This week we do a short but deep dive on the opioid crisis, given the data around where and who was behind the manufacturing and distribution of specific opioids:

  • How do opioids work, why these drugs?
  • Who’s to blame?
  • What are other directions for managing pain — and where could tech come in, even with the broader social, cultural, and structural context involved?

Our a16z experts in this episode are a16z bio general partners Jorge Conde and Vijay Pande, in conversation with host Sonal Chokshi.

Show Notes

  • Historical background on the opioid crisis, and current legal cases involving manufacturers [0:00]
  • How opioids interact with the brain and why they can be addictive [3:09]
  • Systemic reasons that lead to excessive opioid prescriptions, and who is to blame for the crisis [6:13]
  • Possible solutions for manufacturers, distributors, regulators, pharmacies, and physicians [8:30], and the need for better prescription management [13:16]
  • New technologies, including VR therapeutics, that may reduce the need for opioids [15:08], and a better understanding of addiction [16:35]


Sonal: Hi, everyone. Welcome to the “a16z Podcast.” I’m Sonal, and I’m here today with the fourth episode of our new short-form new show, “16 Minutes,” where we cover recent headlines the a16z way, offering expert takes on the trends involved and more. You can follow the show in its own feed in your favorite podcast player app.

Our other episodes cover multiple news items and topics, but this week we’re doing two separate, but short, deep dives connected to recent headlines. One on e-sports gaming and the future of entertainment, which you can find in this feed or at and this episode, which is on a sad but important topic, the opiate crisis.

Just to quickly sum up, the issues of the opiate crisis have been around for years, which is this prescription opioid epidemic that resulted in nearly 100,000 deaths from 2005 to 2012. And what makes it even sadder is that it disproportionately affected people from regions that are underserved economically — for instance, native American tribal regions, towns in West Virginia, and so on. For what opioids are, as a reminder, remember the word opium — they’re a class of drugs that include heroin, fentanyl, pain relievers like Oxycontin, Vicodin, Codeine, morphine, and most of those are pain relievers that are legal and available by prescription.

This crisis has been around for years, but here’s the news — the Washington Post and the publisher of the Charleston Gazette-Mail, which is a West Virginia paper — one of the regions that’s most impacted by this crisis — waged a year-long legal battle and won a court order for access to the drug enforcement administration’s database, which is this automation of reports and consolidated orders. It’s the ARCOS database. And basically, the Washington Post’s work helps visualize how much specific drugs went to individual states and counties, and who the top distributors, manufacturers, and pharmacies that were involved.

And according to the Post’s high-level findings, just three companies manufactured about 88% of the pills, and just 6 companies distributed 75% of them. And over the past couple of weeks, a number of lawsuits have been filed as a result of those findings. Arizona just filed a case against the maker of Oxycontin. Unusually, they did it directly at the Supreme court level, while towns and cities are suing pharmacies like Walmart, CVS, and Walgreens. In fact, nearly 2,000 cases have been brought as reported by the New York Times, and their headline for that story by the way, was so perfect and so starkly sad — “3,271 pill bottles, a town of 2,831.”

So, that’s a high-level summary of what’s going on, what’s in the news. I’d like to now welcome a16z Bio general partners Jorge Conde and Vijay Pande to talk about their views on this from their vantage point. Welcome, guys.

Jorge: Thank you.

Sonal: So, one bit of color from that New York Times story that is just so vivid and heartbreaking — one County in Ohio resorted to a mobile morgue just to handle all the corpses from people who died from overdoses, which is so sad. And as with all such things, science and technology does not live in a vacuum and plays out against a broader constructional context. So, I want to acknowledge that we’re going to be focusing on a specific angle, but really this is a huge problem on so many different levels. So, first of all, can you just quickly summarize the crisis from your point of view? Why opioid? What’s going on here?

How opioids interact with the body

Jorge: Well, first of all, opioids, as you said, are opium-based drugs, and it’s probably worth a moment to talk about kind of how they work and why they’re such a problem. <Yes.> Opioids basically target a receptor class within cells called the opioid receptors. And there’s three main classes, and the three main classes all have slightly different functions. And by the way, as we learn more biology — but I think identified another 15 or 20 subclasses of these things.

So, the biology, as you can imagine, is complex, but essentially what happens with an opioid is that it targets one or usually many of these receptors and that has the pain-numbing or painkilling effect. It also hits some of our, you know, essentially our pleasure-seeking centers. So, it has the addictive effect…

Sonal: Hence, the addiction.

Jorge: And by the way, it also hits other important receptors that are necessary for, sort of, our physiological function. Most notably, one of the subclasses of receptors is responsible for sending the signal to your brain that you need to breathe.

Sonal: Whoa, I had no idea.

