Justice Department Withdraws Outdated Enforcement Policy Statements The FTC is in the process implementing major changes in antitrust enforcement, especially in healthcare. Withdrawal of the three listed documents will have immense implications for the field. For example, the ANTITRUST ENFORCEMENT POLICY STATEMENTS ISSUED FOR HEALTH CARE INDUSTRY contains “policy statements [that] provide antitrust safety zones which describe circumstances under which the Department of Justice and the Federal Trade Commission will not challenge:
—Hospital mergers;
—Hospital joint ventures involving high-technology or other expensive medical equipment;
—Physicians' provision of information to purchasers of health care services;
—Hospital participation in exchanges of price and cost information;
—Joint purchasing arrangements among health care providers;
—Physician network joint ventures.”
Replacement language has yet to be drafted but will obviously be less forgiving.
Also unclear is how these changes will affect extant relationships.
About health insurance/insurers
Judge hands providers another win by striking down surprise billing arbitration process “A federal judge struck down key parts of a regulation outlining a ban on surprise medical bills, siding with doctors that the rule tilts too favorably to insurers.
The ruling delivered late Monday in the U.S. District Court for the Eastern District of Texas centers on an arbitration process for settling disputes over out-of-network charges.”
Cigna focused on partnerships—not M&A—in care delivery strategy, CEO says “Cigna CEO David Cordani told investors Friday that the company isn't planning to begin snapping up large swaths of doctors as it continues to chart a growth strategy for its Evernorth subsidiary.
Instead, the insurer is focused on finding the right partners to continue building out its service offerings, such as its recent investment in VillageMD, Cordani said. There are segments, though, where Cigna is looking to buy, he added, namely home health, virtual care and behavioral health.”
CVS Nearing $10.5 Billion Deal for Primary-Care Provider Oak Street Health “CVS Health Corp. is close to an agreement to acquire Oak Street Health Inc. for about $10.5 billion including debt, a deal that would rapidly expand the big healthcare company’s footprint of primary-care doctors with a large network of senior-focused clinics, according to people with knowledge of the matter.”
Comment: Recall that Oak Street has never achieved profitability.
CENTENE CORPORATION REPORTS 2022 RESULTS Summary:
“2022 Full Year Diluted EPS of $2.07; Adjusted Diluted EPS of $5.78 --
2022 adjusted diluted EPS growth of 12%.
2022 total revenues of $144.5 billion, up 15%.
2022 health benefits ratio of 87.7%.
Continued progress on portfolio review, completing five divestitures in the past three months: Magellan Rx, Magellan Specialty Health, Ribera Salud, Centurion, and HealthSmart.
Executed on capital deployment with $1.4 billion of share repurchases in the fourth quarter, bringing full year repurchases to $3.0 billion, largely funded through divestiture proceeds.
Increased 2023 premium and service revenues guidance by $2.0 billion.”
Google’s fastest-growing business is insuring companies against their workers’ health Verily “more than doubled its revenue to become the biggest Alphabet subsidiary after Google proper… — its health insurance business, Granular, is the biggest contributor to that growth…
Granular doesn’t sell health insurance to employees. It sells ‘stop-loss’ insurance to employers who are worried that their own workers’ medical claims might hurt them.”
About hospitals and healthcare systems
Fourth Semi-Annual Hospital Price Transparency Report “Our latest review of hospital compliance, completed just over two years after the Hospital Price Transparency Rule’s implementation, analyzed the websites of 2,000 U.S. hospitals focusing on the nations’ largest health systems, and found only 24.5% of them (489) to be compliant with all the requirements of the rule. Though the majority of hospitals have posted files, the widescale noncompliance of 75.5% of hospitals is due to most hospitals’ files being incomplete, illegible, or not having prices clearly associated with both payer and plan.”
City of Hope to Rebrand Cancer Treatment Centers of America Locations to Reflect Transition to National System “City of Hope, one of the largest cancer research and treatment organizations in the United States, today announced that its subsidiary, Cancer Treatment Centers of America® (CTCA), will fully transition its clinical locations to City of Hope's brand. CTCA locations in different cities will now be called City of Hope Atlanta, City of Hope Chicago and City of Hope Phoenix. In addition to the replacement of CTCA branding at clinical facilities, all marketing, advertising, communications and activities supporting these locations will reflect City of Hope's name. A new advertising campaign will launch on Feb. 6 to communicate the name change in existing CTCA markets.”
The transition was completed today.
About pharma
Pharma loses a court battle in its bid to block states from importing drugs from Canada “In a setback to the pharmaceutical industry, a federal judge has tossed a lawsuit that sought to prevent state governments from importing medicines from Canada. The decision is likely to embolden more states to now consider the approach as they look to lower the cost of prescription drugs
In a 26-page opinion, U.S. District Court Judge Timothy Kelly ruled that drug companies failed to prove they would face a ‘concrete risk of harm’ from a federal rule that would allow states to import medicines. In his view, any harm is only speculative, because there is no guarantee the federal government will approve any state proposal. As a result, the industry did not have standing to file suit.”
