Regulating Opioid Supply Through Insurance Coverage

Health Affairs 39, No. 9 (2020). https://doi.org/10.1377/hlthaff.2019.01351

UCLA School of Law, Law-Econ Research Paper No. 20-08

24 Pages Posted: 24 Sep 2020

See all articles by Chris Auld

Chris Auld

University of Victoria

Jill R. Horwitz

UCLA School of Law; National Bureau of Economic Research (NBER)

Ben Lukenchuk

affiliation not provided to SSRN

Lynn McClelland

University of California, Los Angeles (UCLA) - School of Law

Date Written: September 8, 2020

Abstract

Responding to an opioid crisis in Canada, policy makers have implemented supply-side interventions seldom used in the US, regulating insurance reimbursement to discourage the prescribing of specified opioids. Using national databases of all opioids dispensed through provincial pharmaceutical programs and of opioid hospitalizations from January 2006 through March 2017, we found that requiring physicians to obtain prior authorization for patients to receive reimbursement for OxyContin prescriptions substantially reduced OxyContin fills, particularly among opioid-naive patients; it also reduced overall opioid prescriptions, suggesting limited substitution. “Grandfathering” OxyNeo (an abuse-resistant OxyContin variant), allowing previous OxyContin patients to obtain OxyNeo, increased OxyNeo fills but had no detectable effect on total opioid prescriptions, which points to substantial opioid substitution among chronic users of prescription opioids. We found no effects of regulatory changes on opioid-related hospitalizations. These results suggest that restrictions on pharmaceutical formularies can reduce fills of targeted opioids with the additional benefit of altering treatment of opioid-naive and other patients differently. Canadian policy makers may wish to extend such regulations to more provincial formularies and private insurers, and policy makers in the US and elsewhere could fruitfully follow suit.

Keywords: opioid, regulation, Canada health policy

JEL Classification: I10, I11, I12, I13, I18

Suggested Citation

Auld, M Christopher and Horwitz, Jill R. and Lukenchuk, Ben and McClelland, Lynn, Regulating Opioid Supply Through Insurance Coverage (September 8, 2020). Health Affairs 39, No. 9 (2020). https://doi.org/10.1377/hlthaff.2019.01351, UCLA School of Law, Law-Econ Research Paper No. 20-08, Available at SSRN: https://ssrn.com/abstract=3693467

M Christopher Auld

University of Victoria ( email )

Victoria

Jill R. Horwitz (Contact Author)

UCLA School of Law ( email )

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Ben Lukenchuk

affiliation not provided to SSRN

Lynn McClelland

University of California, Los Angeles (UCLA) - School of Law ( email )

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States

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