Market Barriers to the Development of Pharmacotherapies for the Treatment of Cocaine Abuse and Addiction: Final Report. Critical Barrier 3: Limited and Uncertain Payment for Pharmacotherapy

09/12/1997

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.