Investing in Solutions to the Opioid Crisis
MARKET OVERVIEW - MARCH 2020
Opioids with high addictive potential have flooded the U.S. over the last decade. The addiction crisis has reached epic proportions, causing not only millions of deaths but also tremendous costs to society. Researchers and medical professionals recognize that addiction is a chronic disease, like diabetes or asthma, and it is also linked to poverty and trauma. Attempts to address the opioid crisis have been wide-ranging but insufficient. Expanded insurance coverage for behavioral health treatment has made an impact, but much more is needed to ease the pain and suffering of affected communities. While private equity investors have attempted to scale addiction treatment programs, these interventions are prohibitively expensive and often not covered by insurance. Private investors can fulfill a vital role by supporting new and distinct approaches. Entrepreneurs are using data and analytics to reach the most vulnerable victims of the opioid crisis: infants, teens, and low-income individuals. Many available solutions include risk screening tools, prescription digital therapeutics, recovery care programs, and alternative pain medications.
These solutions generate distinct but related health outcomes such as: reducing initial exposure to opioids, identifying behaviors associated with addiction and pain relief, and enabling greater individual self-worth. Other solutions include digital tools that enable peer-to-peer connection between individuals in recovery, and strengthen healthcare infrastructure by connecting pharmacists, providers, and patients. Some organizations and women’s shelters help recovering individuals to re-enter society with purpose and hope. But many of these solutions are still relatively new and need capital to scale. This market overview explores ways in which investors can leverage capital to mitigate the opioid crisis. Existing solutions have both market potential and public health value, and investors should focus on their efficacy and ability to align the interests of payers, providers, and patients. Key determinants of success drive impact measurement, which investors can integrate into their investment strategies. In summary, private investors no longer need to sit on the sidelines of the opioid crisis, and can instead be a part of the solution.