Concerns that changing methadone prescription laws will materially impact behavioral health providers are overblown, according to an analyst note from Jefferies Financial Group.
The relaxed buprenorphine laws have not substantially increased prescriptions. Therefore, on the business side, the softened methadone prescription regulations would not cause providers such as Acadia Healthcare (Nasdaq: ACHC) to lose a significant portion of its opioid use disorder (OUD) treatment business, according to the note.
“The effectiveness of these [legislative] moves in terms of how it could really shift access to care and care delivery are … maybe overblown in terms of the concern that methadone clinics will lose a lot of business as a result,” Brian Tanquilut, equity analyst at Jefferies, told Behavioral Health Business.
Franklin, Tennessee-based Acadia provides methadone-based treatment through its comprehensive treatment centers (CTCs). The company has continued to grow its CTC business, most recently acquiring three new North Carolina locations.
Jefferies analysts cited comments from Thomas Prevoznik, deputy assistant administrator for the Drug Enforcement Administration (DEA), at the Rx and Illicit Drug Summit, about buprenorphine to demonstrate that changing OUD medication laws do not necessarily impact the way that OUD medicine is prescribed.
Despite a law passed in 2022 that eliminated special training requirements for clinicians who prescribe buprenorphine, Prevoznik said that the total number of buprenorphine prescriptions dispensed remained steady, according to Politico.
While the law sought to expand access to buprenorphine, Prevoznik said that the stigma of people with OUD, low reimbursement rates and fear of DEA regulations have discouraged providers from operating under the full capacity of the law.
These same limitations will also limit the substantial impact of laws focused on methadone, Jefferies analysts said, despite concerns that developing legislation would shift patients away from methadone treatment centers like Acadia’s CTCs.
“Until those factors are addressed, and obviously these are not things that you can’t legislate because these are more societal in nature, I think it’s going to be the same thing [for methadone],” Tanquilut said.
One bill designed to increase access to methadone, the Modernizing Opioid Treatment Access Act (MOTAA), was recently passed by the Senate Health, Education, Labor and Pensions (HELP) committee.
The bill would allow board-certified addiction medicine and addiction psychiatry doctors who are registered with the Drug Enforcement Administration (DEA) to prescribe methadone that patients could pick up at a pharmacy, rather than visiting an opioid treatment program (OTP) every day to receive the medication.
“Methadone for opioid use disorder is locked behind arcane laws that criminalize and stigmatize people in recovery,” Senator Rand Paul (R-Kentucky) said in a statement. “The experts and evidence are clear: this outdated system is costing lives, and we should no longer stand by as outdated federal law keeps people from treatment they need no matter where they live.”
Many behavioral health organizations decried the bill, saying that the prescription of methadone through OTPs is essential for safe and effective methadone use.
Acadia was one of several behavioral health organizations, including Baymark Health Services and Crossroads, to join an initiative called Program, Not a Pill, that opposes MOTAA.
“[Impending methadone legislation] has been a concern for a lot of investors because obviously Acadia derives a good bit of earnings and revenues from their CTC operations,” Tanquilut said.
Investors have also expressed concern about recovery from Q4 of 2023, Tanquilut said. The fourth quarter is typically a weak quarter for admissions and some investors said Acadia’s Q1 was slower to recover than expected.
Guidance has already been released about that recovery, Tanquilut said, and worse than usual weather delayed some elective services.
Several lawsuits have also brought concerns about Acadia to the fore.
In 2023, Acadia agreed to pay $400 million to settle three cases filed against the company in New Mexico.
Another publicly traded behavioral health giant, Universal Health Services (NYSE: UHS), was also ordered to pay out a significant sum. A jury recently required the company to pay $535 million in damages related to a sexual assault lawsuit.
Both cases contribute to concerns surrounding litigation risk associated with behavioral health companies, Tanquilut said.
These concerns, along with misgivings about methadone legislation, are overblown and Acadia shares remain attractively valued, Jefferies analysts concluded.