Jorge: Yeah, no. A lot of people that overdose and die from opioids, <Oh…> really what they die from is forgetting to breathe. And in fact, like the recovery drug Naloxone, it basically competes for the drug off that receptor so the person actually comes back <Wow.> and remembers to breathe. So the drug itself is incredibly powerful, and I think one of the important things to remember is that addiction isn’t weakness. It’s not lack of willpower. It’s actually a weakness of the biology that the opioids target.

In fact, I remember when I was in graduate school, I took a pharmacology class, and the lecturer at the beginning said, you know, if I took this classroom of very accomplished, intelligent, driven, responsible graduate students, medical students, and gave everyone a dose of heroin, a significant proportion of a significant majority of this class would be hopeless addicts tomorrow.

So, a big part of the problem here is that this is a very, very powerful class of drugs. And what’s really tricky about opioids is that a more powerful drug is not necessarily a better drug.

Sonal: First of all, thank you for acknowledging that this is not necessarily a choice that people make. That’s really important, that it’s biology, but you also mentioned heroin in that example. And that one is an illegal one, which is of course a class of opioid, but most of these are prescribed. So I’m curious how that plays out.

Jorge: First of all, biology is a very dynamic system. And so if you take a drug, any drug, really, you start to — well, you tend to develop tolerance for it over time. And it can happen via various mechanisms, but one of the mechanisms that’s believed to be the case in opioids is that as you, essentially, take the drug, your receptors essentially become accustomed to it, and so it actually changes the dynamic of the receptors.

And people describe it as, you know, if you take opioids for a long time, you are quite literally changing your brain. And so the result of that is, if you’re taking a drug — and especially for relieving pain — you may need more and more of that drug to relieve pain. If that particular opioid also happens to target or hit one of the receptors associated with what’s linked to addiction, over time you’re going to seek more and more of it. So it just becomes a truly biological dependence at the cellular level for these drugs.

Origins of the crisis

Vijay: You know, it’s important to consider why patients are getting these in the first place.

Sonal: Right. Quite honestly, if that — if this is, kind of, by the biology, is that you become more addicted as you take it, why are they getting it?

Vijay: And there’s two reasons, which is somewhat of a shift. So one reason is that there’s been a recent shift in policy that essentially no pain is acceptable. So, you know, they often ask you if you’re in the ER or something, like, what’s your pain from 0 to 10. And it’s not that everyone’s saying 10 and then they get fentanyl, it’s the belief that no pain is acceptable. And this is actually very much an American thing. In other cultures, you know, you may be under extreme pain, but you’ll get tea, or you’ll get maybe Tylenol or something very different, and it’s just understood that you have to sit with the pain.

The second, man, it’s just the healthcare system now is so strained that if let’s say you have major back pain and you should maybe be seeing physical therapy or maybe you should be seeing a doctor for musculoskeletal, it may take you four weeks, six weeks to see that doctor.

Sonal: It takes time to see an expert.

Vijay: Yeah. But you could get the prescription immediately.

Sonal: So some of this is tied to health care access.

Vijay: Yeah. But then, you know, it puts them in this bind where they really should be getting physical therapy or something like that, and they are on this path. The third thing is that often the alternatives are harder short-term, like physical therapy is a lot of pain. And so this is just, it’s available, it’s thrown on you by a doctor and it’s easy. You put those things together, that’s the match on — that lights the fire.

Sonal: So, this is very helpful for helping break down the biology and the science behind this. It plays out against broader structural factors, cultural factors, political factors. This is a really big, important topic. And I have to ask, who’s to blame? Like, the interesting thing is that the news — there’s all the lawsuits happening to these pharmacies. And now the pharmacies and distributors, they’re coming back and saying, well, what about the impact of doctors and criminal drug dealers? Politicians — they are the ones who are trying to hide the database. There’s so many different players going around here. I want you guys to tell me, like, who’s to blame.

Jorge: I mean, embedded in the question is part of the answer. I think really what we have is a massive systemic failure. I mean, you talk about manufacturers, you talk about distributors, you talk about pharmacies, you talk about prescribing physicians, and ultimately, you talk about patients and their families and their caregivers and sort of the communities that support them. And then you also talk about the politicians, you know, the public health agencies.

Correcting systemic failures

I think the systemic failure here is pretty broad. So, we can start from the very beginning, which is — we do need better opioids. Now we do need better painkilling drugs. We need, as Vijay mentioned, to be more thoughtful about how and when we intervene with pharmacologic drugs for pain. One of the things that you can’t do with an opioid is you can try to design something that is only hitting the right receptor.

Sonal: This goes back to your earlier point about there being 15 types of receptors that are now being discovered. You can get more and more precise.

