Private Equity Acquiring Large Shares Of The Opioid Treatment Market Without Changing Market-Level Methadone Supply

Private equity (PE) acquisitions of opioid treatment programs (OTPs) are growing, with the potential to expand access to methadone, a critical yet underused medication that can cut the risk for overdose deaths by more than half. At the same time, PE's emphasis on short-term profitability has raised concerns from policy makers that PE acquisitions can consolidate ownership of OTPs among financial firms without expanding access to treatment. Using a difference-in-differences design with novel data on PE acquisitions of OTPs and methadone shipments to all OTPs during the period 2006-19, this study examined the effects of PE acquisitions on methadone supply. PE firms acquired 67 percent of the OTP market in the median county with any acquisition, often through multiple acquisitions within the same county. After acquisition, methadone shipments to PE-acquired OTPs increased by 13 percent relative to matched controls, but this was not statistically significant after adjustment for differential preacquisition trends, indicating that the increase was not driven by the acquisition itself. County-level methadone shipments and opioid mortality remained unchanged. Findings suggest that PE acquisitions of OTPs may consolidate ownership of OTPs among financial investors without changing methadone supply. Given policy makers' widespread call for increased supply, additional scrutiny of the impact of PE investment on patient access to methadone might be warranted.