Month: March 2022

At a Tennessee Crossroads, Two Pharmacies, a Monkey, and Millions of Pills

Prosecutors say opioid-seeking patients drove hours to get their prescriptions filled in Celina, Tennessee, where pharmacies ignored signs of substance misuse and paid cash — or “monkey bucks” — to keep customers coming back.

CELINA, Tenn. — It was about 1 a.m. on April 19, 2016, when a burglary alarm sounded at Dale Hollow Pharmacy in Celina, a tiny town in the rolling, wooded hills near the Kentucky border.

Two cops responded. As their flashlights bobbed in the darkness, shining through the pharmacy windows, they spotted a sign of a break-in: pill bottles scattered on the floor.

The cops called the co-owner, Thomas Weir, who arrived within minutes and let them in. But as quickly as their flashlights beamed behind the counter, Weir demanded the cops leave. He said he’d rather someone “steal everything” than let them finish their search, according to a police report and body camera footage from the scene.

“Get out of there right now!” Weir shouted, as if shooing off a mischievous dog. “Get out of there!”

The cops argued with Weir as he escorted them out. They left the pharmacy more suspicious than when they’d arrived, triggering a probe in a small town engulfed in one of the most outsize concentrations of opioids in a pill-ravaged nation.

Nearly six years later, federal prosecutors have unveiled a rare criminal case alleging that Celina pharmacy owners intentionally courted opioid seekers by filling dangerous prescriptions that would have been rejected elsewhere. The pharmacies are accused of giving cash handouts to keep customers coming back, and one allegedly distributed its own currency, “monkey bucks,” inspired by a pet monkey that was once a common sight behind the counter. Two pharmacists admitted in plea agreements they attracted large numbers of patients from “long distances” by ignoring red flags indicating pills were being misused or resold. In their wake, prosecutors say, these Celina pharmacies left a rash of addiction, overdoses, deaths, and millions in wasted tax dollars.

“I hate that this is what put us on the map,” said Tifinee Roach, 38, a lifelong Celina resident who works in a salon not far from the pharmacies and recounted years of unfamiliar cars and unfamiliar people filling the parking lots. “I hate that this is what we’re going to be known for.”

Celina, an old logging town of 1,900 people about two hours northeast of Nashville, was primed for this drug trade: In the shadow of a dying hospital, four pharmacies sat within 1,000 feet of each other, at the crux of two highways, dispensing millions of opioid pills. Before long, that intersection had single-handedly turned Tennessee’s Clay County into one of the nation’s pound-for-pound leaders of opioid distribution. In 2017, Celina pharmacies filled nearly two opioid prescriptions for every Clay County resident — more than three times the national rate — according to the Centers for Disease Control and Prevention.

Visitors once came to Celina to tour its historical courthouse or drop their lines for smallmouth bass in the famed fishing lake nearby. Now they came for pills.

Soon after Weir’s police encounter in 2016, the Drug Enforcement Administration set its sights on his two Celina pharmacies, three doors apart — Dale Hollow Pharmacy and Xpress Pharmacy. Separately, investigators examined the clinic of Dr. Gilbert Ghearing, which sat directly between Dale Hollow and Xpress and leased office space to a third pharmacy in the same building, Anderson Hometown Pharmacy. Its owners and operators have not been charged with any crime.

In December, a federal judge unsealed indictments against Weir and the other owners of Dale Hollow and Xpress pharmacies, Charles “Bobby” Oakley and Pamela Spivey, alleging they profited from attracting and filling dangerous and unjustifiable opioid prescriptions. Charges were also filed against William Donaldson, the former pharmacist and owner of Dale Hollow, previously convicted of drug dealing, who allegedly recruited most of the customers for the scheme.

The pharmacists at Dale Hollow and Xpress, John Polston and Michael Griffith, pleaded guilty to drug conspiracy and health care fraud charges and agreed to cooperate with law enforcement against the other suspects.

Ghearing was indicted on drug distribution charges for allegedly writing unjustifiable opioid prescriptions in a separate case in 2019. He pleaded not guilty, and his case is expected to go to trial in September.

