The Senate Committee on Business, Professions and Economic Development on Monday passed a bill that would impose license surcharges on providers and tax drug manufacturers and insurers to fund the system.
Senate Bill 809, by Mark DeSaulnier, D-Walnut Creek, would impose a 1.16% licensing surcharge on providers who are authorized to prescribe controlled substances. The bill would also require the Board of Pharmacy to increase fees for wholesalers, out-of-state wholesalers of dangerous drugs and veterinary food-animal drug retailers by up to 1.16%.
Additionally, the bill will impose a tax “for the privilege of doing business” in California on drug manufacturers and insurers, including workers’ compensation carriers. The bill does not specify what the annual tax would be.
CURES needs the financial backing to operate, and if there is a tax on workers' compensation insurers to make that happen then it should be so - over the long term curtailing addiction to pain medication will lower the experience ratings of affected employers and ultimately should reduce the risk to carriers writing in the state.
This is particularly timely in that, as reported by the Wall Street Journal yesterday, the patent on the most popular opioid, OxyContin, expires today.
The Journal calls OxyContin one of the most powerful and abused painkillers on the market.
Usually when a drug patent expires manufacturers of generic versions jump in and supply the market with much cheaper copies.
In this case, though, the US Food and Drug Administration (FDA) is in the process of determining whether manufacturers will be allowed to produce generic OxyContin, or whether they may make only newer versions designed to impede abuse, which won't come off patent for several more years.
And there are some significant statistics that suggest that generic OxyContin without abuse impediment ingredients will only increase the nation's opioid issues.
There are powerful business interests tugging at the FDA. The Journal says the pain medication market is good for $9.4 billion in sales annually. OxyContin itself generated $2.8 billion in sales, 30% of the market, last year.
In 2010 OxyContin was infused with a polymer that made the pill more difficult to crush making the drug more difficult to inhale or inject. That innovation cost Purdue Pharma LP, manufacturer and patent holder of OxyContin, $100 million and the patent on that version of the drug doesn't expire until 2025.
According to Purdue, since the new drug went on the market sales have declined about 10%, which they attribute to its abuse-deterrent technology.
There is evidence that generics without abuse-deterrent technology would increase opioid abuse.
Opana is another painkiller that competes with OxyContin. Opana is manufactured by Endo Pharmaceuticals.
When OxyContin's new formulation was released in 2010 sales declined 7%. Opana, not yet reformulated with abuse-deterrent technology, increased 72%. Last year, when Endo reformulated Opana with abuse-deterrent technology sales dropped 25%.
A generic version of Opana without such technology was introduced in early January and the market share for it has been growing, according to the Journal. Experts interviewed in the article opine that this reflects increased abuse of Opana, by a factor of up to 80% more often.
While the FDA ponders what to do about opioids coming off patent, states also need to do their share to curtail opioids gone wild while still ensuring that those who need such medications are not unduly burdened or denied.
I think now is the time for California's CURES system, and the regulations that have been pending surrounding its application, to come into full operation. SB 809 is good for California and the state's workers' compensation system.