Millions of people are scrambling to navigate a byzantine Adderall shortage in a saga that has investors in Teva stock and other drug firms wondering if the industry can dig itself out of this new pit.
Teva Pharmaceutical (TEVA) is the biggest distributor of both generic and branded forms of Adderall, a popular stimulant that treats attention deficit hyperactivity disorder, or ADHD. Other big names include Novartis (NVS), Lannett (LCI), Mallinckrodt Pharmaceuticals (MNK) and Takeda Pharmaceutical (TAK). In theory, these companies should be in a good spot with Adderall prescriptions in the U.S. soaring 27% from 2019 to 2022, according to Iqvia, a clinical analytics company.
Experts trace the demand increase to two paradigm shifts. The pandemic stretched people's coping mechanisms to a breaking point, highlighting existing — but previously undiagnosed — cases of ADHD. In response, the Drug Enforcement Administration relaxed its rules, allowing substances prone to abuse, like Adderall, to be prescribed via telemedicine.
But this newfound demand has left people like Danielle Payton without the medicine that has helped manage the symptoms of her ADHD since she was a teenager. Payton, a 32-year-old publicist living in Miami, says she recently called 16 pharmacies within driving distance of her home. None had Vyvanse, a medication similar to Adderall. And, of course, no Adderall either.
"It's basically a phone tag game seeing who will take the call and who has the medicine," she told Investor's Business Daily. "I can't work, I can't concentrate, I can't be on hold one more time. I can't speak to another pharmacist who says no. My attention span is at zero."
Teva Stock: What We Know About The Adderall Shortage
The Adderall shortage is particularly bad news for Teva stock as the company is trying to expand its lead as the market grows to what's projected to be a nearly $29 billion market by 2031, according to research firm Expert Market Research.
Meanwhile, Teva could use the revenue as it contends with a steep, five-year sales decline caused by overall weakness elsewhere in the generic drug market. Teva stock — and generic drug stocks in general — have fallen since 2015 due to that weakness.
There's a lot of finger-pointing in the Adderall shortage, and much is still unclear.
Part of the problem stems from the fact that Adderall and its generics, known as mixed amphetamine salts, are classified as controlled substances.
This means the DEA views them in the same category as highly addictive drugs like oxycodone and fentanyl. So, every step of manufacturing, distributing and prescribing Adderall remains tightly regulated on the federal level.
Shortage Since October
The FDA announced the Adderall shortage in October. As of early March, a handful of drugmakers still reported shortages. Teva notes it's experiencing "unprecedented demand."
Alvogen also reported an increase in demand. Epic Pharma says it's having a hard time getting ahold of the active ingredient to make Adderall.
Investor's Business Daily contacted seven manufacturers of Adderall. None responded. But several company spokespeople told Bloomberg last year that the DEA limits how much Adderall each company can make in a month. The DEA hasn't raised those limits to keep up with demand, they said.
But the DEA says the companies didn't fully hit those limits in 2020, 2021 and 2022.
"Based on this trend, DEA has not implemented an increase to the (aggregate production quotas) for amphetamine at this time," the agency said in a December statement.
Other ADHD Medications Are Hard To Find
Duane Gordon, president of the Attention Deficit Disorder Association and an ADHD patient himself, says the supply chain issues will likely persist for some time, only making the Adderall shortage trickier.
"It all fell apart during the pandemic," he said. "And we're still struggling to put it back together."
That does little to soothe the frustration for patients like Jodie Porteous. Porteous is a 28-year-old social media influencer living in London. She was diagnosed with ADHD in November and given a prescription for Concerta, an Adderall-like stimulant used to treat the condition.
"From day one of taking it, I did find I noticed a difference," she told IBD. "It was almost like having blurry vision your whole life and putting on glasses for the first time. It had a significant impact for me from the word go."
But Porteous' diagnosis came at an inopportune time. Like the U.S. Adderall shortage, ADHD medication is becoming hard to find in the U.K.
