The price reductions could alsobe a boon for Medicaidd, which spent nearly $160 million onSuboxone Film in 2018. (Photo: Shutterstock)

One of the most popular and effective treatments used to fightthe U.S. opioid epidemic is about to get muchcheaper.

Based in Hyderabad, a rambling boomtown in south India, Dr.Reddy's Laboratories Ltd. is a major supplier of generic drugs used by Americans for everythingfrom infections to cardiovascular ailments. After a two-year legalbattle, the company has won the right to sell a cheaper version ofSuboxone Film, the best-selling opioid addiction drug in the U.S.too.

That victory will bring generic versions of the therapy to theU.S. nearly four years sooner than expected, helping cut into thebill for a drug that can cost about $500 a month at a recommendeddose.

“It's potentially a really big deal,” said Brendan Saloner, anassistant professor at the Johns Hopkins Bloomberg School of PublicHealth, who has studied the opioid addiction crisis. Suboxone Filmhas “a really important role in the overall strategy of combatingthe overdose crisis,” he said, adding that placing patients on thedrug cuts their risk of overdose in half.

For now, the U.S. opioid epidemic shows few signs of abating:annual opioid overdose deaths in the U.S. are expected to climb to81,700 in 2025, a 147 percent increase from 2015, according to astudy last month by the Massachusetts General Hospital Institute ofTechnology Assessment. The human and financial costs have ledstates, counties and cities to sue drugmakers and distributors,seeking billions of dollars.

Suboxone Film allows the opioid-based drug buprenorphine to beabsorbed through the mouth to help control cravings and stave offwithdrawal. When combined with counseling and support services,that type of medically assisted therapy is considered one of themost effective ways to treat opioid addiction.

It's also expensive, especially for uninsured patients. SuboxoneFilm's inventor, U.K.-based Indivior Plc, has raised the price ofthe most popular 8-milligram dose four times since 2016, a 22percent increase, according to data from Symphony Health. Beforegenerics entered the market, it cost $8.56 a dose, or about $500 amonth for the twice-a-day treatment the National Institute on DrugAbuse calls most effective.

In a statement, Indivior said its price increases for SuboxoneFilm did not impact out of pocket costs for patients withinsurance, and were intended to keep pace with inflation and fundresearch into new drugs. It called the market for medicallyassisted treatment for opioid abuse “highly competitive.”

'At risk'

The legal fight between Dr. Reddy's and Indivior began in August2016, and centers on whether Dr. Reddy's version of Suboxone Filmviolates Indivior's patent. In June last year, the U.S. Food andDrug Administration said the two drugs were medically equivalent,and Dr. Reddy's decided to bring its version to market immediatelyin an “at-risk” launch.

It started sales last year, then had to halt them a month laterafter a federal judge issued an injunction in July. Last month, theU.S. Supreme Court ruled that Dr. Reddy's could resume sales,agreeing with a lower court that Dr. Reddy's was likely to win itsongoing patent case.

The legal fight isn't over, and Dr. Reddy's could face tens ofmillions of dollars in penalties if it eventually loses the patentcase. But G.V. Prasad, the company's chief executive officer, saidit was a gamble worth taking, and that he thinks Indivior hasfought so hard because generic competition puts their wholebusiness at risk.

Suboxone Film accounted for nearly all of Indivior's $1 billionin revenue last year. Since Dr. Reddy's version was approved by theFDA in June, Indivior's stock has dropped by 77 percent.

Threw everything

“I don't think they were willing to compromise on anything,”Prasad said in an interview from his book-lined office inHyderabad. “Sometimes companies work out a way to settle issuesoutside of the courts. I think this being a very large component oftheir business, they threw everything at it.”

Indivior referred questions about its stance on the legal caseto a Feb. 20 statement announcing it was releasing its own versionof generic Suboxone Film on the expectation more competition wascoming.

Dr. Reddy's 8-milligram dose began selling last month at $6.33,according to Symphony Health. Prices should eventually drop as muchas 70 percent, said Nitin Agarwal, an equity analyst who followsthe generic industry for IDFC Securities in Mumbai.

“Making this accessible and affordable will impact a lot oflives,” Prasad said. “We were able to push through and bring thegeneric to market very early. Of course others also followed, butwe were the guys who did the hard work.”

Price drop

Prasad predicts Dr. Reddy's will capture about a quarter of U.S.sales, splitting the rest with three other makers, includingIndivior's generic. He declined to say how far Dr. Reddy's willeventually drop its price, though said reductions would besignificant.

While Dr. Reddy's sells opioid products as well, its version ofopioid-painkiller oxycodone combined with acetaminophen accountedfor only 324 prescriptions in the U.S. in February, bringing inabout $68,410 in sales, according to Symphony data.

While there have been some reports of patients abusingSuboxone's opioid-based main ingredient, buprenorphine, addictionpsychiatrists have argued these kinds of fears are overblown. Thedrug doesn't cause intoxicating effects, and one study showedSuboxone, which combines buprenorphine with the opioid-reversaldrug naloxone, actually had less abuse potential than buprenorphinealone.

Medicaid's boon

The price reductions could also be a boon for Medicaid, the U.S.health care program for the poor. Four in 10 non-elderly adultswith opioid addiction are covered by Medicaid, according to theKaiser Family Foundation. In 2018 the program spent nearly $160million on Suboxone Film or other branded versions ofbuprenorphine, a report last month from the Urban Instituteshowed.

“Anything that cuts costs, whether it's to the state or federaldollars, will be critical,” Julia Zur, a senior policy analyst withthe Kaiser Family Foundation, said in an interview.

Read more: 

• Data-mined patient 'risk scores' being used topolice opioid use
• Opioids now kill more people than carsdo
• Understanding the president's opioidcommission

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