Under current conditions, pursuing development of a new cocaine pharmacotherapy via a typical full product development cycle is not economically viable from the standpoint of industry. Although a variety of hurdles or procedural impediments may affect prospects for new pharmacotherapy development in this area, most of these are regarded as surmountable by the industry. However, three critical market barriers to significant progress in bringing an effective pharmacotherapy to a viable market are:
Many of the market barriers identified in the 1995 IOM report were confirmed through the sources used for this study. Although no new general types of new market barriers were identified in this study, certain ones were elaborated or described in a more contemporary context.
Two main categories of market barriers emerged from this study. Critical barriers are those that must be lowered or eliminated in order for pharmaceutical firms to regard the prospects for developing cocaine addiction medications as financially feasible. Non-critical market barriers are those that, if lowered or eliminated, may enhance, though perhaps only marginally, the financial outlook for developing cocaine addiction medications only if the critical barriers are also lowered. That is, without movement on the critical barriers, lowering non-critical ones would be unlikely to transform an otherwise unattractive market into an attractive one.
Among the diverse market barriers perceived by the industry, three emerged as critical in this study, i.e., those that would have to be lowered or eliminated in order to begin to make new drug development attractive to pharmaceutical companies:
Critical Barrier 1: Small and Uncertain Market for Cocaine Addiction and Abuse Pharmacotherapy
The small size and uncertainty of the market for cocaine pharmacotherapies constitutes a critical barrier to development of a cocaine abuse pharmacotherapy. Although all of the company executives interviewed for this study agreed that the total number of cocaine users is appreciable, they recognized that the feasible market for a cocaine abuse treatment is likely to be much smaller than the absolute number of people that use cocaine. Representatives of one pharmaceutical company use a conservative estimate of the number of heavy cocaine users that is about half of the level of 2 million cited in this report.
Uncertain market penetration was another reason for the skepticism in industry. Interviewees stressed that potential patient compliance problems and limited access to patients made them uncertain about the true market size for cocaine treatment. Representatives of two companies noted that most publicly-funded treatment centers are managed by non-physicians who tend to oppose the use of drugs to treat substance abuse, which such staff regard as a "behavioral" condition, thereby further restricting the potential sale of these drugs.
Critical Barrier 2: A Substance Abuse Treatment System that Limits Access to the Market
There are multiple, interrelated aspects of the current substance abuse treatment system that limit the market prospects for any new pharmacotherapy for cocaine addiction. These limitations are apparent in the case studies, were raised by company executives interviewed for this study, and are corroborated by modeling of certain scenarios. Sales of LAAM and naltrexone were restricted by the limited number of heroin and alcohol treatment programs and the limited capacity of these programs. Whereas 25 percent of opiate addicts receive treatment from the methadone maintenance programs, only about 5 percent of those afflicted by alcohol abuse and dependence are in alcohol treatment centers. Distribution of LAAM is restricted to maintenance programs as required by The Narcotic Addict Treatment Act of 1974. Prescription of naltrexone is recommended to be linked to enrollment in comprehensive treatment centers in order to improve patient outcomes. In contrast, because Nicorette is an over-the-counter formulation, patients need not visit a treatment center or a provider to obtain treatment, vastly expanding the drug's potential market.
The lack of medical treatment models in substance abuse treatment centers contributes to their being a critical market barrier. Pharmaceutical company executives cited an "anti-medication" climate among the publicly-funded treatment center staff that would severely limit sales of pharmacotherapies through treatment centers. Interviewees indicated that the large number of non-physicians (sometimes referred to as "non-prescribers") at treatment centers often have strong anti-medication sentiments. As noted above, recent surveys that have examined staffing patterns confirm that the substance abuse treatment system involves little or no physician time in the treatment of patients. This observation was confirmed in the LAAM and naltrexone (Trexan) case studies, which found that treatment decisions and funding for heroin addiction are often mediated by state-level substance abuse program administrators who often do not have clinical backgrounds.
Critical Barrier 3: Limited and Uncertain Payment for Pharmacotherapy
Industry decision makers recognize the heavy reliance of the substance abuse market on federal, state, and local government reimbursement. The perception among the drug companies is that many cocaine addicts do not have private insurance and rely on federal and state government sources for treatment, and that only a portion of those individuals with private insurance use their benefits for drug abuse treatment. One executive noted that substance abuse services continue to be subsumed under mental health benefits of entitlement programs, and that the overall budget for mental health services continues to shrink in light of other competing health priorities.
Payment status is a recognized barrier for LAAM, naltrexone, and clozapine. Treatment for heroin addiction (e.g., LAAM and naltrexone) has been funded primarily through federal and state budgets, making reimbursement difficult for pharmaceutical companies. As noted above, price sensitivity to a cocaine medication is another aspect of payment that poses a critical market barrier because price resistance may limit market size.
