Healthy Musers,

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5 Big Healthcare Stories

Week of April Fools, 2019

1 New York Suburb Bans Unvaccinated Children from the Public

That seems drastic.

This week, Rockland County, a suburb of New York, declared a state of emergency based on the rampant measles outbreak facing their county’s population. The first step? Banning all unvaccinated children and teenagers from public places. This type of action is pretty unprecedented, but so is getting the measles. Although the measles vaccine is about 97% effective, only 72% of the Rockland adolescent population is vaccinated against the highly contagious disease. The ban comes at a time when measles cases through the first 3 months of the year have already outpaced last year’s total reported cases altogether.

2 PBMs going to testify before Congress Wednesday 4/3

This week’s hottest TV.

Tune in to the Senate finance committee hearing this Wednesday to see some absolutely heart-pounding, riveting, must-see TV. Last month in our March 4th edition, we covered lawmakers inviting drugmakers to Capitol Hill to ask why drug costs were so high. Those companies placed 100% of the blame onto pharmacy benefit managers (PBMs), who are basically the middlemen between the makers and the patients. Now, the Senate wants to ask PBMs some questions about their drug rebate practices and whether they’re ACTUALLY saving patients money on drugs. Companies like CVS, UnitedHealth, and Cigna are preparing to get grilled come Wednesday, especially as Congress prepares potential legislation around abolishing drug rebate practices for good (paywall).

3 Trump goes for the jugular on Obamacare

Fuel to the political fire.

As if declaring the Affordable Care Act unconstitutional weren’t enough, the Trump administration has now declared its intent to completely repeal and replace the ACA.

Remind me – what’s going on right now?

In 2018, the tax bill repealed the ACA’s individual mandate, meaning that people who opted not to have health insurance would not longer be penalized for doing so. After this happened, several states took the ACA to court in Texas late in December of last year. In that hearing, a judge ruled against the ACA, declaring the entire bill unconsitutional now that the individual mandate wasn’t a thing. Of course, the ruling was appealed and is still tied up in court.

Supreme Court Inbound.

With heated debates surrounding healthcare on both sides of the aisle, it seems as if a Supreme Court showdown is almost inevitable. Trump thinks he’s in good standing considering the currently conservative lean of the bench. But that raises the question – if the lawsuit against the ACA is successful, what comes next for healthcare? Because it doesn’t look like there’s any proposed system to take the ACA’s place. The debate around healthcare will only intensify as the administration turns up the heat and 2020 approaches.

4 Centene buys WellCare in $17 billion deal

A Medicaid Giant.

Centene secured plans this week to purchase its main competitor, WellCare, in a $17.3 billion deal (a 32% premium to their share price). The merger comes at a time when mega-sized healthcare firms are joining forces pretty frequently (think CVS / Aetna, Cigna / Express Scripts, and a whole host of others). What’s different about these firms, though, is that they’ve made their killing mainly by managing Medicaid programs for states. Their businesses really took off under the Affordable Care Act, which allowed for expansion of Medicaid, and thus, the expansion of Centene’s and WellCare’s businesses.

Not so fast.

Because this transaction is a huge ‘horizontal’ merger in a highly regulated area, this deal is highly likely to raise antitrust concerns. Also, as we just covered above, any existential threat to the ACA would probably REALLY hamstring any further growth available to the new company. If the deal does go through, look for these companies to leverage their size and aggressively target the Medicare Advantage market. Like we talked about in our February 11th 3rd story, Medicare Advantage is growing like a weed.

5 UPS Enters the Home Care Market

Robots and Drones.

As a part of UPS’ push into autonomous technology, the parcel giant is partnering with the drone company Matternet to deliver lab samples in North Carolina. The pilot program is part of a larger push from UPS into diversifying its revenue streams and changing home delivery as a whole. The approach is pretty innovative. If successful, the program could help seniors receive better and quicker care, all while pushing the lab industry toward an on-demand future (sound familiar, Theranos?).

Quick Hits

Keep on the look out for Johnson & Johnson’s new drug ad, which will disclose the cost of a drug for the first time on TV. Following last week’s story on the FDA’s secret medical device database, watchdog groups are now calling on the FDA to make all device data public. The FDA’s also looking into the safety of breast implants. And Thermo Fisher just bought Brammer Bio, a gene therapy specialist, for $1.7 billion.

Purdue Pharma reached its first settlement in the expansive opioid case coughing up $270 million in Oklahoma. Pediatricians now want soda taxes. Could artificial intelligence actually be bad for healthcare? And apparently Medicare made $23 billion in payment errors in 2017.

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