Porteous describes a monthly "nightmare," not knowing whether she will be able to find her prescription. A pharmacist can't simply swap in another medicine or dosage. So, if her 54-milligram dose of Concerta isn't available, Porteous must get a new prescription from her doctor.
Other Drug Shortages
And it's not a simple matter of transitioning from one medicine to another, says Gordon. It can take weeks or months to find the right medicine and dosage. Porteous can attest to that. It took her four months to find the right Concerta dose.
"It's not as easy to switch medications as we would think," Gordon said. "That's going to have a big impact."
Although the FDA doesn't list Concerta or Ritalin as being in shortage, the American Society of Hospital Pharmacists lists both Concerta and Ritalin as being in short supply as of late February. Gordon takes Ritalin to control his ADHD, though he hasn't had trouble finding it in Canada.
A Big Potential Market For Teva Stock, Others
There's a lot of money, potentially, to be made in the burgeoning ADHD treatment market. Investors in Teva stock and generic drug stocks are likely watching the Adderall shortage unfold with interest.
Expert Market Research says the global Adderall market was worth $20.1 billion in 2022 and will reach $28.6 billion by 2031. Grand View Research says the U.S.ADHD treatment market was worth $13.2 billion last year and will hit almost $14 billion this year on its way to $18.7 billion by 2030.
But secrecy surrounds Adderall sales. Most companies don't break out their sales of Adderall or disclose their prices. The National Average Drug Acquisition Cost shows how much pharmacies pay for medications in the U.S. The publicly available database shows prices ranging from 26-70 cents per pill of generic Adderall.
In 2021, the latest year for which there are data, almost 1.9 billion branded and generic Adderall pillswere distributed in the U.S., according to Symphony Health. Teva distributed most of those, at 565 million. At the lowest generic price of 26 cents a pill, that would come to $146.9 million in sales. That doesn't account for the cut drug wholesalers would take of that 26 cents, however. And that's only U.S. sales.
Teva Stock: Sales Likely Higher
Teva's sales are likely higher than that, though, says Joey Mattingly, an associate professor and vice chair for research at the University of Utah's Department of Pharmacotherapy. Brand-name Adderall costs more per pill than its generic counterparts.
Publicly available data shows Veterans Affairs pays $2.61 a pill for the extended-release version of Adderall from Takeda. The agency pays $5.81 per pill for the immediate-release formula from Teva.
"The branded cost is a magnitude higher," Mattingly said in an interview, "15 to 20 times higher."
In December 2022, brand-name Adderall accounted for 17% of prescriptions, according to Iqvia. If that percentage is consistent at Teva, about 96 million of the pills Teva dispensed in 2021 were for the branded version of Adderall, with the remainder being generic. That would come out to nearly $680 million in sales.
Teva Acknowledges Scrutiny InAdderall Shortage
That Adderall sales estimate is a drop in the bucket for Teva. The company reported $15.9 billion in 2021 sales and pulled in $14.9 billion in sales last year.
But the shortage is another hit for already-depressed Teva stock and generic drug stocks. Shares of the Medical-Generic Drugs industry group have dropped off steadily since 2015. The 20-company group ranks a weak No. 158 out of 197 groups IBD tracks in six-month price performance. By market cap, Teva is the third-biggest company, trailing Haleon (HLN) and Viatris (VTRS). The industry group has a low IBD Digital Relative Strength Rating of 22, putting it in the lowest 22% of all groups in terms of 12-month performance.
Teva noted the difficulty of supplying the ADHD market — without mentioning the Adderall shortage — in a Securities and Exchange Commission filing in February.
"Prescription drug abuse and the diversion of opioids and other controlled substances are the frequent subject of public attention, including, for example, recent media reports over the appropriateness of prescription of medications used to treat attention deficit hyperactivity disorder," the company said.
Telemedicine In Diagnosis
The scrutiny certainly hasn't helped Teva stock. Other companies like Covid-era telemedicine startups Cerebral and Done are also under a microscope. The companies cropped up at the height of the pandemic to help manage an influx of patients experiencing new or worsening mental health conditions.
