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Hythiam Chairman and CEO Submits Testimony Before U.S. House of Representatives Committee on Government Reform

Posted on: Thursday, 29 June 2006, 09:01 CDT

Subcommittee on Criminal Justice, Drug Policy and Human Resources Receives Testimony on Availability and Effectiveness of Programs to Treat Victims of the National Methamphetamine Epidemic

Hythiam, Inc. (Nasdaq:HYTM), a healthcare services management company that licenses the PROMETA(TM) treatment protocols designed to treat alcohol, methamphetamine and cocaine dependence, announced today that its Chairman and CEO, Terren Peizer, submitted written testimony to the U.S. House of Representatives Committee on Government Reform, Subcommittee on Criminal Justice, Drug Policy and Human Resources, on the availability and effectiveness of programs to treat victims of the methamphetamine epidemic. Also providing testimony to the Committee were Charles Currie, administrator of the Substance Abuse and Mental Health Services Administration (SAMHSA); Nora Volkow, M.D., director of the National Institute on Drug Abuse (NIDA), National Institutes of Health (NIH); and Bertha Madras, deputy director for demand reduction at the White House Office of National Control Drug Policy (ONDCP), among others.

HOUSE TESTIMONY IN FULL:

"Chairman and Members of the Subcommittee, thank you for this opportunity to submit testimony on behalf of Hythiam, Inc. and the approximately 700 hundred patients who have been treated by our company's PROMETA(TM) protocols for substance dependence at medical facilities throughout the country. I would like to offer hope for all those afflicted with methamphetamine dependence and share with you a new option in the crisis we are experiencing as a result of methamphetamine use and abuse.

It is well established that there is a tremendous public need for treatment alternatives for methamphetamine dependence. The negative consequences of methamphetamine use and addiction are causing an unprecedented burden on both the public and private sector. We are all aware of how methamphetamine is driving an increase in violence, arrests, incarceration, emergency room visits, healthcare costs, workplace liability and loss of productivity. In fact, recent reports of increasing rates of addiction in older populations of Americans suggest that the burden of addiction on the public healthcare system will only increase. Even sadder is the negative impact it is having on families; in many communities an alarming number of children are ending up in foster care as a result of methamphetamine abuse.

Recent scientific studies support the fact that addiction is a brain disease. Current treatment focuses primarily on the behavioral components of the disease of addiction, attempting to retain dependent individuals in treatment long enough to allow the brain to heal itself, or at least teach patients ways to deal with the damage without returning to drug use. There is strong evidence that if patients can be retained in psychosocial treatment long enough, then some patients can achieve success. However, these success rates in most cases leave room for improvement. Retaining all individuals who seek help, especially during early treatment, remains a critical problem. We believe that adding treatments that target the biology of the disease to the existing psychosocial treatment models will better address the many aspects of this multi-factorial brain disease and assist in retaining patients in psychosocial treatment. Specifically, clinicians report a dearth of treatment options that are effective for methamphetamine dependent individuals.

The good news is that there is a new option that can help achieve this goal, one that appears to address the neurobiology of this disease, including decreasing cravings and increasing cognitive abilities, and some of its worst physical symptoms in combination with the best available behavioral treatments on an outpatient basis. This treatment is called the PROMETA protocol for methamphetamine dependence, and it is available on a private-pay basis through doctors at 40 locations throughout the U.S. PROMETA protocols are also receiving attention in the criminal justice field due to the results of pilot studies that led to the adoption of the protocols for drug court populations in Gary, Ind., and by Pierce County Alliance in Washington State. In these pilot studies, the PROMETA protocols increased retention and appeared to enhance patients' involvement in, and understanding of, psychosocial treatment programs. Retention, decreased cravings and greater early compliance to psychosocial treatment programs increase the likelihood of long-term abstinence, improve the efficiency of the treatment enterprise, lead to reduced costs per patient and ultimately increase overall access to treatment.

