Titan Pharmaceuticals Inc (TTNP)

[Doctor Detroit]

I’ve thought about it a bunch, and I don’t think it’s a question of sales and marketing investments or strategies or even patient acceptance; in my opinion it’s all about money and risk of loss between the insurance company, manufacturer, doctor and patient.

For both the implant and the injectable formulations, this situation involves expensive drugs with REMS that require use of a specialty pharmacy. In nearly all cases, prior authorization is required by insurance companies. Even if authorization is obtained, payment can be delayed for months (for Medicare and Medicaid, the situation is much worse, with payment being delayed over a year in many cases).

So hurdle #1 is that, even if a patient meets all the requirements for probuphine, a doctor has to obtain prior approval which can take months. During that period, some patients lose interest, some get frustrated and cancel and some relapse. Hopefully, the entry of Indivior into the market, additional pressure from Congress and the threat of lawsuits over violations of mental health parity laws will pressure insurance companies into dropping the prior approval requirements (Cigna and others already have).

But hurdle #2 is the buy and bill system. The doctor is required to buy the implants, and then bill insurance for reimbursement. So, even if prior approval is not required, there is a risk of denial of coverage and, even if coverage is granted, the risk of delayed payment. A doctor forced to purchase a $6,000 probuphine kit essentially has to carry that cost until payment is received from the insurance company. Doctors are not running charities, and many of them are just not going to be interested in floating that level of risk unless they work for larger healthcare systems that can afford to float the cost.

It seems to me the most logical solution would be for Braeburn or Indivior to assume the risk of nonpayment. They cannot bill the insurance company directly, but they could change the terms of payment so that doctors are not required to pay until they are paid by the insurance company. There would be a risk that in some cases, no payment would be received, but even so that is better than the current stalemate.