The Suboxone Business Fix

I have shared my thoughts about ‘Suboxone Film,’ a product that serves only one purpose:  to block generic competition from entering the Suboxone market.  Below I’ve copied a Bloomberg article that discusses the current nature of the buprenorphine/naloxone business, and the efforts by RB to prevent market penetration by generics– something that would lead to price reductions for healthcare consumers.

Unfortunately, the Bloomberg article overlooks the most significant threat to the profits of Reckitt-Benckiser.  This threat is mitigated only by the ignorance of many of the physicians who prescribe Suboxone.  The threat to profits consists of a simple fact that RB does not want anyone to realize:  that the generic equivalent of Suboxone is already available, in the form of orally-dissolving tablets of buprenorphine.

I encourage physicians who doubt my comments to do their own ‘due diligence’ and break out their old pharmacology textbooks.  I have a hard time understanding how people who graduated from accredited medical schools can get things as wrong as they do with this issue.  I sometimes present opinions, but not with this post.  The facts about buprenorphine and naloxone that I’m about to describe are described in any pharmacology textbook— e.g. Goodman and Gilman—and are not in dispute in any way.

Suboxone consists of buprenorphine plus naloxone.  Naloxone is an opioid antagonist that is added to reduce diversion of Suboxone in the form of intravenous injection of a dissolved tablet.  Naloxone is NOT ACTIVE when not injected.  The molecule is poorly absorbed through the oral mucosa because of the molecule’s size and poor lipid-solubility.  Instead, naloxone is swallowed, absorbed from the small intestine, and totally destroyed at the liver before reaching the systemic circulation through a process called ‘first pass metabolism.’

I suspect that some physicians confuse naloxone with the similarly-named substance naltrexone, an opioid antagonist (blocker) that IS orally active. There is NO naltrexone in Suboxone.

All of the beneficial aspects of Suboxone come from the partial agonist buprenorphine.  The ceiling effect of buprenorphine causes a reduction in cravings through a process that I’ve described in earlier posts.  Naloxone, on the other hand, does absolutely nothing to reduce cravings, to increase safety, to reduce euphoria, etc, provided that the medication is not injected.

The confusion surrounding buprenorphine essentially consists of intellectual laziness or intellectual dishonesty by the physicians who prescribe the medication and the pharmacists who dispense it.  I realize that not all doctors are cut out to be ‘physician scientists’ who understand pharmacology in great detail.  But I am particularly disappointed that the large organizations that supposedly oversee the science of addiction treatment have dropped the ball on this issue. I don’t know why groups like ASAM and SAMHSA don’t get it– whether the problem is ignorance, or whether there are mutually beneficial relationships between these organizations and RB that encourage the organizations to foster ignorance among
patients and doctors.  I don’t belong to the organizations primarily for this reason– and I blame ASAM and SAMHSA for the current status of addiction treatment as the ‘no science zone’ of modern medicine.

 A few examples of intellectual laziness: 

Example 1:  Physicians who prescribe Suboxone often say that one shouldn’t use buprenorphine ‘because it doesn’t have the opioid blocker and therefore….’ (add whatever here– it causes euphoria, it is addictive, it isn’t safe– any or all of these comments). The statement is partially correct. Generic buprenorphine does not have the opioid blocker naloxone— but naloxone is irrelevant to the actions of Suboxone!

There are TWO opioid blockers in Suboxone, but only one is clinically relevant—the one that is in both Suboxone and generic buprenorphine.  What is the relevant ‘opioid blocker’ that IS
in both Suboxone and generic buprenorphine?  Buprenorphine!   As a partial agonist, buprenorphine has antagonist properties that are responsible for ALL of the effective clinical properties of Suboxone.

Example 2:  Refusing to consider the cost of medication as a factor that determines access to treatment.  Some docs make ‘fear of diversion’ the only factor in determining what to prescribe.  Discussions with hundreds of opioid addicts over the years have convinced me that buprenorphine is rarely a drug of choice.  Rather, it is used by addicts who are sick and tired and want a break from using without withdrawal, or by addicts who have no money or access to agonists.  In such cases, buprenorphine or Suboxone are equally effective– and equally diverted.  When I ask addicts new to treatment about their injecting habits, I often ask whether they injected buprenorphine or Suboxone.  The typical response is either ‘can you do that?’ or ‘why would I do that, since heroin is cheaper?’

In my area, an 8 mg tab of buprenorphine costs as low as $2.33.  This low cost should be part of the equation for choice of medication, just as it is for other illnesses.  Does anyone doubt that there are some people kept from treatment by a price differential of 300%?!  Is it ethical to fear diversion so greatly that treatment is effectively withheld– for a condition with the fatality rate of opioid dependence?!   I’m sure readers know my answer, especially when there are effective ways to reduce diversion, such as close monitoring of prescribed doses, a ‘no replacement’ policy, and drug testing, among others.