Jorge: Exactly. So, now that we can engineer cells and we can work with cells, we can find very precise ways to understand what molecules are interacting with what parts of the cell, and design molecules that are hitting just the right notes that we’re going to be, you know, more targeted. So, there is the potential for a better opioid. By the way, to date, most of the attempts to improve it have been to address the, you know, ways to not tamper with it, so you can’t overdose on it. But the reality is you can get a better molecule if we understand what’s driving the biology. So, that’s the first step on the manufacturing side. The second one is, yes, the distributors and the pharmacies. I mean, the biggest problem is that this is a very ad hoc, disjointed system that we have here in the United States.

Sonal: Like the healthcare system.

Jorge: The healthcare system. And so I think a lot of what you’re relying on in terms of the crisis is that there aren’t really the checks and balances and the alert systems that you would — one would expect in place that doesn’t require sort of a human being to say this, you know, employees flag one particular shipment, but that one particular shipment or that one particular prescription obviously doesn’t catch the systemic problem as it’s evolving. And so you’re really missing, you know, the forest for the tree.

Sonal: Is that a place that tech can help?

Jorge: It’s an absolute place that tech can help because, I mean, first of all, a lot of this is by requirement that you have to inform the public health agencies if there is the suspected overuse of a controlled substance. And so, instead of requiring people to voluntarily do that, you could deploy technology-based systems that essentially do that automatically.

Sonal: In fact, one of the quotes in the New York Times article came from a Walgreens official who said that he was the one who was tasked with monitoring the orders — said his department “was not equipped for that work.” I mean, that seems like an obvious place that tech could literally do what you’re describing.

Jorge: And it’s a place that tech could do it far better.

Sonal: Exactly. No, that makes great sense.

Vijay: You have to understand, I mean, what’s going on in a lot of these places, it’s Post-its, fax machines. It’s something where, you know, the things that we take for granted that on, sort of, just coordinate our daily lives — could be put in here and could really have a significant impact.

Sonal: Okay. So, let’s go back to the systemic players and failures. We have manufacturers, distributors — let’s continue breaking each one of those down.

Jorge: On the manufacturer side, there’s really two issues here. One is we do need better drugs, as we talked about. And number two — and I think this is a very important point — is, you know, a lot of times in companies as they’re commercializing drugs, obviously, the goal is to grow revenue and that can, you know, sometimes create perverse incentives to drive usage where perhaps there shouldn’t be usage. And I’m not saying that’s necessarily the case here, but that’s something that I’ve seen happen, unfortunately, across the industry over time.

The second issue is the distributors. The distributors are obviously responsible for moving product through the channel. They, of course, have incentive to move more product through the channel. And so, you know, if there are no controls in place, if the right tensions aren’t there between how things are prescribed, or how things are reordered, or how things are pulled through the system, that could also create a perverse incentive from a distributor standpoint.

And I think you show some of the concentration of what happened in the case of the — of this particular episode of the opioid crisis, as you’ve laid it out. So we do need checks against the distributors as well. When you get to the pharmacy, the pharmacy is where the rubber meets the road, right? These are where the prescriptions are getting picked up, or getting shipped to, at least. And so, if you don’t have, you know, a manual control system there — I actually think that the biggest problem is just lack of an alert system. If I go in today to pick up a prescription, there is no real system that would raise flags, at least not efficiently at the system-wide level. It tends to happen very episodically, as this story itself has shown.

And then, finally, there’s the physician prescription challenge. Because patients are in pain, the physician may not want them to tolerate pain, so may be more likely to offer this to offer immediate relief. Two, you get to the point where if you have to wait weeks and weeks and weeks to see a specialist or to get therapy, or to get treatment, this is a fast fix, short-term solution that eventually might become a longer-term problem, obviously, as addiction becomes an issue.

And the third one is — these are all related points, but physicians, for the most part, don’t have the right control systems to do really effective medication management. So my treatment of you is very episodic. I come — I see you, you describe pain, I will prescribe something. I may look in the notes and go back and see what had happened in the past, but I’m not really following this day to day.

Better prescription management

Sonal: And this by the way, applies across all health problems, not just pain and addiction. <crosstalk>

Jorge: All health problems. Medication management, medication reconciliation is a massive problem across the entire healthcare system. The particular challenge here, of course, is that this is the one area where a more powerful drug leads to more usage rather than less usage. And that’s what makes it so difficult when you can’t reconcile, you know, patient usage is happening over time.

Vijay: And there’s ways that we could work within the existing system. Like, one thing you could imagine is a PBM that is more involved…

Jorge: Pharmacy Benefit Manager.

