Canadian Health Policy Institute

Canadian Health Policy Institute

September 12, 2012 06:30 ET

Ontario Health Minister is Right; Social Cost of Generic OxyContin Abuse Exceeds Price Savings by Up to $415 Million Annually

TORONTO, ONTARIO--(Marketwire - Sept. 12, 2012) - Generic drug companies are seeking approval from Health Canada to sell discontinued abuse-prone formulations of the prescription drug OxyContin. OxyContin was replaced earlier this year with a new abuse-deterrent formulation called OxyNEO. Ontario's Health Minister Deb Matthews recently asked her federal counterpart not to approve generic OxyContin because the older formulation is prone to abuse, which causes social costs that outweigh expected generic price savings. New research published today by the Canadian Health Policy Institute (CHPI) suggests Matthews is right - the avoidable costs of OxyContin abuse could exceed the savings expected from generic prices by up to $415 million annually.

OxyContin is a controlled-release version of the opioid-derived prescription drug oxycodone. Abusers modify the drug by crushing tablets for inhaling or dissolving the tablets in fluid for injecting, which defeats the time-release property that moderates the dosage. While OxyContin is an effective pain reliever for millions of people, abuse of the product is associated with significant social costs including addiction rehabilitation, medical care, criminal justice and lost productivity.

Earlier this year, the manufacturer stopped selling the old abuse-prone version of OxyContin and replaced it with a new abuse-deterrent formulation called OxyNEO, which is resistant to crushing and dissolving. The substitution of OxyNEO for OxyContin has the potential to greatly reduce abuse while preserving health benefits for millions of legitimate users. But generic drug companies are now seeking Health Canada's approval to sell the old version of OxyContin once its patent expires.

In a June 6, 2012 letter, Ontario's Health Minister Deb Matthews asked Federal Health Minister Leona Aglukkaq not to approve generic versions of OxyContin stating, "Ontario believes that the costs to society of the reintroduction of the more-easily abused version far outweigh the financial benefits that would accrue from the reduced price".

The CHPI study examined the economic impact of withholding generic approval, which would result in permanent withdrawal of the abuse-prone version and full substitution with the new abuse-deterrent OxyNEO formulation. The findings were published in CHPI's online journal Canadian Health Policy.

The study calculates that for 2011 the annual social costs from OxyContin abuse could be as high as $504 million in Canada and $318 million in Ontario, while the annual savings expected from generic discounts on OxyContin across Canada would have ranged between $89 million and $152 million. In Ontario, corresponding generic savings estimates ranged between $52 million and $106 million.

For Canada, potentially avoidable costs outweigh expected generic savings by between $352 million and $415 million annually. OxyNEO substitution would need to reduce prescription drug abuse by as little 18 percent to 30 percent for the trade-off between allowing and prohibiting generic versions to be economically neutral.

The study was authored by Brett Skinner, Founder and CEO of CHPI. According to Skinner, "the available evidence suggests that generic Oxy would exacerbate social costs that could be avoided to a significant degree by substitution of the new abuse-deterrent formulation OxyNEO. Avoidable costs very likely exceed expected generic price savings. Most of the costs of OxyContin abuse are paid for directly or indirectly by governments - and therefore by taxpayers. Ontario's Minister of Health is likely correct, if Health Canada approves cheap generic Oxy it could end up costing us plenty."

About CHPI

Established in 2012, Canadian Health Policy Institute (CHPI) is a federally incorporated non-profit, independent think-tank. CHPI is dedicated entirely to conducting, publishing and communicating evidence-based socio-economic research on health system performance and health policy issues that are important to Canadians. CHPI's work is published in the online journal Canadian Health Policy,

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