order a review of Medicare and Medicaid hospital reimbursement policies that encourage practitioners to choose opioids over non-addictive treatments, a move due to be finished by the end of 2019.

As for development of non-addictive painkillers, the legislation would mandate an FDA review of its policies that could discourage biopharma companies from pursuing development. Among the issues that will be subject to the review, due to be completed a year after the legislation is enacted, would be allowance of novel clinical trial designs, evidentiary standards allowing for “opium sparing” data to be included on drug labels, and endpoints used in trials.

Expanding treatment and law enforcement capabilities and encouraging non-addictive pain relievers seem like good starts towards addressing opioid abuse. But much remains to be done to ensure that only patients with no other option receive these powerful but highly addictive painkillers.

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