Biohaven (BHVN), which makes treatments for migraines, is exploring potential options, including a possible sale of the company after drawing interest from suitors, Bloomberg reports, citing people familiar with the matter. The company, which is working with a financial advisor, is in the preliminary stages of weighing a sale or partnership and the talks may not end up in a deal, the report says. Biohaven shares jump 21.5% after the news, while shares of Alder Biopharmaceuticals (ALDR), which also is in the migraine treatment space, were up 4.7%.
Friday, April 12, 2019
CVS-Aetna judge to hear testimony from AMA, other critics next month
- D.C. District Court Judge Richard Leon said last week he will allow witnesses to testify as part of his review of the CVS acquisition of Aetna and the settlement the two reached with the U.S. Department of Justice. Witnesses will likely include the American Medical Association, which has blasted the deal.
- Leon has yet to sign off on the nearly $70 billion deal and has been critical of the agreement the two struck with the DOJ, previously saying it addresses only “about one-tenth of 1%” of the megamerger.
- The hearing is scheduled for May, according to The Wall Street Journal.
At issue is the deal DOJ struck with CVS and Aetna to allow the union to proceed. The two agreed to shed all of Aetna’s Medicare Part D business to WellCare (itself recently acquired by rival Centene), a critical component to clearing antitrust hurdles.
However, some like AMA have voiced concern about the settlement agreement. Leon, who is tasked with reviewing the deal under the Tunney Act, has shared his skepticism about whether it does enough to protect consumers from anticompetitive effects.
CVS told Healthcare Dive the company had no comment in response to Friday’s courtroom news.
AMA told Healthcare Dive: “Given the detrimental consequences of the merger, the AMA appreciates the detailed consideration that U.S. District Judge Richard Leon is giving to the proposed settlement.”
Despite the drawn out review, CVS and Aetna have already closed the deal and CVS CEO Larry Merlo sought to assure investors in January, calling the company already “one.” In February, CVS reported its first quarterly results including operations of Aetna.
During last week’s hearing, DOJ Attorney Jay Owen argued against a future hearing that would include expert witnesses of AMA’s choosing. Owen said it would add inconvenience and cost to the process “with little prospect of providing additional information to aid the Court’s public interest determination.”
Owen attempted to remind the judge of the limited scope before him under the Tunney Act: whether the remedy adequately addresses the original complaint brought by the DOJ. In this case, whether Aetna’s divestiture of its Medicare Part D business to WellCare resolves anticompetitive effects.
The fear is that the witnesses AMA calls will attempt to talk about issues outside of the judge’s scope, in particular those of vertical integration.
Leon countered: “It should be pretty simple for you, then, because then you can call three people or two … who would simply indicate that, ‘The testimony that you’ve just heard, Your Honor, is for whatever — the following reasons irrelevant and is not worthy of your consideration.'”
GM exec calls for more pressure on consolidating healthcare companies
The head of healthcare for one of the biggest U.S. employers has a message for the rapidly consolidating healthcare industry: We’re watching you.
General Motor’s U.S. healthcare leader Sheila Savageau on Thursday took aim at the rampant merging industry, particularly as insurers and pharmacy benefits managers become one.
“The key takeaway for me here is, we’ve got to keep the pressure on” to make sure employers enjoy the benefits of consolidation, Savageau said.
The comments came as business leaders representing hospitals, physicians and insurers debated the merits of consolidation and whether the latest combinations can curb costs for patients and employers. The panel was part of the National Business Group on Health’s conference.
GM, with hundreds of thousands of employees, is among big employers skipping insurers and contracting directly with providers in recent years.
She said employers have always entrusted healthcare industry partners to do the right thing, but she has noticed that over time health costs haven’t decreased and outcomes haven’t improved.
Fed up with business as usual, she and GM recently decided to contract directly with the Henry Ford Health System in Detroit. She noted that in Detroit she had six health systems to choose from, which is different than other, more heavily consolidated markets — where prices also tend to be higher.
“We’re holding providers accountable for care,” Savageau said.
Now, the auto giant is taking a similar approach with payers.
“I do think it’s time that we start holding PBMs accountable,” she said.
Savageau pressed Cigna Chief Clinical Officer Steve Miller on whether the payer’s tie-up with Express Scripts, one of the nation’s largest PBMs, will mean lower prices for business leaders and their employees.
