Thursday, July 24, 2014

Morning Consult Health: Sovaldi Sales Launch Gilead Into Big Leagues; GOP Emboldened After Halbig

 

By Jonathan Easley (@joneasley)

 

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Today’s Washington Brief:

  • Republicans are attacking the health law with renewed vigor after the Halbig ruling, writes Robert Pear for New York Times. Meanwhile, hospitals and insurers say the ruling could throw the marketplace into confusion, according to Anna Wilde Matthews and others at Wall Street Journal.

  • House Budget Committee chairman Paul Ryan will unveil his latest anti-poverty pitch on Thursday. While his past budges have included deep cuts to Medicaid, his new plan would allow states to receive block grant funding for safety-net programs, excluding Medicaid, according to Zachary A. Goldfarb at Washington Post. Read Rep. Ryan’s op-ed in USA Today HERE.

  • The New England Journal of Medicine has the latest study showing that the healthcare law has lowered the uninsured rate. The report, by Benjamin Sommers and others, found that more than 10 million people gained coverage under the law.

 

Today’s Business Brief:

  • Gilead doubled its 2014 revenue forecast by notching $3.5 billion in second quarter sales for Sovaldi, the infamous “$1,000 pill,” reports Caroline Chen for Bloomberg. The blockbuster drug launches Gilead into the big leagues of drugmakers, according to Jonathan D. Rockoff at Wall Street Journal.

  • Of course, that sales figure will only intensify the controversy surrounding the drug’s price. As some health plans balk at covering the medication, Simeon Bennett at Bloomberg BusinessWeek reports that doctors are now picking who they deem to be sick enough to warrant the drug.

  • Nearly 1 million people have signed up for Obamacare during the closed-enrollment period, reports Charles Ornstein for NPR.

Today's Chart Review:

 

Health IT Leads Healthcare M&A Activity

from MedCity News by Dan Verel


 

Mark Your Calendars (All Times Eastern):

 

Thursday: Senate Finance Committee hearing on Social Security @10am

Thursday: Quarterly Earnings - Alexion Pharmaceuticals, Boston Scientific, Bristol-Myers Squibb, Cerner Corp., Eli Lilly, IMS Health HoldingsProto Labs, Universal Health Realty

Friday: National Committee for Quality Assurance primary care briefing @9am

Friday: Quarterly Earnings – AbbVie, Aon, Covidien, LifePoint Hospitals, Magellan Health

 

NEWS ARTICLES

 

1-6: General

7-9: Payers

10: Providers

11-13: Pharma/Biotech/Device

14-15: Health IT

 

OPINIONS, EDITORIALS, PERSPECTIVES

 

16: USA Today
17: New York Times
18: Forbes
19: Politico
20: The Federalist
21-22: New Republic
23: Morning Consult

 

RESEARCH REPORTS, ISSUE BRIEFS, CASE STUDIES

 
24: New England Journal of Medicine
25: Federation for American Hospitals

 

 

NEWS ARTICLES

 

General 


1) Paul Ryan Unveils Anti-Poverty Plan

from Washington Post by Zachary A. Goldfarb

 

House Budget Committee Chairman Paul Ryan (R-Wis.) will shift this week from his years-long focus on cutting federal spending to an anti-poverty proposal that seeks to overhaul the safety net but also leaves in place existing levels of funding. The proposal, which will be announced Thursday amid a battery of new ideas from Ryan, is part of an effort to reorient the Republican Party away from battles of recent years and toward addressing the economic anxieties of the most disadvantaged Americans.


2) Bolstered By Ruling, Republicans Attack Health Law

from New York Times by Robert Pear

 

Republicans in Congress resumed their campaign against the Affordable Care Act on Wednesday with new zeal, fired up by a ruling of a federal appeals court panel that said premium subsidies paid to millions of Americans in 36 states were illegal. Republicans pointed to the ruling as evidence of problems in the law that could not easily be solved.


3) Court Ruling On Healthcare Subsidies Risks Loss of Coverage

from New York Times by Abby Goodnough

 

The conflicting court rulings left much unresolved — both cases will be appealed further, and additional cases challenging the subsidies in federal exchange states are still making their way through trial courts in Indiana and Oklahoma. But the ruling in Halbig v. Burwell, in which a panel of the United States Court of Appeals for the District of Columbia found that subsidies could be awarded only in states that set up their own insurance exchanges, raised the possibility that many of the 4.5 million people who were found eligible for subsidized insurance through the federal exchange would drop their new coverage.