‘An American Tragedy’

The Celina indictment comes as pharmacies enter an era of new accountability for the opioid crisis. In November, a federal jury in Cleveland ruled pharmacies at CVS, Walgreens, and Walmart could be held financially responsible for fueling the opioid crisis by recklessly distributing massive amounts of pain pills in two Ohio counties. The ruling — a first of its kind — is expected to reverberate through thousands of similar lawsuits filed nationwide.

Criminal prosecutions for such actions remain exceedingly rare. The Department of Justice in recent years increased prosecutions of doctors and pain clinic staffers who overprescribed opioids but files far fewer charges against pharmacists, and barely any against pharmacy owners, who are generally harder to hold directly responsible for prescriptions filled at their establishments.

In a review of about 1,000 news releases about legal enforcement actions taken by the Department of Health and Human Services since 2019, KHN identified fewer than 10 similar cases involving pharmacists or pharmacy owners being criminally charged for filling opioid prescriptions. Among those few similar cases, none involved allegations of so many opioids flowing readily through such a small place.

The Celina case is also the first time the Department of Justice sought a restraining order and preliminary injunction against pharmacies under the Controlled Substances Act, said David Boling, a spokesperson for the U.S. Attorney’s Office for the Middle District of Tennessee. DOJ used the civil filing to shut down Dale Hollow and Xpress pharmacies quickly in 2019, allowing prosecutors more time to build a criminal case against the pharmacy owners.

Former U.S. Attorney Don Cochran, who oversaw much of the investigation, said the crisis in Celina was so severe it warranted a swift and unique response.

Cochran said it once made sense for small pharmacies to be clustered in Celina, where a rural hospital served the surrounding area. But as the hospital shriveled toward closure, as have a dozen others in Tennessee, the competing pharmacies turned to opioids to sustain themselves and got hooked on the profits, he said.

“It’s an American tragedy, and I think the town was a victim in this,” Cochran said. “The salt-of-the-earth, blue-collar folks that lived there were victimized by these people in these pharmacies. I think they knew full well this was not a medical necessity. It was just a money-making cash machine for them.”

And much of that money came from taxpayers. In its court filings, DOJ argues the pharmacies sought out customers with Medicaid or Medicare coverage — or signed them up if they didn’t have it. To keep these customers coming back, the pharmacies covered their copays or paid cash kickbacks whenever they filled a prescription, prosecutors allege. The pharmacies collected more than $2.4 million from Medicare for opioids and other controlled substances from 2012 to 2018, according to the court filings.

Prosecutors say the pharmacies also paid kickbacks to retain profitable customers with non-opioid prescriptions. In one case, Dale Hollow gave $100 “payouts” to a patient whenever they filled his prescription for mysoline, an anti-seizure drug, then used those prescriptions to collect more than $237,000 from Medicare, according to Polston’s plea agreement.

Attorneys for Weir, Oakley, Donaldson, Spivey, Polston, and Griffith either declined to comment for this article or did not respond to requests for comment.

Ronald Chapman, an attorney for Ghearing, defended the doctor’s prescriptions, saying he’d done “the best he [could] with what was available” in a rural setting with no resources or expertise in pain management.

Chapman added that, while he does not represent the other Celina suspects, he had a theory as to why they drew the attention of federal law enforcement. As large corporate pharmacies made agreements with the federal government to be more stringent about opioid prescriptions, they filled fewer of them. Customers then turned to smaller pharmacies in rural areas to get their drugs, he said.

“I’m not sure if that’s what happened in this case, but I’ve seen it happen in many small towns in America. The only CVS down the street, or the only Rite Aid down the street, is cutting off every provider who prescribes opioids, leaving it to smaller pharmacies to do the work,” Chapman said.

Donaldson, reached briefly at his home in Celina on March 9, insisted the allegations levied against Dale Hollow and Xpress could apply to many pharmacies in the region.

“It wasn’t just them,” Donaldson said.

The Monkey and the Monkey Bucks

Long before it was called Dale Hollow Pharmacy, the blue-and-white building that moved millions of pills through Celina was Donaldson Pharmacy, and Donaldson was behind the counter doling out pills.

