OIG Recommends Increased Access to Opioid Blocker Naloxone – Part 1 of 2

The opioid crisis continues to rage in the United States. Approximately 130 people die every day in this country from an opioid overdose. The quick administration of the drug naloxone plays a critical role in saving the lives of those who misuse opioids.?

Medicaid payments for naloxone have increased substantially. However, OIG found that despite this growth, Medicaid paid for only 5 percent of all naloxone distributed in the U.S. in 2018. Given these concerning statistics, OIG undertook a review of Medicaid's policies related to Medicaid coverage for naloxone.

In Part 1 of this article, we discuss the background of Medicaid coverage for opioid blockers, specifically why OIG conducted the review and the data collection methods they used to assess Naloxone coverage. Part 2 of this article addresses OIG's findings and recommendations and the plan for increased Medicaid coverage for at-risk beneficiaries in the future.?

Background

The first drug ever approved by the Food and Drug Administration (FDA) to reverse opioid overdoses, naloxone blocks the effects of opioids and restores normal breathing within minutes. For decades, the drug was only available for administration intravenously or by injection. As such, it was generally only accessible by emergency first responders and other licensed medical personnel.?

In 2014, the first "community-use" version of the naloxone — an autoinjector called Evzio — hit the market. Shortly after that, the FDA fast-tracked approval for Narcan, the nasal spray formulation of naloxone, under the brand name Narcan. People with minimal to no training can effectively administer Evzio and Narcan in emergency situations. However, both drugs are more expensive than the versions used by medical providers, raising concerns about the financial impact of the community-use formulations.?

As the opioid epidemic has grown, Medicaid beneficiaries have gained increasing access to Evzio and naloxone. In fact, Medicaid paid for 21 times more doses of Narcan in 2018 than in 2014. Nevertheless, despite the heightened need for the drugs and their greater availability, Medicaid payments accounted for only 5 percent of all naloxone coverage in the United States in 2018.??

OIG found these statistics particularly concerning given that Medicaid covers almost 40% of nonelderly adults with opioid use disorder. Even more alarming, Medicaid paid for relatively little naloxone in States with extremely high overdose death rates. Medicaid's low coverage for naloxone makes little sense given the statutory rebates that manufacturers pay to Medicaid.?

The Omnibus Budget Reconciliation Act of 1990 introduced the Medicaid Drug Rebate Program (MDRP). The program's purpose was to reduce State and Federal Medicaid expenditures for prescription drugs. Under the Act, manufacturers must enter into rebate agreements with the HHS Secretary and pay quarterly rebates to State Medicaid agencies to be eligible for federal funds for covered outpatient drugs under Medicaid. Additionally, manufacturers must enter into rebate agreements with the Secretary of HHS and pay quarterly rebates to State Medicaid agencies. Under these programs, Medicaid can recoup a large percentage of its naloxone spending.??

For example, in 2018, Medicaid received a significant discount off the list price for Narcan —the only form of naloxone currently covered under Medicaid that can be administered in emergencies by those with minimal to no training. In that same year, Narcan accounted for 9 out of 10 naloxone doses paid for by Medicaid. Surprisingly, Medicaid's net cost for Narcan in 2018 was less than the substantially discounted price Narcan's manufacturer offered to public health organizations.

Why OIG Conducted the Review

A review of emergency data found that when given naloxone, 94 percent of people survived an overdose. In early 2018, the U.S. Surgeon General advised that increasing the availability and targeted distribution of naloxone is critical to reducing opioid-related overdose deaths. Federal and State agencies have also increased their efforts to provide naloxone to more people in need. However, OIG believes more needs to be done. With Medicaid covering almost 40 percent of nonelderly adults with opioid use disorder, the program can play a pivotal role in increasing naloxone access.?

OIG determined to review Medicaid's policy regarding access to naloxone with three primary objectives:

• Determine how total naloxone utilization under Medicaid changed between 2014 and 2018;
• Determine what proportion of all naloxone distributed in the U.S. was paid for by Medicaid each year between 2014 and 2018; and
• Examine how statutory rebates impacted Medicaid payments for naloxone.

How OIG Conducted Collected Data to Determine Naloxone Utilization

Medicaid collects information for naloxone-related payments to satisfy its federally mandated reporting requirements. Additionally, states must report their Medicaid date each year. OIG reviewed this data, including manufacturer-reported sales of naloxone, to determine the utilization of the opioid blocker changed under Medicaid between 2014 and 2018.?

To conduct their review, OIG examined Medicaid spending and utilization information compiled during the designated years for both professional-use and community-use versions of naloxone. When analyzing the amount of naloxone paid for by Medicaid, OIG did not assess whether individual State policies may have led to utilization variations among States. OIG also relied on Medicaid drug spending data to determine how statutory rebates —paid by manufacturers to States —affected Medicaid's naloxone reimbursements during this period.?

In Part 2 of this article, we discuss OIG's findings and recommendations, as well as CMS's response.?

Conclusion

OIG remains committed to providing those in need with access to HSS services. By implementing a Mission, Vision, and Values strategy, OIG focuses on investigating, identifying, and eliminating fraud, waste, and abuse in all its programs. OIG also strives to ensure that all Medicare and Medicaid beneficiaries have access to the products — including life-saving medications like naloxone — they need to maintain good health.

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