4) Two Americas On Healthcare, and Danger of Further Division Grows

from New York Times by Margot Sanger-Katz

 

The Affordable Care Act was designed to help standardize important parts of that system, by imposing some common rules across the entire country and by providing federal financing to help residents in all states afford insurance coverage. But a series of court rulings on the law could make the differences among the states bigger than ever. The law was designed to pump federal dollars into poorer states, where lots of residents were uninsured. Many tended to be Republican-leaning. But the court rulings, if upheld, could leave only the richer, Democratic states with the federal dollars and broad insurance coverage. States that opted out of optional portions of the law could see little improvement in coverage and even economic damage.


5) Burwell Appoints New Counselor From Wal-mart

from The Hill by Elise Viebeck

 

Health and Human Services (HHS) Secretary Sylvia Burwell continued her management shake-up Wednesday by naming a former vice president at Wal-mart as senior adviser. The move to bring Leslie Dach to HHS reveals Burwell's interest in heading off problems during ObamaCare's second enrollment period, due to start in November. The new HHS secretary also wants to add professionals with significant private sector experience to her inner circle. 


6) U.S. Stock Index Futures Gain After S&P 500 Record

from Bloomberg by Namitha Jagadeesh

 

U.S. stock-index futures advanced, signaling the Standard & Poor’s 500 Index will extend a record, as companies from Facebook to Ford posted financial results that beat analysts’ estimates. Facebook jumped 9.4 percent in premarket trading after saying second-quarter sales surged 61 percent. Ford gained 1 percent. Qualcomm declined 4.7 percent after forecasting quarterly profit that may trail estimates. General Motors Co. lost 2 percent after reporting quarterly profit that missed analysts’ projections. S&P 500 futures expiring in September added 0.2 percent to 1,984.7 at 8:09 a.m. in New York. Dow Jones Industrial Average contracts gained 25 points, or 0.2 percent, to 17,050.

 

Payers


7)
Groups Sue Tennessee Over Medicaid Backlog

from The Tennessean by Tom Wilemon

 

Babies who went without medical coverage, a mother of three with high blood pressure and a woman with kidney failure are among the plaintiffs in a federal lawsuit filed today contending that TennCare illegally denied them Medicaid benefits. Three nonprofit legal firms — the Southern Poverty Law Center, the Tennessee Justice Center and the National Health Law Program — are representing the plaintiffs.


8) Nearly 1 Million Have Signed-Up For Obamacare After Open Enrollment

from NPR by Charles Ornstein

 

For months, journalists and politicians fixated on the number of people signing up for health insurance through the federal exchange created as part of the Affordable Care Act. It turned out that more than 5 million people signed up using HealthCare.gov by April 19. But perhaps more surprising is that, according to federal data released Wednesday to ProPublica, there have been nearly 1 million transactions on the exchange since then. People are allowed to sign up and switch plans after certain life events, such as job changes, moves, the birth of a baby, marriages and divorces. The volume of these transactions was a jolt even for those who have watched the rollout of the ACA most closely.


9) Oregon Strained by Medicaid Enrollees

from Associated Press

 

Low-income Oregon residents were supposed to be big winners after the state expanded Medicaid under the federal health care overhaul and created a new system to improve the care they received. However, an Associated Press review shows that an unexpected rush of enrollees has strained the capacity of the revamped network that was endorsed as a potential national model, locking out some patients, forcing others to wait months for medical appointments and prompting a spike in emergency room visits, which state officials had been actively seeking to avoid.

 

Providers


10) Hospitals, Insurers Say Court Rulings Will Cause Confusion In Marketplaces

from Wall Street Journal by Anna Wilde Matthews, et al.

 

Health-industry officials said Tuesday's dueling court rulings over federal health-law subsidies set the stage for another bout of confusion as consumers return to marketplaces this fall to shop for next year's coverage.

"People are going to be coming in with more questions about these court cases," said Jason Stevenson, a spokesman for the Utah Health Policy Project, a nonprofit organization that has navigators that aid...