Donaldson owned and operated the pharmacy for decades as the eccentric son of one of the most prominent families in Celina, where a street, a park, and many businesses bear his surname. Even now, despite Donaldson’s prior conviction for opioid crimes and his new indictment, an advertisement for “Donaldson Pharmacy” hangs at the entrance of a nearby high school.

“Bill has always had a heart of gold, and he would help anyone he could. I just think he let that, well …” said Pam Goad, a neighbor, trailing off. “He’s always had a heart of gold.”

According to interviews with about 20 Celina residents, including Clay County Sheriff Brandon Boone, Donaldson is also known to keep a menagerie of exotic animals, at one point including at least two giraffes, and a monkey companion, “Carlos,” whom he dressed in clothing.

The monkey — a mainstay at Donaldson Pharmacy for years — both attracted and deterred customers. Linda Nelson, who owns a nearby business, said Carlos once escaped the pharmacy and, during a scrap with a neighbor’s dogs, tore down her mailbox by snapping its wooden post in half.

But the monkey wasn’t the only reason Donaldson Pharmacy stood out.

According to a DEA opioid database published by The Washington Post, Donaldson Pharmacy distributed nearly 3 million oxycodone and hydrocodone pills from 2006 to 2014, making it the nation’s 20th-highest per capita distributor during that period. It retained its ranking even though the pharmacy closed in 2011, when Donaldson was indicted for dispensing hydrocodone without a valid prescription.

Donaldson confessed to drug distribution and was sentenced to 15 months in prison. The pharmacy’s name was changed to Dale Hollow and ended up with Donaldson’s brother-in-law, Oakley. In 2014, Oakley sold 51% of the business to Weir, who also bought a majority stake of Xpress Pharmacy, three doors away, according to the DOJ’s civil complaint.

Under Weir’s leadership, these two pharmacies became an opioid hub with few equals, prosecutors say. From 2015 to 2018, Dale Hollow and Xpress pharmacies were the fourth-and 11th-highest per capita opioid purchasers in the nation, according to the DOJ, citing internal DEA data.

Many of these prescriptions were for Subutex, an opioid that can be used to treat addiction but is itself prone to abuse. Unless the patient is pregnant or nursing or has a documented allergy, Tennessee law requires doctors instead to prescribe Suboxone, an alternative that is much harder to abuse.

But at the Celina pharmacies, prescriptions for Subutex outnumbered those for Suboxone by at least 4-to-1, prosecutors say. In their plea agreements, pharmacists from Dale Hollow and Xpress described stores that thrived on the trade in Subutex, and said Weir set “mandates” for how many Subutex prescriptions to fill and instructed them to “never run out.”

Griffith, the head pharmacist at Xpress, said the pharmacy in 2015 created flyers specifically advertising Subutex, then delivered them on trays of cookies to practices throughout Tennessee, including some hours away. In the following two years, the amount of Subutex dispensed by Xpress increased by about eightyfold, according to his plea agreement.

Dale Hollow didn’t need flyers or cookies. It had Donaldson.

After getting out of prison in 2014, Donaldson was hired by the pharmacy he once owned, where he “recruited and controlled” about 50% to 90% of customers, according to the indictment filed against him. The pharmacy also enticed customers by distributing a Monopoly-like currency called “monkey bucks” — an apparent callback to Carlos — that could be spent at the pharmacy like cash, the indictment states.

Prosecutors also allege that, from a desk inside Dale Hollow, Donaldson would sign customers up for Medicare or Medicaid, then use a vehicle provided by the pharmacy to drive them to a doctor’s office to get opioid prescriptions, then back to Dale Hollow where he’d offer to cover their copays himself if they kept their business at the pharmacy. Sometimes, he would text the Dale Hollow pharmacist with instructions to fill specific prescriptions, or just to fill more of them, according to federal court records.

“Y’all have got to get your numbers up. Fill fill,” Donaldson texted Polston in 2018, according to his plea agreement.

By then, however, all those prescriptions had drawn unwanted attention.

In August 2018, Dale Hollow and Xpress pharmacies were raided by DEA agents, who brought with them Fox News’ Geraldo Rivera and a television crew. Six months later, DOJ filed its civil complaint, persuading a federal judge to immediately close both pharmacies.

