Some people have some…er…strong thoughts about the cringey new Peloton commercial.
ICYMI: read last week’s edition here.
Top Weekly Healthcare Stories – All About Healthcare Spending
M&A | Hospitals
KKR’s Take-Private Offer for Quorum
Quorum Health, one of the five publicly traded hospital companies, received an offer letter this week from KKR, a private equity firm known for take-private buyouts.
The Terms.
KKR offered Quorum a $1.00 per share offer, which might even be generous considering the operator is down 79.0% on the year. Quorum management said they’d take the letter into consideration along with everything else, including their ginormous debt load.
The Bigger Picture: private equity is all over healthcare. Recent buyouts include Athenahealth, Kindred, Envision, and others. Even Walgreens had a take-private offer just a few weeks ago. All of these deals were priced in the billions of dollars.
OTHER M&A: Merck, a large biotech firm, is acquiring ArQule, a drug developer specializing in cancer treatments, for $2.7 billion. Biotech M&A is red hot hot HOT.
Big Pharma | Drug Development
One Wild 24 Hours for Brain Drugs
Big Moves for Biogen, Sage, and Acadia.
Over $7.6 billion in combined company value shifted between these three pharma giants on Thursday.
Sage Therapeutics’ shares plunged 60%, or $4.6 billion after its oral depression drug SAGE-217 failed a phase 3 study. That selloff took out all of the stock’s year-to-date gains – and then some. Don’t trade biotech if you have a weak stomach, right?
- Then, investors rewarded Acadia with $1 billion in market cap after the pharmaceutical company presented positive data on its Alzheimer’s drug, Pimavanserin.
Mixed Reviews on Biogen’s Alzheimer’s Drug, Aducanumab.
Finally, Biogen’s once-defunct Alzheimer’s drug is staging a comeback.
Remember back in March, the drug failed its Phase 3 study, causing Biogen’s stock to freefall 30%.
- More recently, Biogen took another look at the data and found a potential new use case. Cue up another drug trial and a stock rebound.
- This week, the results from that trial were announced and were met with mixed reviews and skeptics. Next up: an FDA review.
Read more on Biogen’s drug revival attempt:
- From Bloomberg: Biogen to Revive Alzheimer’s Drug Studies It Once Abandoned
- From Statnews: Detailed data on Biogen’s resurrected Alzheimer’s drug raise more questions than answers
Macro | Healthcare Spending
Healthcare Spending Increased 4.6% in 2018
That’s $3.6 trillion, or 17.7% of GDP.
CMS released its yearly National Health Expenditures report, covering 2018’s spending on healthcare services.
Results are in: Healthcare decreased 0.2% as a percentage of overall GDP, but still makes up 17.7% of our economy. That’s probably gonna get bigger too, as the U.S. population ages.
CMS estimates that healthcare spending will grow at around 5.5% a year for the next 10 years as the lumpy Baby Boomer population gets on Medicare.
Policy Corner, week of December 9th
Hospitals | Price Transparency
Hospitals Want to Block Price-Transparency Rule
As we all expected, hospital groups officially sued the Trump administration over the contentious price transparency rule, under which they would be forced to disclose how much insurance companies pay them for healthcare services.
The arguments.
The hospital defense: Revealing negotiated rates made between the hospital and the insurer will confuse patients, take a large financial toll on hospital IT departments retrieving the data, and hurt competition by potentially causing collusion – or even higher prices when certain hospitals see they’re getting underpaid.
There’s even a free speech argument: is the forced disclosure of highly confidential prices in a business operation a violation of that company’s free speech?
Re-calibrate yourself: Remember that HHS tried to pass a similar law with drug prices earlier this year, which would have required drugmakers to disclose list prices of drugs on TV commercials for any medication over $35. A judge struck down that rule, saying that HHS didn’t have the proper authority to impose that kind of regulation – so who knows if HHS has the authority over hospitals and this ruling, either.
From Seema Verma’s Op-Ed in the Chicago Tribune, she thinks the hospitals’ arguments are pretty weak and advocates for transparency.
What do you think?
Regulatory | Drug Policy
U.S. Considers Easing Drug Protections to Break Logjam Over Trade Pact
WSJ reported (paywall) this week that the Trump administration is “considering scaling back intellectual-property protections for big drug-makers to help win Democratic support for a new trade pact with Mexico and Canada.”
Why this matters.
A big way that drug-makers maintain revenue growth and margins is through enjoying exclusive rights to the drugs they develop for a number of years. That exclusivity period might shrink if this proposal is included in the new NAFTA trade pact, which would affect profitability.
Other drug stuff to know:
- FDA Head Approved: The Senate panel approved Stephen Hahn, Trump’s FDA head nominee. Next up: a full Senate floor vote.
- Pelosi Update: The White House thinks Nancy Pelosi’s drug pricing proposal (read about it here) would cost $1 trillion annually and stifle the development of up to 100 drugs per year. Breaking: the plan isn’t going anywhere anytime soon.
Policy | Medicaid
Medicaid Work Requirement Delayed Everywhere
State lawmakers are either delaying or cancelling Medicaid work requirements everywhere – Indiana, Virginia, New Hampshire, Michigan, Montana, and Arizona – just to name a few states. As it turns out, it’s far more costly to track whether or not people are in compliance than it is to just give them Medicaid benefits.
- You should also know: legal challenges are mounting against Medicaid work requirements, which is also partly why several states suspended their programs for the time being.
Policy | 2020 Election
Latest Healthcare Election News
- From the Warren Camp: How a fight over healthcare entangled Elizabeth Warren and reshaped the Democratic race
- The Voice of the People: Do voters really want all of the focus to be on healthcare in 2020?
- Finders, Keepers: Joe Biden thinks Pete Buttigieg, who has surged in popularity in recent months, stole his healthcare plan.
- Say Bye Bye, Kamala: The California Democrat dropped out of the running this week. That means one less healthcare policymaker to track for me.
- Racist Algorithms: Cory Booker wants the FTC to look into biased healthcare algorithms.
- Rural Health: Is it becoming a major 2020 campaign issue?
Quick Hits
Biz Hits
- UnitedHealth’s Profit Center: Optum, UnitedHealthcare’s physician and ambulatory services wing, will provide over half of its profits in 2020.
- PDGM Latest: Where PDGM’s Therapy Changes Will Hit Hardest
- Centene-Wellcare Tie-Up: Centene sells Illinois plans to CVS in the next step for its purchase of WellCare. In fact, all states have now approved the deal.
State Hits
- South Dakota: The Physician shortage is becoming mission-critical.
- California: Anthem Blue Cross gets in trouble more often than other insurers
Other Hits
- Opioid Consequences: The Class of 2000 ‘Could Have Been Anything’ until Opioids Hit
- Next-Gen: How the Next Generation of Mobile Computing Is Already Changing the Face of Health Care
- Healthcare Leaders: Forbes released its 30-under-30 this week. Here are all the healthcare leaders included.
- Also from Forbes: Predictions for healthcare disruptions and innovations in 2020
- Living Dead: Doctors ‘reanimated’ a heart for a first-of-its-kind transplant in the U.S. this week
- Dementia: Step aside, biomarkers. Look to the bank account for early signs of dementia
- China’s CRISPR babies: Read exclusive excerpts from the unseen original research
- Artificial Intelligence: Unpacking the Black Box in Artificial Intelligence for Medicine
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