 

Pharma/Biotech/Device


11) Gilead Doubles 2014 Revenue Forecast On Sovaldi Sales

from Bloomberg by Caroline Chen

 

Gilead Sciences maker of the hepatitis C pill Sovaldi, doubled its sales forecast for the year on better-than-estimated revenue from the blockbuster pill. Gilead forecast 2014 product sales of $21 billion to $23 billion, doubling its February estimate, reiterated on April 22, of $11.3 billion to $11.5 billion that didn’t include the hepatitis C drug.Sovaldi, whose $1,000-a-pill price tag has been scrutinized by insurers and lawmakers, reported sales of $3.48 billion in the second quarter, beating the $3 billion average of 12 analysts’ estimates compiled by Bloomberg.


12)
Hepatitis C Drug Rockets Gilead Into Big Leagues

from Wall Street Journal by Jonathan D. Rockoff

 

For decades, a liver disease that would slowly kill the infected person didn't even have a name, let alone an effective medicine. Now, a new pill promising to cure most cases of the disease, eventually called hepatitis C, is believed to be the biggest new drug launch ever, catapulting maker Gilead Sciences Inc. into the ranks of the top-selling pharmaceutical companies. The pill, Sovaldi, notched $3.5 billion in...


13)
Doctors Picking Who Is Sick Enough To Get Expensive Sovaldi

from Bloomberg BusinessWeek by Simeon Bennett, et al.

 

Not since AIDS drug cocktails were introduced almost two decades ago has a medical breakthrough set up such a rush for a life-saving but expensive therapy. Constrained by limited budgets, health insurers and government programs are forced to make hard choices about which patients will get the cure. Many are opting to treat only the sickest.

 

Health IT


14) Health IT Leads Healthcare M&A Activity

from MedCity News by Dan Verel

 

Mergers and acquisitions across healthcare, pharma and health IT are on the rise, having increased by 18 percent since the second half of 2013, with health IT outpacing all other segments, according to a report from Berkery Noyes. The aggregate value of all healthcare M&A activity jumped 46 percent to $5.45 billion from $3.73 billion. Health IT M&A deal volume was up 17 percent, going from 65 transactions to 76, according to the report – the largest increase on a half year basis throughout the past two-and-a-half years. Notable Health IT deals during first half 2014 included Summit Partners’ acquisition of Ability Network for $550 million, Xerox’s acquisition of ISG Holdings for $225 million, and Emdeon’s acquisition of Capario for $115 million, the report said.


15) CMS Warns Against Over-Reliance On Decision Alerts For Meaningful Use

from HealthData Management by Greg Slabodkin

 

The Centers for Medicare and Medicaid Services is warning against relying too heavily on clinical decision support (CDS) “pop-up” alerts when meeting meaningful use Stage 2 objectives. With the enormous amounts of patient data being generated from medical devices and electronic health records, CDS is seen as a linchpin for enabling the effective use of all of this information. As medical data and individual patient information become more readily available electronically, CDS is meant to improve quality of care and enhance outcomes by avoiding errors and adverse events, improving efficiencies, reducing costs, while enhancing provider and patient satisfaction.


From Hope to Cures:

 

Hepatitis C attacks the liver of more than three million Americans, and is directly linked to 15,000 deaths each year. But America’s biopharmaceutical companies are fighting back – with new and forthcoming breakthrough treatments curing more than 90% of patients
 

OPINIONS, EDITORIALS, PERSPECTIVES

 
16) An Opportunity To Cut Poverty

from USA Today by Rep. Paul Ryan

 

I don't have all the answers. Nobody does. But I'd like to get the conversation going by offering an idea to repair the safety net. I'd start a pilot program, which I'd call the Opportunity Grant. It would consolidate up to 11 federal programs into one stream of funding to participating states. The idea would be to let states try different ways of providing aid and then to test the results — in short, more flexibility in exchange for more accountability.


17) A Dearth In Innovation For Key Drugs

from New York Times by Eduardo Porter

 

There is clearly something wrong with pharmaceutical innovation. Antibiotic-resistant infections sicken more than two million Americans every year and kill at least 23,000. The World Health Organization has warned that a “post-antibiotic era” may be upon us, when “common infections and minor injuries can kill.” Even the world’s tycoons consider the proliferation of antibiotic-resistant bacteria one of the crucial global risks of our times, according to a survey by the World Economic Forum. Yet the enthusiasm of the pharmaceutical industry for developing drugs to combat such a potential disaster might be best characterized as a big collective “meh.”