Today, Dale Hollow Pharmacy sits shuttered, as it has been for the past three years, and a paper sign taped to the door says animals are not allowed inside by order of the DEA. The building that was once Xpress Pharmacy reopened this year as an unrelated pharmacy with a fresh coat of paint. Ghearing’s clinic and Anderson Hometown Pharmacy are closed.

Most of Celina’s opioid prescriptions are gone, too. According to the latest available CDC data, Clay County reported about 32 opioid prescriptions per 100 residents in 2020 — one-sixth the rate of 2017’s.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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Money Flows Into Addiction Tech, But Will It Curb Soaring Opioid Overdose Deaths?

Experts are concerned that flashy Silicon Valley technology won’t reach those most in need of treatment for substance use disorders.

David Sarabia had already sold two startups by age 26 and was sitting on enough money to never have to work another day in his life. He moved from Southern California to New York City and began to indulge in all the luxuries his newly minted millionaire status conveyed. Then it all went sideways, and his life quickly unraveled.

“I became a massive cocaine addict,” Sarabia said. “It started off just casual partying, but that escalated to pretty much anything I could get my hands on.”

At one particularly low point, Sarabia was homeless for three months, sleeping on public transportation to stay warm. Even with plenty of money in the bank, Sarabia said, he’d lost the will to live. “I’d given up,” he said.

He got back on his feet, sort of, and for the next three years lived as a “functional cocaine addict” until his best friend, Jay Greenwald, died after a night of partying. Finally, Sarabia checked himself into a rehab in Southern California — ostensibly a luxurious one, although Sarabia didn’t find it to be so.

Still, the place saved his life. The clinicians really cared, he recalled, although their efforts were hampered by clunky technology and poor management. He had the feeling that the owners were more interested in profits than in helping people recover.

Just days off cocaine, the tech entrepreneur was scribbling designs for his next startup idea: a digital platform that would make clinician paperwork easier, combined with a mobile app to guide patients through recovery. After he left treatment in 2017, Sarabia tapped his remaining wealth — about $400,000 — to fund an addiction tech company he named inRecovery.

With the nation’s opioid overdose epidemic hitting a record high of more than 100,000 deaths in 2021, effective ways to fight addiction and expand treatment access are desperately needed. Sarabia and other entrepreneurs in the realm they call addiction tech see a $42 billion U.S. market for their products and an addiction treatment field that is, in techspeak, ripe for disruption.

It has long been torn by opposing ideologies and approaches: medication-assisted treatment versus cold-turkey detox; residential treatment versus outpatient; abstinence versus harm reduction; peer support versus professional help. And most people who report struggling with substance use never manage to access treatment at all.

Tech is already offering help to some. Those who can pay out-of-pocket, or have treatment covered by an employer or insurer, can access one of a dozen addiction telemedicine startups that allow them to consult with a physician and have a medication like buprenorphine mailed directly to their home. Some of the virtual rehabs provide digital cognitive behavior treatment, with connected devices and even mail-in urine tests to monitor compliance with sobriety.

Plentiful apps offer peer support and coaching, and entrepreneurs are developing software for treatment centers that handle patient records, personalize the client’s time in rehab, and connect them to a network of peers.

But while the founders of for-profit companies may want to end suffering, said Fred Muench, clinical psychologist and president of the nonprofit Partnership to End Addiction, it all comes down to revenue.

Startup experts and clinicians working on the front lines of the drug and overdose epidemic doubt the flashy Silicon Valley technology will ever reach people in the throes of addiction who are unstably housed, financially challenged, and on the wrong side of the digital divide.

“The people who are really struggling, who really need access to substance use treatment, don’t have 5G and a smartphone,” said Dr. Aimee Moulin, a professor and behavioral health director for the Emergency Medicine Department at UC Davis Health. “I just worry that as we start to rely on these tech-heavy therapy options, we’re just creating a structure where we really leave behind the people who actually need the most help.”

The investors willing to feed millions of dollars on startups generally aren’t investing in efforts to expand treatment to the less privileged, Moulin said.

