It's just urine. But for a Baltimore company and a rival, it's liquid gold worth bruising legal battles.
When a patient is prescribed a powerful painkiller like Vicodin or OxyContin, many doctors require periodic urine tests to check dosage levels as part of safeguards to ensure the drug isn't being abused. Some states are making the practice law, and that means a big opportunity for Baltimore-based Ameritox Ltd. and other companies that have rushed to meet the demand.
The competition has spawned no fewer than a half-dozen lawsuits in recent years and what one judge called an "advertising war" between Ameritox and San Diego-based rival Millennium Laboratories. The companies have traded accusations that include false advertising, patent infringement and kickbacks to physicians.
Ameritox, facing allegations of kickbacks, settled with federal authorities for $16.3 million in 2010. The company said cash payments to doctors were to cover "specimen processing" and that it ended the practice in 2005, before a federal investigation. Meanwhile, a federal grand jury investigation into Millennium is continuing, and company officials said they are cooperating.
In a new lawsuit filed last month, Millennium accuses Ameritox of using kickbacks to drum up business, along with taking efforts to publicly disparage Millennium in news releases as a way to take back market share. Ameritox denies the claims, calling it "more of the same" from Millennium and similar to a lawsuit already dismissed in another court.
Such legal maneuvering can be common in industries where there are few differences among competitors' products, said William Hubbard, an assistant professor at the University of Baltimore School of Law. Sometimes, a cycle of litigation can develop, with new lawsuits filed as a way to resolve older ones, he said.
"There's always uncertainty in litigation, and litigation is expensive," Hubbard said. "As the potential of benefit grows rapidly, it becomes worth that risk to take."
The market for drug screenings — for patient monitoring as well as other purposes such as employee vetting — grew to $2 billion last year, according to market research firm IBIS. There are no dominant companies in the market, as most of them are regionally focused, according to IBIS.
Both Ameritox and Millennium have a significant footprint around their respective headquarters, with salespeople and other employees scattered across the country. Ameritox employs about 800, one-fourth of them in Baltimore and Columbia. Millennium employs about 1,200.
About 40 million people across the country take powerful drugs such as OxyContin on a regular basis to deal with pain, said Bob Twillman, director of advocacy and policy for the American Academy of Pain Management. As that number rose over the past decade, competition between Ameritox, Millennium and others became fierce.
"You go to meetings of the big pain management organizations, and you go into the exhibit area, and it would not be uncommon to find five or six different companies advertising there" for screening services, Twillman said. "It's really come along with more attention to the prescription drug abuse problem."
A sustained surge in prescription drug abuse has prompted doctors to be more vigilant and has led to efforts by some states — though not Maryland — to require more frequent monitoring of patients. That, in turn, stoked demand for companies such as Ameritox and Millennium.
In California, a study using data from that state's workers' compensation program found that drug-testing doctor visits for those on painkillers ballooned from about 4,000 in 2004 to more than 186,000 in 2011, and the total cost jumped from less than $200,000 to more than $27 million. Extrapolating to the entire state, researchers estimate nearly $100 million was spent on drug testing in California in 2011.
No similar study of Maryland data has been made, but the state has shown a spike in the prescription drug abuse and overdoses that the urine screenings seek to prevent.
The number of those seeking treatment for addiction to prescription drugs in the state jumped from more than 3,400 in 2007 to more than 7,000 in 2010, according to a state health department report. Since then, the rate of abuse has declined somewhat. A 2012 report found prescription opioid overdose deaths fell 15 percent, while heroin overdose deaths rebounded, rising 41 percent.
Doctors have made it standard practice to periodically screen patients who are prescribed opioid painkillers. The frequency depends on a patient's risk of dependence or addiction, something that doctors evaluate carefully, said Dr. Paul J. Christo, an associate professor of pain management at the Johns Hopkins University who hosts a weekly radio show on Sirius XM Radio – Family talk 131 called "Aches and Gains." Patients are mostly understanding of the need for monitoring, he said, given the risk of using the drugs.
"This is the standard of care," Christo said. "Things can get out of control. We're human and we make mistakes and we all understand that, and I think most of my patients do, too."
As competition in the drug screening industry has intensified, so have the legal battles.
For Millennium and Ameritox, the first clash came in November 2010, weeks after Ameritox agreed to the settlement with the federal government over allegations of kickbacks to doctors.
In a lawsuit, Millennium accused Ameritox of false advertising for marketing claims that its key product could not only detect the presence of a given prescription, but whether a patient was taking it at prescribed levels.
The companies reached an agreement in June 2012 in which Ameritox acknowledged several ads were false and agreed to no longer say its services could "confirm adherence" to prescriptions. The federal judge who approved the consent order agreement and dismissed the case expressed hope that would be the end of it.
The court "cautioned the parties that it had no intention of refereeing the advertising war that would likely follow" approval of the order, U.S. District Judge Benson Everett Legg wrote in a memorandum in January, as he dismissed related claims that had been rolled into the original lawsuit. "This proved a vain hope. Hostilities resumed within hours."
They have continued for years.
Since 2011, the companies have filed several lawsuits and countersuits in federal court involving disputes over patent infringement and unfair competition, some of which have been dismissed.
In one case that is still pending, Ameritox accused Millennium of providing kickbacks to labs in exchange for testing referrals. Millennium Vice President Martin Price said in an interview the company has never given kickbacks in exchange for referrals.
A case filed last month in Massachusetts federal court adds to the caseload.
In that lawsuit, Millennium accused Ameritox of funding lawsuits filed by former Millennium employees against it, as well as providing kickbacks to doctors in the form of free or discounted urine testing cups, dinners, computers and parties. Ameritox officials said they expect a judge to dismiss that case because a Florida court dismissed similar claims in a previous lawsuit.
Federal authorities in Massachusetts are meanwhile investigating Millennium, according to a November 2012 Reuters article. Proceedings of grand jury investigations are kept sealed, but some details came to light when former Millennium employees interviewed by investigators spoke with the news organization.
Price acknowledged the investigation but said company officials do not know what its focus is.
Officials from both Millennium and Ameritox said they are focused on preventing prescription drug abuse.
"The sad fact is that there is a national prescription drug abuse epidemic and scores of people are dying of overdoses every day," Ameritox spokesman Lon Wagner said. "So while Ameritox will continue to defend itself in court, we will remain focused on providing physicians with information to help them combat this epidemic."
Wagner said Millennium's lawsuits against Ameritox and several other competitors are a long-standing business tactic of the California company.
Millennium's Price said the same about Ameritox, and that its own lawsuits have been an effort to clean up an industry "rife with abuse."
"We feel like we're fending off Ameritox litigation and they'd rather fight in the courtroom than in the marketplace," Price said.
Opportunities for both companies and their competitors could be greatest in states like Kentucky, where laws passed in recent years require routine urine tests for those prescribed opioid pain relievers. Each test can cost several hundred to as much as $1,000, making the business a lucrative one, a fact not lost on Kentucky lawmakers.
"I need to go into the drug-screening business," Kentucky Rep. Stan Lee said jokingly in an interview with the Lexington Herald-Leader last year.
An earlier version had the wrong radio station for the Aches and Gains show. The Sun regrets the error.
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