- Opioid addiction is challenging the U.S. healthcare industry even as doctors, nurses and clinics mobilize to battle COVID-19 — and impact investors are being called on to help.
- About 130 Americans die each day from opioid overdoses, and the price tag for the misuse of prescription opioids is steep: $78 billion in healthcare costs, lost productivity, treatment and criminal-justice activity.
- Boundless Impact Investing reports that at least 26 private equity deals worth $320 million were done in 2018. Another $293 million went to digital therapeutics investments in 2019, and the industry is expected to generate $9 billion in revenue by 2025.
Opioid addiction, the last big U.S. epidemic, hasn’t gone away even as the healthcare industry ramps up to combat COVID-19, and impact investors’ help is being sought.
“Death is still death, whether it’s from an overdose or an infection,” said Dr. Sarah Kawasaki, director of addiction services at Pennsylvania Psychiatric Institute and assistant professor of psychiatry and internal medicine at Penn State Health. And there’s a role for private investors to play in battling both opioid addiction and the global pandemic caused by the novel coronavirus, she said.
One of the cutting-edge fields in opioid-addiction treatment that’s getting a big boost from the social distancing mandated by COVID-19 is the use of so-called prescription digital therapeutics. These are healthtech devices and software that work hand in hand with traditional therapy and pharmaceutical treatment. Recovery programs were also incorporating online support services that are being challenged by the current lockdown in many cities and states.
The digital therapeutics market is forecast to grow to $9 billion by 2025, according to a new report by Boundless Impact Investing. It generated $293 million in investment last year. Additionally, there were at least 26 private-equity deals in 2018 worth $320 million that focused on traditional and alternative addiction treatment centers. About 130 people died each day in 2018 from opioid-related overdoses, according to government statistics.
“Deploying more private capital to address this crisis is paramount to developing interventions, alternative drug therapies and innovative new technologies,” according to the Boundless report. It stated that misuse of prescription opioids costs the country $78 billion in healthcare, lost productivity, treatment and criminal justice activity.
Treatment centers are facing some of the same challenges as other medical facilities across the country right now, with not enough personal protective equipment for staff. But the centers can’t close, because they provide essential care to an at-risk population, with many patients suffering concurrently with conditions that put them at risk for COVID-19 such as hepatitis, HIV and heart and lung disease, along with anxiety, depression and other issues.
“It’s absolutely an essential service,” Kawasaki said. “People in this situation are especially vulnerable and that’s why these treatments are necessary.”
Some of the most promising investment opportunities that will help long term include the development of risk-screening tools, the prescription digital therapeutics, recovery-care programs and alternate pain solutions as well as new medications that will wean patients off their addictions, according to the Boundless report.
Some of these are getting a dry run right now because of COVID-19.
“We are moving a lot of our services to telehealth,” Kawasaki said. When the clinic can provide a device or some sort — particularly for patients who wouldn’t have access otherwise — “it helps the patient gain more independence and be in their community.”
And because of social distancing, some states are easing restrictions on sending anti-addiction medicines like methadone home with patients, which could work well for patients that don’t need as much supervision and lower treatment costs.
“On the other hand, you worry about medication hoarding,” she said. “It’s just as possible as toilet paper. Patients could take it all at once and die. There have been cases already in Washington state, and we’re all preparing for that. Hopefully, it won’t happen.”
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