Besides, making money in the addiction tech business is tough, because addiction is a stubborn beast.

Conducting clinical trials to validate digital treatments is challenging because of users’ frequent lapses in medication adherence and follow-up, said Richard Hanbury, founder and CEO of Sana Health, a startup that uses audiovisual stimulation to relax the mind as an alternative to opioids.

There are thousands of private, nonprofit, and government-run programs and drug rehabilitation centers across the country. With so many bit players and disparate programs, startups face an uphill battle to land enough customers to generate significant revenue, he added.

After conducting a small study to ease anxiety for people detoxing off opioids, Hanbury postponed the next step, a larger study. To sell his product to the country’s sprawling array of addiction treatment providers, Hanbury decided, he would need to hire a much larger sales team than his budding company could afford.

Still, the immense need is feeding enthusiasm for addiction tech.

In San Francisco alone, more than twice as many people died from drug overdoses as from covid over the past two years. Employers, insurers, providers, families, and those suffering addiction themselves are all demanding better and affordable access to treatment, said Unity Stoakes, president and managing partner of StartUp Health.

The investment firm has launched a portfolio of seed-stage startups that aim to use technology to end addiction and the opioid epidemic. Stoakes hopes the wave of new treatment options will reduce the stigma of addiction and increase awareness and education. The emerging tools aren’t trying to remove human care for addiction, but rather “supercharge the doctor or the clinician,” he said.

While acknowledging that underserved populations are hard to reach, Stoakes said tech can expand access and enhance targeted efforts to help them. With enough startups experimenting with different types of treatment and delivery methods, hopefully one or more will succeed, he said.

Addiction telehealth startups have gained the most traction. Quit Genius, a virtual addiction treatment provider for alcohol, opioid, and nicotine dependence, raised $64 million from investors last summer, and in October, $118 million went to Workit Health, a virtual prescriber of medication-assisted treatment. Several other startups — Boulder Care, Groups Recover Together, Ophelia, Bicycle Health, and Wayspring, most of which have nearly identical telehealth and prescribing models — have landed sizable funding since the pandemic started.

Some of the startups already sell to self-insured employers, providers, and payers. Some market directly to consumers, while others are conducting clinical trials to get FDA approval they hope to parlay into steadier reimbursement. But that route involves a lot of competition, regulatory hurdles, and the need to convince payers that adding another treatment will drive down costs.

Sarabia’s inRecovery plans to use its software to help treatment centers run more efficiently and improve their patient outcomes. The startup is piloting an aftercare program, aimed at keeping patients connected to prevent relapse after treatment, with Caron Treatment Centers, a high-end nonprofit treatment provider based in Pennsylvania.

His long-term goal is to drive down costs enough to offer his service to county-run treatment centers in hopes of expanding care to the neediest. But for now, implementing the tech doesn’t come cheap, with treatment providers paying anywhere from $50,000 to $100,000 a year to license the software.

“Bottom line, for the treatment centers that don’t have consistent revenue, those on the lower end, they will probably not be able to afford something like this,” he said.

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

USE OUR CONTENT

This story can be republished for free (details).

Money Flows Into Addiction Tech, But Will It Curb Soaring Opioid Overdose Deaths?

Experts are concerned that flashy Silicon Valley technology won’t reach those most in need of treatment for substance use disorders.

David Sarabia had already sold two startups by age 26 and was sitting on enough money to never have to work another day in his life. He moved from Southern California to New York City and began to indulge in all the luxuries his newly minted millionaire status conveyed. Then it all went sideways, and his life quickly unraveled.

“I became a massive cocaine addict,” Sarabia said. “It started off just casual partying, but that escalated to pretty much anything I could get my hands on.”

At one particularly low point, Sarabia was homeless for three months, sleeping on public transportation to stay warm. Even with plenty of money in the bank, Sarabia said, he’d lost the will to live. “I’d given up,” he said.

He got back on his feet, sort of, and for the next three years lived as a “functional cocaine addict” until his best friend, Jay Greenwald, died after a night of partying. Finally, Sarabia checked himself into a rehab in Southern California — ostensibly a luxurious one, although Sarabia didn’t find it to be so.