Industry Perception of Science Base Readiness
There was a divergence of opinion among the pharmaceutical company interviewees about the readiness of the science base for cocaine pharmacotherapies. Representatives of two companies expressed skepticism about the readiness of the science base. One representative indicated that current limitations stem from a lack of understanding regarding the biological and genetic basis of addiction. A representative of a different company indicated that the current science base for achieving long-term efficacy for cocaine abuse and addiction is very weak. Furthermore, scientists from one company judged that the probability of a scientific breakthrough in the area of cocaine abuse and addiction in the near future is very low. In contrast, representatives of another pharmaceutical company indicated strongly that the science base is ready, and consequently that it is no longer a market barrier to development of cocaine pharmacotherapies. This company also reported that it had successfully identified several drug candidates that exhibited cocaine blocking activities in both in vivo and in vitro models. Scientific executives from one company who questioned the science base did suggest that there are opportunities for existing and potential products to be used as effective adjuncts to cocaine abuse therapy. For example, existing drugs for anxiety could help manage symptoms associated with withdrawal. The extent of company interviews was limited by the scope of this project.
Overcoming Critical Market Barriers
Any public policies intended to improve opportunities for developing pharmacotherapies for cocaine addiction must address the three critical barriers described here. It is not within the scope of this study to identify or analyze specific public policies to promote development or marketing of pharmacotherapies for substance abuse. Nevertheless, during the course of this study, certain types of strategies or initiatives emerged that would serve to lower these barriers and make the development of new pharmacotherapies for cocaine abuse more attractive to the pharmaceutical industry, as follows:
Government Funding of New Drug Development
In general, the investment to produce a new drug for a small market is no different than producing a new drug for a large market, but a company is less likely to recoup its investment in a small market. Government funding of new drug development can raise the science base and move any promising drug closer to launch. Improving the science base can increase opportunities to create new drugs, and increase the likelihood of producing drugs that will be more effective and acceptable to a wider market. Any drug that has progressed toward launch poses less risk of failure, and shortens the time to revenues, increasing the present value of the drug. From the standpoint of industry, this can shift the balance of risk and reward by effectively decreasing the front-end investment required for entering this risky market. Government funding may take the form of extramural and intramural research, cooperative research agreements with industry, or otherwise owning or acquiring the rights to promising compounds and then offering these to pharmaceutical companies willing to complete the development cycle, as in the "guaranteed handoff" scenario described in this report. Thus, government funding of new drug development could counteract the barrier of the small and uncertain market.
Expansion and Enhancement of Substance Abuse Treatment System
Improving the substance abuse treatment system can address a critical barrier to market access. Greater funding of treatment centers could increase the number of patients treated. It could also increase available spending per patient, enabling greater market penetration and more substantial prices for effective drugs. Requiring all substance abuse block grant recipients to offer approved pharmacotherapies would increase the scope of the market, particularly to the extent that this could overcome bias against pharmacological treatment of substance abuse. Assuring coverage and sufficient levels of reimbursement for appropriate use of pharmacotherapies could increase market size and ensure sufficient prices. State-of-the-art clinical practice guidelines rendered by expert panels and sponsored by authoritative organizations could become the standard of care. Clinical and payment policies could change accordingly, expanding the market for designated treatments. Thus, expansion and enhancement of the treatment system could help lower all three critical barriers.
Guaranteed Market
Through purchase orders or other means, government and/or other major payers could guarantee a substantial minimum market for a cocaine addiction pharmacotherapy. Guaranteeing a market in terms of number of patients and/or a number of drug units, a given price, and a specified period of time, would address directly the barrier of limited and uncertain payment for pharmacotherapy. Further, it could decrease uncertainty and improve the size of the market, as well as effectively expand the treatment system.
Extended Market Exclusivity
The prospect of splitting a small market with competitors may render a project financially infeasible. Provisions for market exclusivity via the existing Orphan Drug Act and the 1984 Drug Price and Competition and Patent Term Restoration Act, and/or similar means are necessary but not sufficient for lowering the barrier of a small and uncertain market. These provisions alone cannot expand the absolute size of the small market, but they can protect against competition in it and reduce uncertainty about market penetration. LAAM and naltrexone (as Trexan) have been granted orphan drug status for specified opiate indications. Broadly interpreting the Orphan Drug Act for substance abuse medications (e.g., the standard for designating orphan status to drugs intended to treat a condition affecting fewer than 200,000 people in the U.S.) or other policies giving similar market protections to drugs for this market could encourage companies to enter this market.