“If I look at my contracts with Henry Ford, for example, I’m holding them accountable to a zero trend [in medical cost increases]. How are you going to do that within your consolidation?” she asked.
Miller said Cigna is up for the challenge. The company is promising to contain healthcare costs increases within the consumer price index by 2021, a bold promise others have yet to commit to, he said.
“Healthcare should not cost you any more than the increase in inflation,” he said. “It’s going to be really, really hard, but if our platform can’t get there than no one can get there.”
Earlier in the week, Miller was in another hot seat before the Senate Finance Committee along with other leaders of the nation’s largest PBMs. They were called to testify as the committee seeks to pinpoint the reasons behind growing drug prices in America.
There was plenty of finger pointing to go around among health industry actors.
From the provider side, the American Hospital Association said members want to try new models of reimbursement, but they don’t always have a willing insurance partner, Melinda Reid Hatton, general counsel for the group, said.
An American Medical Association official noted the models have not improved over the years and still need more of a focus on value over volume.
They have too many quality metrics, are too varied and have misaligned incentives between multiple payers, Carol Vargo, an executive with AMA said.
CMS innovation head Adam Boehler earlier this week called to AHA members to help his agency design payments models for post-acute care. He also said then that his agency will unveil a new payment model for primary care physicians in the coming weeks.
With real-world data, FDA aims to predict randomized trial results before they’re in
The FDA is taking new steps to test the capabilities of real-world evidence, by attempting to predict the results of randomized, controlled trials before they are completed.
It’s an awaited expansion of the agency’s demonstration project, currently being conducted with the data firm Aetion and Brigham and Women’s Hospital.
The RCT DUPLICATE program originally looked to replicate 30 previously completed clinical trials using real-world data. Now, it aims to prognosticate the outcomes of seven ongoing postmarket studies—a first for the field, according to Aetion.
“This project will play a major role in determining the future of how drugs are developed and approved,” Aetion CEO Carolyn Magill said in a statement. “Data collected from the front lines of clinical care can often provide a more complete picture on how treatments affect patients not represented in clinical trials, but the regulatory process must ensure transparency.”
The project’s ultimate goal, of course, is to assist the FDA’s continuing development of standards for using real-world evidence in regulatory decisions—namely, it will help identify when and where healthcare databases can provide proper estimates of safety and efficacy for supplemental new drug applications.
“Predicting the results of clinical trials before they’re completed is important for showing that in certain circumstances real-world evidence could potentially substitute for a trial,” said project lead Jessica Franklin, Ph.D., assistant professor of medicine at Harvard Medical School and a biostatistician at Brigham and Women’s Hospital. “This additional work will be vital as we develop a process model for the implementation of regulatory-grade RWE studies.”
Researchers will register the seven additional phase 4 studies on Clinicaltrials.gov, and give the FDA direct access to all study components, processes and results, according to Aetion, which is training FDA staff on its platform.
In addition—through a grant funded by the NIH’s National Heart, Lung, and Blood Institute—the program is conducting real-world data analyses on more than 25 cardiovascular studies, including ongoing phase 4 trials and published phase 3 and 4 trials.
The RCT DUPLICATE project—mandated by the 21st Century Cures Act and funded by the FDA’s Center for Drug Evaluation and Research—expects to see interim results by mid-2019 and full results by the end of 2020.
Arrowhead Has Phase 1/2 Data on JNJ-3989 (ARO-HBV) at Intl Liver Congress
Arrowhead Pharmaceuticals, Inc. (NASDAQ: ARWR) today announced the presentation of clinical data from an ongoing Phase 1/2 study (AROHBV1001) of JNJ-3989 (formerly ARO-HBV), a third-generation subcutaneously administered RNA interference (RNAi) therapeutic candidate being developed as a potential treatment for patients with chronic hepatitis B virus (HBV) infection, at The International Liver Congress™ 2019 (ILC), the annual meeting of the European Association for the Study of the Liver (EASL).
Arrowhead entered into a license agreement in October 2018 with Janssen Pharmaceuticals, Inc., part of the Janssen Pharmaceutical Companies of Johnson & Johnson, to develop and commercialize ARO-HBV.