Still, the place saved his life. The clinicians really cared, he recalled, although their efforts were hampered by clunky technology and poor management. He had the feeling that the owners were more interested in profits than in helping people recover.

Just days off cocaine, the tech entrepreneur was scribbling designs for his next startup idea: a digital platform that would make clinician paperwork easier, combined with a mobile app to guide patients through recovery. After he left treatment in 2017, Sarabia tapped his remaining wealth — about $400,000 — to fund an addiction tech company he named inRecovery.

With the nation’s opioid overdose epidemic hitting a record high of more than 100,000 deaths in 2021, effective ways to fight addiction and expand treatment access are desperately needed. Sarabia and other entrepreneurs in the realm they call addiction tech see a $42 billion U.S. market for their products and an addiction treatment field that is, in techspeak, ripe for disruption.

It has long been torn by opposing ideologies and approaches: medication-assisted treatment versus cold-turkey detox; residential treatment versus outpatient; abstinence versus harm reduction; peer support versus professional help. And most people who report struggling with substance use never manage to access treatment at all.

Tech is already offering help to some. Those who can pay out-of-pocket, or have treatment covered by an employer or insurer, can access one of a dozen addiction telemedicine startups that allow them to consult with a physician and have a medication like buprenorphine mailed directly to their home. Some of the virtual rehabs provide digital cognitive behavior treatment, with connected devices and even mail-in urine tests to monitor compliance with sobriety.

Plentiful apps offer peer support and coaching, and entrepreneurs are developing software for treatment centers that handle patient records, personalize the client’s time in rehab, and connect them to a network of peers.

But while the founders of for-profit companies may want to end suffering, said Fred Muench, clinical psychologist and president of the nonprofit Partnership to End Addiction, it all comes down to revenue.

Startup experts and clinicians working on the front lines of the drug and overdose epidemic doubt the flashy Silicon Valley technology will ever reach people in the throes of addiction who are unstably housed, financially challenged, and on the wrong side of the digital divide.

“The people who are really struggling, who really need access to substance use treatment, don’t have 5G and a smartphone,” said Dr. Aimee Moulin, a professor and behavioral health director for the Emergency Medicine Department at UC Davis Health. “I just worry that as we start to rely on these tech-heavy therapy options, we’re just creating a structure where we really leave behind the people who actually need the most help.”

The investors willing to feed millions of dollars on startups generally aren’t investing in efforts to expand treatment to the less privileged, Moulin said.

Besides, making money in the addiction tech business is tough, because addiction is a stubborn beast.

Conducting clinical trials to validate digital treatments is challenging because of users’ frequent lapses in medication adherence and follow-up, said Richard Hanbury, founder and CEO of Sana Health, a startup that uses audiovisual stimulation to relax the mind as an alternative to opioids.

There are thousands of private, nonprofit, and government-run programs and drug rehabilitation centers across the country. With so many bit players and disparate programs, startups face an uphill battle to land enough customers to generate significant revenue, he added.

After conducting a small study to ease anxiety for people detoxing off opioids, Hanbury postponed the next step, a larger study. To sell his product to the country’s sprawling array of addiction treatment providers, Hanbury decided, he would need to hire a much larger sales team than his budding company could afford.

Still, the immense need is feeding enthusiasm for addiction tech.

In San Francisco alone, more than twice as many people died from drug overdoses as from covid over the past two years. Employers, insurers, providers, families, and those suffering addiction themselves are all demanding better and affordable access to treatment, said Unity Stoakes, president and managing partner of StartUp Health.

The investment firm has launched a portfolio of seed-stage startups that aim to use technology to end addiction and the opioid epidemic. Stoakes hopes the wave of new treatment options will reduce the stigma of addiction and increase awareness and education. The emerging tools aren’t trying to remove human care for addiction, but rather “supercharge the doctor or the clinician,” he said.

While acknowledging that underserved populations are hard to reach, Stoakes said tech can expand access and enhance targeted efforts to help them. With enough startups experimenting with different types of treatment and delivery methods, hopefully one or more will succeed, he said.