Example 3:  There is some question whether the naloxone in Suboxone does anything to reduce diversion. Buprenorphine patients on my forum  who have injected Suboxone in the past have claimed that they did not experience withdrawal from either Suboxone or buprenorphine, consistent with what I would expect from combining a low-affinity antagonist with a high-affinity partial agonist.

Note: Injecting ANYTHING is in essence taking your life in your hands, and I strongly encourage anyone in such a position to seek treatment immediately.   Really—don’t do it.

Example 4:  Insurers generally refuse to cover generic buprenorphine (the generic form of the RB drug Subutex), even though it is much cheaper than Suboxone.  The one time they WILL cover Subutex or buprenorphine is for women who are pregnant or nursing.  The argument is that we shouldn’t expose the fetus/infant to one more drug (naloxone), since that drug isn’t necessary to the actions of Suboxone.  I agree with the argument, and wonder why it is extended only to the fetus?  Why does mom or dad have to be exposed to an extra substance(naloxone) that isn’t necessary to the actions of Suboxone?

I struggle to understand the insurance issue, as I would expect that someone at some major insurer would know enough about pharmacology to save money on Suboxone by favoring gen
eric buprenorphine.

The ultimate of silliness is that the State of Wisconsin requires that people on Medicaid use only Suboxone FILM.  Getting Abilify for a patient is virtually impossible without first using a variety of older, cheaper medications… but the squishy arguments in favor of Suboxone Film push the med up the formulary chain past an alternative that sells at a fraction of the cost.  The film/Medicaid situation is doubly dubious, as we have the arguments for buprenorphine over Suboxone, and the even less-sound argument for Suboxone Film being favored over the tablet.

RB apparently convinced the state that for Medicaid patients, only the film was safe– and that the film should be required instead of the tablet form of Suboxone, placing future generics at a great disadvantage.  It is especially impressive that RB accomplished this feat after selling a million units of the tablets themselves!  I can picture the person making the point:  ‘the tablet is unsafe…. Starting NOW!’

I’m going to write all night if I don’t wrap this up.  To summarize, the Bloomberg article below describes why RB is winning the battle with generics, but the writers of the article, along with most doctors, miss the bigger issue– that misplaced fears, intellectual laziness, and misinformation have protected Suboxone sales from a much greater foe-– generic buprenorphine.  If doctors, states, and insurers ever get their acts together and prescribe according to science, brand name Suboxone profits will go down the toilet faster than the cleaning products made by RB.

The Bloomberg piece:

Reckitt Benckiser Kicks Heroin Tablet Habit With Film: Retail

By Clementine Fletcher

Reckitt Benckiser Group Plc may be kicking its heroin problem.

After losing U.S. patent protection in 2009 for its Suboxone tablet, designed to help heroin users quit, Reckitt Benckiser has said that the entrance of a generic competitor could erode pharmaceutical sales and profit by 80 percent (note by JJ:  What a shame?!  Consider the benefit of such a price reduction for addicts in need of treatment!).

Reckitt Benckiser, which gets most of its revenue from selling home and personal-care products like Lysol cleaners and Durex condoms, has faced calls to sell the business before a generic comes to market. Instead, the London-based company aims to divert the showdown by switching users to a film form of the drug — one whose last patent doesn’t run out until 2025 (note by JJ:  NOW do you see why they made the film?!)

To get people to make the switch, Reckitt Benckiser is thinking more like a consumer company than a pharmaceutical one. It’s drawing on a marketing technique first pioneered by Coca- Cola Co. more than 100 years ago: coupons. By offering up to $45 a month toward a user’s co-payment in the U.S., the company is making the film version, which looks like a Listerine Pocketpak, close to free. That offers patients who get part of the bill subsidized by health insurance little incentive to transfer to a generic pill once it appears on the market.

“They’ve done a good job of making a silk purse out of a not very compelling situation,” said Martin Deboo, an analyst at Investec Securities Ltd. in London.

Reckitt Benckiser’s shares have risen 55 percent in the last five years, outpacing Unilever and Procter & Gamble Co. Under Chief Executive Officer Bart Becht, who stepped down last month, the company more than doubled sales in a decade. The stock has dropped 3.7 percent this year, compared with Unilever’s 4.7 percent gain and P&G’s 1.2 percent gain.

Drugs Growth

The company is due to report third-quarter results tomorrow and will probably say revenue adjusted for purchases and asset sales rose 7 percent at the drugs division, analysts led by Andy Smith at MF Global in London estimate, compared with a 3.9 percent increase for the rest of the business. Profit likely rose 0.9 percent to 430 million pounds, they said.

The film version of Suboxone, introduced in September 2010, accounted for 41 percent of the drug’s U.S. sales by the end of the first half (note by JJ:  Thanks, Wisconsin Badgercare!). That surpassed the company’s own expectations, Becht said on an Aug. 30 conference call arranged by Sanford C. Bernstein. Becht was succeeded by Rakesh Kapoor, a company veteran.

Generic Delay

The film “has been a phenomenal success,” Becht said, according to a transcript of his remarks. “To make the business completely sustainable, we would like to have a share which is clearly much higher than where we are.” He added that the company aims to grow that share every month.