Vijay: Yeah, Pharmacy Benefit Manager, that’s more involved with clinical care, where they’re just — they’re not the doctors, but at least they’re better interfacing with the doctors such that you can at least have sanity checks. Like, there’s no reason why a patient would need this. And this way you can’t shop around to multiple pharmacies because you’ve got the same PBM, and it is that layer.

And I think as you start to get smarter PBMs, these problems would be very naturally addressed. Not just for the opioid crisis, but it would be true for patients that have sometimes two or three drugs to treat the same condition, or three drugs that are actually gonna interfere with each other. Those are sometimes very difficult because in the medical system, you’ve got the endocrinologist and the cardiologist and the psychiatrist each prescribing without really any coordination.

Jorge: And you know, to that exact point, we have a problem in the healthcare system of getting things de-prescribed.

Sonal: What do you mean by that, de-prescribed?

Jorge: Well, patients might be taking a medication for an acute condition. And, you know, I saw the physician and the physician told me to take this medicine for condition X…

Sonal: You got a — you broke your arm and you need Vicodin…

Jorge: Or you may have, you know, you may have a heart condition that has a — that’s going through an acute episode. Any number of things that I’m on 10 different medications, it could be that the condition for which this one drug was given to me has since been alleviated, has since been addressed…

Sonal: But that information doesn’t get plugged back into the system to close that loop…

Jorge: Yeah, and I don’t know how to stop taking it, so I might be taking a medication that I don’t need for a long period of time. And if somebody doesn’t do the reconciliation that Vijay just described, I could be on many medications that not only interfere with each other, which is a problem, but that I may not even need, which is a different problem.

Possible tech solutions

Sonal: So, that kind of addresses it at the, sort of, structural, logistical level of the healthcare system. Now, back to the point you brought up about the biology and some of the pain management. I mean, there’s obviously alternatives like TENS devices, and all kinds of things that could potentially scale in the future to address pain, but now let’s go to what the fixes are. Obviously, there’s social societal things that need to be addressed, but what can tech and science help with here? Are there any other future directions from your vantage point on the bio side? Clearly, there’s technology to address the transparency, the PBMs, the pharmacy Benefit Managers, closing the loop, everything from manufacturer distribution to prescription. What are some of the other things, what are some of the interesting directions you see to help address this?

Jorge: Well, there are efforts to develop digital therapeutics, VR-type applications…

Sonal: Right. And by the way, digital therapeutics as in, like, apps and things like technology that can actually be — act as if a drug in helping people to better outcomes?

Jorge: Exactly. Maybe that can help you — get you into a state of mind that might help alleviate the pain, right? So, you know, if you can find different ways to address the pain issue, whether it’s, you know, physical therapies or something maybe novel like, you know, quite literally having a VR, virtual reality-type experience, or having an application on your phone that helps you meditate or calm down that might address some of the pain issues, you may not be as dependent on getting on the opioids in the first place.

Sonal: I’ve read a ton of papers, actually, that VR has already proven to be effective in helping with PTSD — post-traumatic stress disorders — with veterans coming back from wars, or, you know, people who are suffering severe depression. It’s just really amazing that it can help.

Societal influences on addiction

Vijay: Well, you know, I think often we are worrying about the consequences without thinking about the source. Jorge made a great point about how addiction is a natural consequence. There are other recent studies that talk about, sort of, a little deeper about why this is so.

So, the famous one is called the “Rat Park” study, where they actually had rats in a cage, which is kind of like jail, and given the choice between food or opioid, they’ll take the opioid until eventually, they kill themselves. But if you give them access to Rat Park where they can play and be social and, sort of, just live their normal happy lives, then actually giving the same choice they would choose the food and not the opioid.

We know that social determinants are a key part of healthcare — it’s just not wrapped into a fee-for-service kind of system, where no one’s job is to take care of these things. But if we could take care of the root causes of this, which are beyond just about prescribing drugs but about thinking about healthcare as a societal issue, I think then we can actually really have a huge effort.

Jorge: And there are several efforts ongoing now to use technology to help try to pull in all of those stakeholders in the community that can have such a big impact on some of these social determinants of health. Without that, this is another example of a fragmented system. A very analog system is — you’re doing this with call sheets, and coming up with referral names, and calling and trying to get appointments, and, you know, inbound visits and things like that.

And it’s all necessary because this requires human intervention, but the coordination shouldn’t also be human. So I think technology has an opportunity here to have a massive impact on how we coordinate all of these stakeholders. So the people that may be more susceptible given some of these social determinants are more supported.

Sonal: Right. And it just goes back to the bottom line for me, though, which is [that] technology is social, and it lives in a broader cultural context that clearly plays. Well, thank you so much, Jorge and Vijay, for joining the a16z podcast “16 Minutes.”

Vijay: Thank you.

Jorge: Thanks for having us.

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