Addiction telehealth startups have gained the most traction. Quit Genius, a virtual addiction treatment provider for alcohol, opioid, and nicotine dependence, raised $64 million from investors last summer, and in October, $118 million went to Workit Health, a virtual prescriber of medication-assisted treatment. Several other startups — Boulder Care, Groups Recover Together, Ophelia, Bicycle Health, and Wayspring, most of which have nearly identical telehealth and prescribing models — have landed sizable funding since the pandemic started.

Some of the startups already sell to self-insured employers, providers, and payers. Some market directly to consumers, while others are conducting clinical trials to get FDA approval they hope to parlay into steadier reimbursement. But that route involves a lot of competition, regulatory hurdles, and the need to convince payers that adding another treatment will drive down costs.

Sarabia’s inRecovery plans to use its software to help treatment centers run more efficiently and improve their patient outcomes. The startup is piloting an aftercare program, aimed at keeping patients connected to prevent relapse after treatment, with Caron Treatment Centers, a high-end nonprofit treatment provider based in Pennsylvania.

His long-term goal is to drive down costs enough to offer his service to county-run treatment centers in hopes of expanding care to the neediest. But for now, implementing the tech doesn’t come cheap, with treatment providers paying anywhere from $50,000 to $100,000 a year to license the software.

“Bottom line, for the treatment centers that don’t have consistent revenue, those on the lower end, they will probably not be able to afford something like this,” he said.

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

USE OUR CONTENT

This story can be republished for free (details).

Calls to Overhaul Methadone Distribution Intensify, but Clinics Resist

The pandemic has shown that loosening the strict regulations on distributing methadone helps people recovering from addiction stay in treatment. But clinics with a financial stake in keeping the status quo don’t want to make permanent changes.

Days typically start early for patients undergoing opioid addiction treatment at Denver Recovery Group’s six methadone clinics in Colorado. They rise before dawn. Some take three buses to get to a clinic by 5 a.m. for a 15-minute conversation with a counselor and their daily dose of methadone, all before they go to work or take their kids to school. Some drive more than an hour each way from Longmont or Steamboat Springs.

“They’re coming from a billion miles away,” said Dr. Andreas Edrich, the clinics’ chief medical officer, noting their strong motivation to get care compared with other patients who struggle to stick to a simple medication regimen. “Most people can’t take their blood pressure to save their life, and that’s in their kitchen cabinet.”

Patients who take methadone, a synthetic narcotic used to treat opioid addiction, must jump through more hoops than perhaps any other patient group in the U.S. due to rules dating back five decades. Proponents for easing the rules say the pandemic has shown certain constraints serve more as barriers to care than protections. And consensus is growing among clinicians, patients, and regulators that it’s time for change.

“There’s probably very few folks who work in the field who feel like we should continue the status quo,” said Dr. Shawn Ryan, a board member for the American Society of Addiction Medicine.

Now officials at the Substance Abuse and Mental Health Services Administration are considering permanent changes to federal methadone rules. A National Academy of Medicine workshop on methadone regulations on March 3 and 4 may signal an inflection point.

Additionally, Sens. Ed Markey (D-Mass.) and Rand Paul (R-Ky.) have introduced a bill that would codify the rules loosened during the pandemic, which allowed flexibility on take-home doses, telehealth, and treatment vans. It would also allow pharmacies to dispense methadone for opioid use treatment.

Any changes to federal rules, however, could face significant resistance from methadone clinics — many of them for-profit — whose financial models are built on daily patient encounters, counseling, and regular drug tests.

“There are some entities who have a financial interest in keeping things the way that they are,” Ryan said. “Change costs money.”

Currently, methadone can be dispensed only through federally regulated opioid treatment centers. Patients, at least initially, have had to show up in person each day to get their dose until they had proven themselves stable, primarily out of concern that they would sell the methadone or take more than their daily dose, risking overdose.

But the covid-19 pandemic prompted federal authorities to loosen methadone regulations, allowing more patients to take doses home and rely on telehealth consultations instead of in-person visits. Studies have found the flexibility didn’t result in any increases in overdoses, illicit sales of methadone doses, or people dropping out of treatment. Instead, patients have reported greater satisfaction and a higher willingness to follow their regimens.

