Private Equity: Senators Markey and Braun Seek Information on Role in Treatment for Opioid Use Disorder

On December 10, 2024, Senator Markey (D-Mass) and Senator Mike Braun (R-Ind.) sent a letter to various private equity (PE) firms who have invested in opioid treatment programs (OTPs). The letter requested information regarding how PE investment in OTPs is impacting access to, and availability of, medication for opioid use disorder (MOUD). In particular, the letter was interested in the impact on the accessibility of Methadone. This letter is the latest in the federal legislative’s, and Senator Markey’s, heightened scrutiny of private equity backed health care providers.

Treatment for OUD

Methadone is the most stringently regulated medication to treat opioid use disorder (OUD) and, due to federal regulations, is only accessible through OTPs. Although OTPs can vary in settings including intensive outpatient programs, residential programs, and hospitals, all OTPs require specific license certification by the Substance Abuse and Mental Health Services Administration (SAMHSA), a component of the federal Department of Health & Human Services, and accreditation by an independent, SAMHSA-approved accrediting body.

Contents of the Letter

According to the letter, approximately one in five Americans struggling with OUD receive MOUD. Markey and Braun’s letter notes that Methadone is a highly effective, proven medication that helps patients stay in recovery. However, the letter also notes that because of the strict federal regulation, access to Methadone is limited. Senator Markey has introduced bipartisan legislation called the Modernizing Opioid Treatment Access Act (MOTAA), which would lessen federal restrictions on Methadone and allow board-certified addiction psychiatrists and addiction medicine physicians registered with the Drug Enforcement Administration, regardless of whether they work for or in an OTP, to prescribe Methadone for opioid use disorder to patients. Although MOTAA has bipartisan support, it still faces some opposition from both parties, especially in the House of Representatives.

The letter notes, however, that some OTPs are opposed to the MOTAA legislation. The senators claim that it is “concerning” to them that the vast majority of OTPs also in opposition to the legislation are affiliated with private equity. Consequently, the Senators seek information about why OTPs are focused on keeping Methadone treatment limited to OTPs’ on-site locations. Additionally, they seek information about what aspects of the for-profit OTP business model are informing clinical decisions about patient care. The letter concludes by asking the firms to which the letters were sent to provide answers to 10 questions regarding their business objectives, financial performance, and their impact on clinical decisions, prescribing guidelines, and patient outcomes among other topics. The letter requests answers by January 10, 2025.

Conclusion

This is just another example of the heightened scrutiny of private equity’s investments into health care. If passed, the MOTAA likely will result in increased competition in the OUD space. However, OUD treatment providers and other stakeholders have voiced strong opposition to the legislation, noting that the prescribing of Methadone in less controlled and less regulated settings could have potentially dangerous implications due to an increase in the risk of diversion and abuse. Stakeholders in the OUD space as well as private equity firms interested in health care space more generally should be aware of increasing attention to this area.

Foley will continue to monitor these developments. Foley is here to help you address the short and long-term impacts in the wake of regulatory changes. We have the resources to help you navigate these and other important legal considerations related to business operations and industry-specific issues. Please reach out to the authors, your Foley relationship partner, or to our Health Care Practice Group and Health Care & Life Sciences Sector with any questions.