Association Between Drug Characteristics and Manufacturer Spending on Direct-to-Consumer Advertising “In this exploratory cross-sectional study of 150 prescription drugs with the highest US sales in 2020, a higher proportion of promotional spending allocated to direct-to-consumer advertising was associated with drugs rated as having lower added clinical benefit than for those having higher added clinical benefit (absolute 14.3% increase in proportion) and with total drug sales (absolute 1.5% increase in proportion for every 10% increase in sales).”
Eisai’s New Alzheimer’s Drug Leqembi Hits the U.S. Market “Eisai did not divulge numbers on how many prescriptions were filled or how the patients paid. The drug costs $26,500 annually and doesn’t yet have insurance coverage through commercial payers. The company awaits a decision on whether Medicare will cover it.
Leqembi, an anti-amyloid antibody, got accelerated approval from the FDA as a treatment for Alzheimer’s on Jan. 6. The company must conduct a confirmatory study to gain a full approval.”
Top 10 most anticipated drug launches of 2023 FYI
Aledade, Mark Cuban's drug company and a handful of others are public benefit corporations. Could it be the Rx to improve healthcare? “PBCs are a type of for-profit corporate entity that has also adopted a public benefit purpose and is currently authorized by 35 states and the District of Columbia. A PBC must consider the nonfinancial interests of its shareholders and other stakeholders when making decisions. As a public benefit corporation, companies have to weigh their social/environmental objectives alongside maximizing value for shareholders…
PBCs also are required to provide a report to shareholders every two years that detail how well the company is achieving its overall public benefit objectives. In some states, the report must be assessed against a third-party standard and be made publicly available. Delaware PBCs are not required to report publicly or against a third-party standard.”
About healthcare IT
Beyond high hopes: A scoping review of the 2019–2021 scientific discourse on machine learning in medical imaging A really good summary of potential (and actual) benefits and problems with machine learning in medical imaging. You can key on the Figures for the takeaways.
About healthcare personnel
The 10 Largest Medical Groups in the US The list is FYI, but the takeaway is: “Three out of four physicians are now employed by a hospital, health system or corporate entity…
Among employed physicians, 52% are employed by hospitals or health systems, with another 22% employed by other corporate entities, including health insurers and private equity firms. Over the three year period studied, an additional 108,700 physicians became employees, which represents a 19% increase in employed doctors.”
About health technology
Chinese DNA giant’s U.S. affiliate looks to rival Illumina, touting $100 genome and high-power sequencers “Complete Genomics, a U.S. firm affiliated with Chinese sequencing giant BGI, on Tuesday announced plans to launch a new line of sequencers it says can decode DNA in larger amounts — and at lower costs — than any instrument on the market.
The company claims the sequencer, dubbed DNBSEQ-T20, can read up to 50,000 human genomes a year, 2.5 times the max output of a line of new high-end sequencers that Illumina, the market leader, recently launched. And the cost of reading each genome will be as low as $100, which the company’s executives boast would be the lowest-ever price point since the figure includes the cost of the materials and chemicals used in sequencing as well as amortization of the machine.”
Labcorp to pay $19 Million to settle allegations under the False Claims Act “Laboratory Corporation of America Holdings (Labcorp), one of the largest providers for clinical laboratory services, has agreed to pay $19 million to resolve allegations that it violated the False Claims Act by its submission of false claims to Medicare.
The settlement resolves allegations that Labcorp caused the submission of false claims to Medicare as a result of Labcorp’s provision of phlebotomy services for patients whose health care providers were ordering laboratory testing from Labcorp, Health Diagnostic Laboratory, Inc. (HDL), and/or Singulex, Inc. (Singulex) at a time when relators allege Labcorp knew HDL and/or Singulex were paying health care providers process and handling fees as an inducement to refer patients to their laboratories. HDL and Singulex previously settled their civil liability with the government for a combined $48.5 million.”
About healthcare finance
Healthcare Services Report PE [Private Equity] trends and investment strategies [Information is in the pdf. that can be accessed for free from this page.]
"The healthcare services PE landscape closed out 2022 with a declining, but still healthy, level of deal activity. Firms announced or closed an estimated 863 deals in the year, making 2022 easily the second-best year for PE healthcare services dealmaking, after 2021. However, quarterly trends show a steady decline throughout the year, especially in Q4, for which we estimate 158 deals, 26.4% off Q3’s figure…
The end-of-year decline in deal activity can be attributed principally to two factors. First, the pace of PE dealmaking has slowed due to macroeconomic uncertainty and rising capital costs…
Second, staffing cost inflation continues to plague healthcare services businesses. The lowest-skilled roles are most affected due to workers’ ability to maintain similar pay levels while transitioning into other industries.”