“From that standpoint, the pandemic was an absolute blessing in disguise,” Edrich said.

One study found that the number of methadone take-home doses nearly doubled during the pandemic.

“We really couldn’t see any differences in terms of treatment adherence,” said Ofer Amram, an assistant professor studying health disparities at Washington State University.

That real-world experiment showed that many of the methadone rules might not be needed.

“In most other countries in the West, including Canada, it’s much easier to get access to methadone treatment,” Amram said. “You can get it in most pharmacies.”

But an Oregon Health & Science University survey of 170 methadone clinics found that fewer than half permitted new patients to take home a 14-day supply despite the loosened guidelines, and about two-thirds allowed existing, stable patients to receive the full 28-day allotment allowed.

“At the end of the day, patients with opioid use disorder want to be treated like everybody else,” said Dr. Ximena Levander, an assistant professor of medicine at OHSU and a co-author of the study. “There are a lot of other high-risk medications we dispense in medicine, but it’s only this one medication where it’s required for patients to go to this specific place to get treatment.”

Opioid treatment programs generally get reimbursed on a fee-for-service model: The more services they provide and the more tests they run, the more they get paid. A shift to a model in which a person comes to the clinic only once a month could severely restrict their revenue. According to a federal survey of methadone clinics, 41% were run by private for-profit companies in 2020, up from 30% in 2010.

“Most of these patients pay cash,” said Taleed El-Sabawi, an addiction and public policy professor at Georgetown University. “So if you are requiring urine tests often, if you’re requiring patients come in, if you’re requiring that they go through other hoops, they’re paying for that.”

And with cash payments, she said, no health plans are involved to question whether the services are medically necessary.

Denise Vincioni, regional director for Denver Recovery Group and a former director of Colorado’s State Opioid Treatment Authority, defended the existing regulatory framework.

“The rules and regulations protect our patients, give us parameters to work within, and also keep us safe as providers,” she said. “It’s a very risky business because you’re managing people’s lives with narcotics.”

Many patients, she said, end up appreciating the routine that creates the good habit of taking their methadone at the same time every day. Patients who haven’t put in the time or shown they’re not using illicit substances “haven’t demonstrated some of that entitlement,” Vincioni said. “Loose structure has been to their detriment.”

Vincioni suggested the clinics should have more leeway to decide when somebody is ready for take-home doses and to rely on their clinical judgment rather than strict parameters. Currently, if doses are diverted or the patient overdoses, the clinic could face repercussions.

“If something happens, it’s your butt,” she said. “That’s part of what has prevented us from doing a lot of that loosening up.”

Within the addiction treatment world, methadone patients are treated differently from patients who use other opioid addiction treatments, such as buprenorphine or Suboxone. Generally, buprenorphine is considered safer than methadone, with less risk of overdose, but methadone may be a better option for patients with chronic pain or who have been exposed to high amounts of fentanyl.

There’s also a racial-equity component. It’s often said that Black patients get methadone, which carries a stigma, while their white counterparts get Suboxone, a drug that prevents cravings for opioids. Part of that is because methadone clinics are often located in minority neighborhoods.

Levander said the recent focus on racial justice is driving momentum for changes to methadone rules.

“A lot of the federal regulations have a very racist history and undertone,” she said. “One of the things that is helping to catalyze this change is that motivation to try to right a wrong.”

Christopher Garrett, a SAMHSA spokesperson, said the agency can make some changes to methadone regulations on its own and is currently reviewing the flexibility granted during the pandemic. The agency has indicated that it plans to extend the flexibility for take-home doses another year, regardless of when the public health emergency ends.

Advocates caution that federal and state rules often conflict with each other, and sometimes are poorly aligned with the payment structure from Medicare, Medicaid, and other health plans. A Pew Charitable Trusts analysis, for example, found that in many states fewer than half of the opioid treatment providers accept Medicaid.

The two-day National Academy of Medicine workshop this month is expected to culminate in a report with possible policy change recommendations.

“I’m hoping that the momentum is now finally here,” said Dr. Gavin Bart, director of addiction medicine at Hennepin Healthcare in Minneapolis. “This is now being taken quite seriously.”

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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