Right now, time is on his side. Teva Pharmaceuticals Industries Ltd., the world’s biggest maker of generics, began the year saying it might launch a Suboxone copy in 2011. Now the company has backed off, saying it no longer expects the product to win regulatory approval this year.

Biodelivery Sciences International Inc., another drugmaker going after Suboxone, said a study comparing its own version of the drug to a placebo failed to show a statistical difference in the treatment of chronic pain. A test in patients addicted to opioids, which include heroin and codeine, is scheduled to begin
later this year. Titan Pharmaceuticals Inc. on Aug. 31 said it’s preparing to seek approval of an upper-arm implant that would deliver buprenorphine, one of
the active ingredients in Suboxone, directly into the bloodstream (note by JJ:  the ONLY active ingredient in Suboxone!)

‘Massive Benefit’

“This delay has been a massive benefit,” said Andrew Wood, an analyst at Sanford C. Bernstein. “With every day that goes by, RB has an extra day to convert users.” Suboxone is either harder-than-expected to copy or generic-drug makers are having second thoughts about targeting addicts, according to Bernstein.

About 1 million people in the U.S. are addicted to heroin, the National Institute on Drug Abuse estimates. As many as 325,000 people use Suboxone to quit the drug or painkillers, says Pablo Zuanic, an analyst at Liberum Capital in London.

The medicine combines buprenorphine, a painkiller derived from the opium poppy that shares some of its properties, with naloxone, a chemical that blunts
withdrawal symptoms (note by JJ:  This is simply WRONG.  BLATANTLY WRONG.  Really–  an opioid antagonist BLUNTING withdrawal symptoms?  Shame on the writers!). The film sells for about $4.63 to $8.23 a dose at Walgreens stores, according to Liberum, depending on its strength and pack size. That means the strongest dose costs about $247 a month.  (note by JJ—a pharmacy near my practice sells generic buprenorphine dissolvable tabs, 8 mg, for $2.33 per tablet—a medication that works EXACTLY the same way IF NOT INJECTED INTRAVENOUSLY)

More than half of people on Suboxone use private insurance with co-pay, Zuanic says. Reckitt Benckiser offers $45 towards co-pay for the film, he said, meaning an insured patient who’d contribute $50 to the cost of the drug may end up spending $5.

‘Near Zero’

“The actual cash cost for some patients buying the film with private insurance could be near zero,” Zuanic said in a note to clients this month. (note by
JJ:  but we are all paying the cost in higher insurance premiums, and some insurers, notably Humana, have draconian policies that stop covering—forcing instant withdrawal- if a patient receives a prescription for a sleep medication such as Ambien, so many people are left paying cash).

Meantime, Suboxone is only becoming more important to Reckitt Benckiser. The drugs division, whose sales grew five times as quickly as the main business last year, accounted for almost 9 percent of sales and 24 percent of profit, up from 7.6 percent and 20 percent in 2009. Sales a
t the unit will probably rise 12 percent to 829 million pounds ($1.3 billion) this year, according Nomura International Plc estimates.

The maker of French’s mustard is even considering making an injectable Suboxone and developing new products for cocaine, alcohol and cannabis addicts.
The plan has met skepticism.

“We’re quite a long way from having any visibility on these products,” said Julian Hardwick, an analyst at Royal Bank of Scotland Group Plc in London. “Are they products that will work? Which will get approval?”

Prescription drugs are perceived as a bit of a misfit in the home of Vanish stain removers and Finish dishwasher tablets.

Misfit

“Reckitt Benckiser is basically a home and personal-care company with over-the-counter pharmaceuticals,” said Carl Short, an analyst at Standard & Poor’s in London. The drugs unit is “always going to be something that looks like it doesn’t fit with the rest.”

Reckitt Benckiser may look at selling the unit, which Becht himself has said is “not the No. 1 strategic part” of the company, once a generic form of Suboxone reaches pharmacy shelves, analysts said. (note by JJ:  i.e. after all of the profit has been wrung from suffering addicts).  But the company’s marketing savvy, coupled with delays in the launch of a generic, are giving Kapoor time to settle into his new job.

“This is a big job and he is coming in after someone’s done it for some considerable time and very well,” said Julian Chillingworth, who helps manage about 16 billion pounds in shares at Rathbone Brothers Plc, including Reckitt stock. “You wouldn’t want to come in as a CEO into a very successful business and start selling things off on the cheap.”

Not Time

Analyst valuations range from 2 billion pounds to 6.3 billion pounds, according to four estimates compiled by Bloomberg News. Estimates diverge because it’s hard to value the business without knowing how Suboxone sales will resist the generic challenge and whether the shift to film can counter some of that impact.

“Until you get generic competition for the tablet, I think it’s unlikely that prospective buyers would give you the full value for the business,” said Hardwick of RBS. “Now is not the time to sell.”

–With assistance from Naomi Kresge in Berlin. Editors: Celeste Perri, Marthe Fourcade.