18) Halbig Ruling Only a Speedbump for Obamacare

from Forbes by Avik Roy

 

If you visited certain corners of the media yesterday—left and right—you may have read that in a case called Halbig v. Burwell, a federal court in D.C. dealt a “lethal blow” to Obamacare, by limiting the flow of the health law’s insurance subsidies. The D.C. court made the right call, based on a strict reading of the law. But the probability that this ruling leads to the collapse of Obamacare is somewhere between zero and zero. That is to say, zero.

19) What the DC Circuit Got Wrong About Obamacare
from Politico by Abbe R. Gluck

It is true, as the plaintiffs argued, that a single provision of the statute provides that subsidies shall be available to exchanges established by states, and that that provision does not also mention the federal government. But it is also emphatically true that the rest of the statutory text makes quite clear that the subsidies were also intended on federal exchanges...In fact, it was Justice Scalia himself, together with Justices Anthony Kennedy, Clarence Thomas, and Samuel Alito, who interpreted the health reform statute precisely this way in the 2012 health reform case—holistically, and assuming the statutory text makes subsidies available on state and federal exchanges alike.

 
20) Halbig Didn’t Gut Obamacare Over Drafting Error

from The Federalist by Sean Davis

 

…The deliberate creation of a separate section to authorize a separate federal entity is not a drafting error. The repeated and deliberate reference to one section but not another is not a drafting error. The refusal to grant equal authority to two programs authorized by two separate sections is not a drafting error. The decision to specifically reference section X but not section Y in a portion of a law that grants spending or tax authority is not a drafting error.The clear text of the law repeatedly demonstrates that plans purchased via federal exchanges were never meant to be treated the same as plans purchased by state-based exchanges. Despite its assertions, the IRS was never granted the statutory authority to hand out tax credits related to plans purchased via a federal health exchange.


21) Halbig Ruling Could Blow Up On Republicans

from New Republic by Brian Beutler

 

There's no use sugarcoating it: An adverse Supreme Court ruling would throw the ACA into chaos in three dozen states, including huge states like Florida and Texas. The vast majority of beneficiaries in those states would be suddenly unable to afford their premiums (and might even be required to reimburse the government for unlawful subsidies they've already spent). Millions of people would drop out of the insurance marketplaces. Premiums would skyrocket for the very sick people who need coverage the most.

But that's where the conservatives' "victory" would turn into a big political liability for red- and purple-state Republicans.


22) What Happens If Obamacare Lawsuits Previal?

from New Republic by Jonathan Cohn

 

Tuesday’s news was a ruling by a three-judge panel of the D.C. Circuit Court of Appeals, in favor of lawsuit challenging Obamacare’s structure for providing insurance subsidies. It’s a bona fide big deal—those subsidies are worth thousands of dollars a year to some people, making them arguably more essential than the individual mandate. But this ruling is not the existential threat that those previous episodes were.


23) Paying For Value, Not Volume

from Morning Consult by Robert Popovian

 

It is time that US takes a leadership role in innovating how to pay for and deliver healthcare by paying for value rather than volume.  Our current fee-for-service payment model encourages quantity not quality. Payments for outpatient services, hospital admissions, pharmaceuticals and provision of other healthcare services are based on individual budgets which only take into account cost rather than value and quality. 

 

From Hope to Cures:

 

Without new treatments and cures for Hepatitis C, annual U.S. medical costs associated with the disease are projected to nearly triple over the next 20 years – from $30 billion to $85 billion. But now new and forthcoming treatments are curing more than 90% of patients and driving down future medical costs like liver transplants – which often cost more than $500,000. 

 

RESEARCH REPORTS, ISSUE BRIEFS, CASE STUDIES


24) Health Reform and Changes In Health Insurance Coverage In 2014

from New England Journal of Medicine by Benjamin Sommers, et al.

 

As compared with the baseline trend, the uninsured rate declined by 5.2 percentage points by the second quarter of 2014, a 26% relative decline from the 2012–2013 period. Combined with 2014 Census estimates of 198 million adults 18 to 64 years of age, this corresponds to 10.3 million adults gaining coverage, although depending on the model and confidence intervals, our sensitivity analyses imply a wide range from 7.3 to 17.2 million adults.


25) Healthcare Spending Slowdown: The Consumer Paradox

from Federation for American Hospitals by Al Dobson, et al.

 

… the consumer experience in health care has run against the national spending slowdown trend, in what appears to be a growing dichotomy.  When it comes to personal health care spending, the perception matches the reality for consumers, who are spending more for care.

 

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