Hundred dollar bills rolled up in a pill bottle

To Address the Overdose Epidemic, Tackle Pharma Industry Influence

By Liza Vertinsky

A recently released government report estimates that 93,000 people died from drug overdose in 2020. This estimate reflects a jump in the death toll of almost 30% from 2019 to 2020, with opioids as a primary driver.

In response, President Biden has called for historic levels of funding for the treatment and prevention of addiction and drug overdose.

Transforming mental health and addiction services is a critical part of tackling the overdose crisis, but it is not enough, on its own, to address this epidemic, or to prevent a future one. We must also alter the conditions that fueled expanded use, and abuse, in the first place. As I argue in Pharmaceutical (Re)capture, a forthcoming article in the Yale Journal of Health Policy, Law and Ethics, this includes a change in how we regulate markets for prescription drugs.

To truly combat the epidemic, I suggest, we have to understand how pain became such a lucrative business and how regulators failed to protect the public health as the market for prescription opioids grew. Then, we need to put this understanding to work in the redesign of pharmaceutical regulation.

Although an increase in the illegal use of synthetic opioids, such as fentanyl, accounts for many of the current overdose deaths, the overdose epidemic has its roots in the increased prescribing of opioids. As I describe in a case study of the opioid epidemic, these are drugs that have been developed through the direct and indirect use of public funds, incentivized by government grants of patent, data, and market exclusivities, approved for use by the U.S. Food and Drug Administration, prescribed by state-licensed physicians, paid for by highly regulated public and private insurers, and otherwise subject to government approval and oversight. I show how this epidemic emerged as the result of an intertwined evolution of medical approaches to treating pain, growth of the business of treating pain, and patient beliefs about the appropriate treatment of pain, an evolution largely driven by those with the largest financial stakes in opioid prescriptions and sales.

Pharmaceutical (Re)capture provides a framework for understanding the multi-faceted ways in which the largest industry players influence the operation of pharmaceutical markets, and uses this framework to expose the limitations of current regulatory approaches.

In an ideal world, regulations are designed to protect the public interest, but, in reality, special interests can sometimes dominate regulatory decisions – a phenomenon generally referred to as regulatory capture. While helpful in explaining why regulators may sometimes fail to adequately protect the public interest, this concept is too narrow to encompass broader forms of industry influence over all material aspects of pharmaceutical markets and their regulation.

Instead, I develop the concept of pharmaceutical capture to encompass the myriad of ways in which the largest corporate actors influence markets for prescription drugs, with the market for prescription opioids as a particularly salient example.

Pharmaceutical capture occurs when the magnitude and scope of corporate influence is significant enough to alter the incentive structures, and corresponding decisions, of a sufficient number of pharmaceutical industry stakeholders in ways that ensure that relevant markets yield the outcomes desired by the industry captors. Understanding how pharmaceutical capture occurs is an essential first step in improving the effectiveness of regulatory strategies in pharmaceutical markets.

Although recent court settlements with some of the largest manufacturers and distributors of opioids have resulted in industry payouts of as much as $26 billion, these payments pale in comparison to the profits reaped from opioid sales. More importantly, the court settlements do little to change the market conditions that allowed for the growth of opioid profits at the expense of public health. With the exception of Purdue, which is now in the midst of a bankruptcy reorganization, major manufacturers and distributers of opioids continue to operate in much the same fashion as they did before, with court settlements operating more like parking tickets than drivers of change.  Indeed, some of the very companies that benefitted from opioid sales are now reaping profits from the sale of treatments for addiction. Even the addiction treatment industry now has its own share of problems arising from the increasing demand for, and profitability of, addiction treatment services.

I conclude that an effective regulatory response towards the opioid epidemic must be geared towards addressing, and curtailing, pharmaceutical capture. Drawing lessons from the sophisticated corporate strategies used to influence market design, I offer three guiding principles for regulatory redesign. The first is the need for a holistic, systemic approach to regulation to replace current fragmented approaches. The second is the need to recalibrate key underlying policy assumptions about pharmaceutical markets and their appropriate regulation. The third is the need to make regulation more robust to corporate interests through strategies that narrow the divergence of private interests from the public interest, make capture more costly, and/or provide greater resources and rewards for regulating in the public interest.

Liza Vertinsky, Associate Professor, Project Leader for Global Health Law & Policy Project, Global Health Faculty Fellow, Emory University School of Law.

The Petrie-Flom Center Staff

The Petrie-Flom Center staff often posts updates, announcements, and guests posts on behalf of others.

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