Background

Hythiam was founded to address a fundamental paradox that exists in the treatment of addiction. Scientific evidence demonstrates that the addicted brain is physiologically and chemically different from a normal brain. Changes in the neurochemistry of the addicted brain are the hallmarks of addiction, including craving, tolerance, withdrawal symptoms and relapse. Despite this fact, most approaches to treating addiction have been focused solely on a psychological or behavioral approach which can be characterized by lengthy treatment times and high drop out rates. Hythiam believes in combining both the physiological and behavioral within the context of one integrated treatment. We believe that an ideal treatment embodies the following:

-- 1. Effective acute medical intervention

-- 2. Full integration with psychosocial treatment modalities

-- 3. A treatment that patients value and are motivated to comply with

PROMETA(TM) Protocols

The PROMETA treatment protocols are designed to address the physiological, nutritional and psychosocial aspects of drug dependence. Hythiam licenses the intellectual property that comprises the PROMETA protocols to physicians who have been trained to use them. In most cases, the adopting program's existing psychosocial modality is utilized as the psychosocial component of the PROMETA protocol as they have been designed to address the specific needs of that particular population.

The PROMETA treatment protocols are comprised of nutritional supplements, as well as FDA-approved oral and IV medications used off-label and separately administered in a unique dosing algorithm, combined with psychosocial or other recovery-oriented therapy. Hythiam does not manufacture distribute or sell any of the medications used in the PROMETA protocols and has no relationships with any of the manufacturers or distributors of the medications.

For most people, the start of treatment includes a two- to three-day outpatient regimen. Patients are typically awake and alert during treatment and are given no habit-forming substances as part of the protocols. The initial treatment is followed by a specific medication and nutritional regimen over a period of about a month. Continuing care, such as counseling and group therapy, follows the initial treatment. The patient and treating addiction professional select the continuing care program to best suit the individual needs of the patient.

At the treating physician's discretion, PROMETA protocols may be used at any stage of recovery, ranging from treatment initiation to relapse prevention and maintenance of abstinence.

Access to the PROMETA Protocols Through Public Programs

Given the results that treatment professionals have reported in the commercial, private-pay population, Hythiam has initiated public-private partnerships to expand access to the PROMETA treatment protocols among people who depend on public programs. Current partners include the Gary, Ind. drug courts and the Pierce County Alliance (PCA), which services the vast majority of the drug court and broader criminal justice population in Pierce County, WA. The Gary, Indiana, pilot program has resulted in the City Court's designation of the PROMETA protocols as an approved treatment for stimulant dependence.

Dr. Terree Schmidt-Whelan, Executive Director of PCA, is providing separate testimony to this committee on the results of a pilot that PCA recently conducted on methamphetamine and cocaine dependence using PROMETA. The results were impressive enough for PCA to join the City Court of Gary in adopting PROMETA as its only medically based treatment option for stimulant dependence. Most importantly, many of these drug court participants who had previously failed multiple prior treatments (both inpatient and outpatient) now have a chance to rejoin society. Pilots have also been announced in Idaho and Arizona.

Hythiam licenses the protocols to healthcare providers and addiction treatment facilities for which it receives a licensing fee. The total cost of delivering the therapy also includes the medical costs of delivery of the therapy plus the cost of supplies and pharmaceuticals, which the licensee procures separately. The healthcare providers who deliver it set the price of the therapy. As with many innovative therapies, the cost of the treatment is anticipated to decrease from the private-pay rates that many licensees currently charge, especially as it migrates into a managed care environment. Reflective of the company's commitment to provide broad access, the company is currently making the protocols available to the criminal justice and public healthcare system for approximately one-third of its commercial license fee. The exact cost of the therapy delivered is anticipated to range from $3,500 to $4,500 depending on the purchasing and contracting arrangements that the public programs have with medical professionals and suppliers. Both Gary City Court and PCA are pursuing funding to enable them to offer PROMETA protocols through their programs from local, state and federal sources, as they believe, based on their historical experience, that the protocols provide them with superior outcomes on a cost effective basis by fostering shorter treatment cycles, higher abstinence rates and lower incarceration rates.

Clinical Studies of the PROMETA Treatment Protocols

Doctors administering the PROMETA protocols and other addiction professionals from the 40 sites that have been licensed to use the protocols have reported that they have found the protocols to be clinically effective in helping to treat their patients. We also believe that clinical trials to confirm these results are important. To that end Hythiam has made the protocols available to leading research institutions and investigators for evaluation through pilot programs and clinical studies.