In an emailed statement to IBD, Cerebral said a typical intake appointment is 30 minutes long. The company encourages clinicians to "schedule as many follow-up appointments as they feel clinically appropriate before any diagnosis, prescription or referral."
An ADHD diagnosis cannot take place in such a short window, clinical pharmacist Reema Hammoud said in an interview. Hammoud works for Sedgwick, a third-party claims provider.
"The majority of their sessions are 15-30 minutes and after that they give a diagnosis of ADHD," she said. "I think we are rushing to diagnose (ADHD) in some cases."
Adderall Shortage And The Telemedicine Spike
When Gordon, president of the Attention Deficit Disorder Association, received his ADHD diagnosis, it involved two four-hour visits with a doctor. He recalled going through a "battery of tests" to rule out some 20 other disorders whose symptoms can mimic ADHD.
Dr. Jacques Jospitre, a board-certified psychiatrist with SohoMD, says depression, bipolar disorder and even a vitamin deficiency can look like ADHD. It takes time to rule out those conditions before settling on ADHD as the culprit.
But the Adderall shortage showcases another challenge in the health care system.
"When you look at the business model, they make more profit by seeing more patients and by getting more prescriptions done," Jospitre told IBD. "Because they have made that process more frictionless, they have helped to accelerate the growth and dispensing of medications, including stimulants."
It's a highly profitable business model, he says.
It's also prone to abuse, says Hammoud, the pharmacist. Adderall remains a recreational drug for its dopamine-increasing properties. The Centers for Disease Control and Prevention notes the risk of death due to stimulant overdose increased 317% from 2013 to 2019.
Meanwhile, telemedicine companies will soon have to contend with new DEA regulations when the Covid-related public health emergency expires in May. By the end of the year, telemedicine providers will no longer be able to prescribe Adderall or other stimulants without first involving an in-person provider.
Ahead of that, Cerebral says it has ceased prescribing controlled substances to new patients. Existing patients either weaned off Adderall or switched to in-person providers. Representatives of telemedicine startup Done didn't respond to a request for comment.
Regulations Will Tighten When Covid Emergency Ends
Despite the scrutiny, experts see a place for telemedicine in ADHD treatment.
There's an ease of access and comfort for people dealing with mental health concerns, Hammoud says.
"Because there was a stigma associated with behavioral health, a lot of people don't reach out," she said. "Secondly, there is a shortage of behavioral health physicians, especially in rural areas. Even if a patient wants to seek out help, I don't think it's available in every area."
That's another challenge soon facing ADHD patients amid the Adderall shortage. If they were receiving treatment and prescriptions solely via telemedicine, they will soon need to find an in-person provider. Doctors' offices already have jammed backlogs of people waiting for appointments.
Jospitre, the psychiatrist, expects a bit of a messy transition from the telemedicine prescription model.
"It's challenging because if you're a telehealth provider, your patients are dispersed all over the state," he said. "Everyone is within some distance of the office. There will be a reshuffling of patients. It's going to be kind of a mess in terms of getting things back in order."
He added: "But I think we'll figure it out."
Gordon, the ADDA president, favors a conservative approach to ADHD diagnoses. But, he acknowledges getting an ADHD diagnosis can be expensive, time-consuming and difficult to organize, especially for people who live in a rural area.
"It's no wonder you would turn to online telemedicine to cope with that," he said.
Teva Stock Flounders
Meanwhile, Teva stock continues to struggle. Shares traded north of 70 in mid-2015. Since then, they have fallen to below 10. Other generic drug stocks have done the same.
But patients have little concern about stock prices and revenue. They just want to avoid the monthly nightmare — the worry they'll lose more hours trying to find medication that helps them focus.
Porteous, the social media influencer, finds irony in that. The thing that helps her manage her ADHD — and the anxiety that can come with it — is causing her angst.
"Every month you're panicking and worried you're not going to be able to get (your medicine)," she said. "There's a lot of uncertainty and uneasiness. Is it going to be in stock? Is it not? Am I going to be a week without it? Am I going to have to change to a different one?"
She added: "It feels counterproductive that the very thing that's there to help is causing you so much extra stress."
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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