-- A 50-patient, open-label clinical study testing the PROMETA protocol's efficacy for the treatment of methamphetamine dependency was conducted by noted researcher Harold C. Urschel, III, M.D., M.M.A., at Research Across America (RAA). Recently, Dr. Urschel reported that more than 80 percent of study participants experienced significant clinical benefit from the protocols, and 97% of participants who remained in the study reported a decrease in the frequency of craving. Dr. Urschel is submitting his specific study outcomes in separate testimony to this committee.

In addition to the study results Dr. Urschel and Dr. Schmidt-Whelan are sharing with you, I also would like to make you aware of other key evaluations of the PROMETA protocols that are currently underway:

-- Dr. Walter Ling, UCLA: 90-patient, randomized, double-blind placebo-controlled study using the PROMETA protocols for the treatment of methamphetamine dependence;

-- Dr. Raymond Anton, Medical University of South Carolina: 60-patient, randomized, double-blind placebo-controlled study using the PROMETA protocols for the treatment of alcoholism;

-- Dr. Jeffrey Wilkins, Cedars Sinai: 80-patient, randomized, controlled study using the PROMETA protocols for alcoholism;

-- Southern University: open-label evaluation of the effectiveness of the PROMETA protocols among drug court participants.

These studies are being independently conducted by the investigators and institutions noted who are responsible for the study design and implementation, and are supported by unrestricted grants from Hythiam. Our goal is to have reliable, independent clinical studies that will be broadly recognized as demonstrating the benefits of the PROMETA treatment protocols.

Conclusion

Private clinical practice, academic studies and pilot programs providing care to public populations have all reported experience with the PROMETA protocols that exceeds their historical experience in treating methamphetamine-dependent individuals. Both the Gary City Court and Pierce County Alliance have attested that the results they have experienced with the PROMETA protocols have far exceeded their expectations. These reports should form a basis for state and federal support and funding of the continued the use of PROMETA protocols in clinical practice and for expanding availability to public clients through clinical use and pilot evaluations.

Successful treatment of methamphetamine dependent individuals will create a value that far exceeds the quantitative reduction in public sector costs from reduced healthcare and criminal justice incidents. Individuals will return to work and family with dignity, serving as positive role models to others who struggle with drug addiction."

The Committee also received testimony from Dr. Harold C. Urschel of Research Across America, who recently completed a 50 patient study on the PROMETA protocol for methamphetamine, and from Terree Schmidt-Whelan, executive director of the Pierce County Alliance, which experienced success in its pilot using PROMETA for methamphetamine dependence with participants from Pierce County's criminal justice system.

About PROMETA(TM)

Hythiam's PROMETA treatment protocols are designed for use by healthcare providers seeking to treat individuals diagnosed with dependencies to alcohol, cocaine or methamphetamine, as well as combinations of these drugs. The PROMETA treatment protocols comprise nutritional supplements, FDA-approved oral and IV medications used off-label and separately administered in a unique dosing algorithm, as well as psychosocial or other recovery-oriented therapy. As a result, PROMETA represents an innovative approach to managing alcohol, cocaine or methamphetamine dependence that is designed to address physiological, nutritional and psychosocial aspects of the disease, and is thereby intended to offer patients an opportunity to achieve sustained recovery.

About Hythiam, Inc.

Hythiam(R) is a healthcare services management company focused on delivering solutions for those suffering from alcoholism and other substance dependencies. Hythiam researches, develops, licenses and commercializes innovative physiological, nutritional and behavioral treatment protocols that seek to address substance dependence. Additionally, Hythiam provides proprietary administrative services to assist physicians and facilities with staff education, marketing and outreach support, and outcomes tracking for data analysis. For further information, please click on www.hythiam.com.

Forward-Looking Statements

Except for statements of historical fact, the matters discussed in this press release are forward looking and made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect numerous assumptions and involve a variety of risks and uncertainties, many of which are beyond the company's control that may cause actual results to differ materially from stated expectations. These risk factors include, among others, limited operating history and lack of statistically significant formal research studies, the risk that treatment protocols might not be effective, difficulty in developing, exploiting and protecting proprietary technologies, intense competition and substantial regulation in the healthcare industry; and additional risks factors as discussed in the reports filed by the company with the Securities and Exchange Commission, which are available on its website at http://www.sec.gov.

Source: Business Wire

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