Key results from this interim analysis include the following:
- JNJ-3989 rapidly reduced hepatitis B surface antigen (HBsAg) in patients that had 24 weeks or more of HBsAg assay results (n=40) to thresholds possibly associated with improved chances of HBsAg seroclearance1 in many patients, after only 3 doses
- 100% of patients (40 of 40) achieved ≥1.0 Log10 IU/mL HBsAg reduction
- 88% of patients (35 of 40) achieved HBsAg <100 IU/mL
- 43% of patients (17 of 40) achieved HBsAg <10 IU/mL
- 13% of patients (5 of 40) achieved HBsAg <1 IU/mL
- JNJ-3989 reduced all measurable viral products, including HBsAg in hepatitis B e-antigen (HBeAg) positive or HBeAg negative patients
- JNJ-3989 administered subcutaneously was well tolerated at doses up to 400 mg in all chronic hepatitis B (CHB) patients in cohorts 2b-11 (n=56)
- 168 total doses administered to 56 CHB patients (cohorts 2b through 11)
- No drug related serious adverse events (SAE) reported
- Unrelated SAE of menorrhagia
- Unrelated SAE of anxiety/depression
- All patients received all 3 scheduled doses; No dropouts
- No dose related pattern of adverse changes in laboratory values (e.g. ALT, AST, total bilirubin, creatinine)
- 17 total AEs at injection site (10% of injections) reported (e.g. erythema, tenderness, bruising), all were mild
Rite Aid To Sell CBD Products Amid CEO Search And Pharmacy Pressure
Rite Aid will begin selling CBD products in two states as the retail chain searches for a new chief executive officer and grapples with industry wide pharmacy reimbursement pressures.
Rite Aid, like larger rivals Walgreens Boots Alliance and CVS Health, is seeing smaller profits from the sale of generic drugs. Those pressures impacted fiscal fourth quarter earnings with Rite Aid Thursday reporting a $255.6 million loss from continuing operations in the period ended March 2. Revenues, meanwhile, were largely flat at $5.38 billion compared to $5.39 billion in the year-ago quarter.
Such reimbursement pressure and competitive threats like online retailer Amazon’s push into pharmacy are forcing retailers to look at new ways to reinvent their brick-and-mortar drugstores, selling new products and adding more healthcare services. And Rite Aid is no different as the company converts more of its stores to a “wellness” format and looks at new ways to draw customers.
Rite Aid also Thursday disclosed plans to start selling CBD creams, lotions and lip balms as part of a pilot program in Oregon and Washington where it has about 200 stores. CBD, or cannabidiol, is a compound found in cannabis.
Rite Aid has 2,469 stores in 19 states, but most are concentrated in 7 states including California on the West Coast and Pennsylvania on the East Coast.
Rite Aid continues to remodel stores and have now converted 1,765 of the company’s stores to the wellness format and plan to remodel 70 more in fiscal 2020, executives told analysts Thursday morning on a 60-minute call to discuss fiscal fourth quarter earnings.
Rite Aid’s share price has plummeted to less than 60 cents per share following two failed mergers that have contributed to the demise of CEO John Standley, who is leaving the drugstore chain. Rite Aid last month announced a major restructuring of the drugstore chain’s management ranks with 400 jobs eliminated and Standley leaving the company as soon as a successor is named.
On Thursday, Standley didn’t provide a timeline for a naming of his successor, saying the board is actively engaged in a search. “I’m the guy on the bubble,” Standley told analysts.
Health-care stocks plunge in uncertainty on Obamacare, Congress, drug prices
Health-care stocks were poised to end the week in the red on Friday after lawmakers on Capitol Hill threatened to write new laws tightening control over the nation’s largest pharmacy benefit mangers to curb skyrocketing drug costs.
The Trump administration’s legal challenge to former President Barack Obama’s signature health insurance law, the Affordable Care Act, and Sen. Bernie Sanders’s new “Medicare for All” bill also weighed on the industry’s shares.
The XLV, an ETF that tracks the health-care industry’s biggest companies, was down 1.48% for the week as of Friday morning. The biggest drops were from insurers Anthem, Humana and UnitedHealth Group, which were all down more than 5% for the week through Thursday’s close.
Executives from CVS Health, Cigna, Prime Therapeutics, Humana and UnitedHealth’s OptumRx testified about rising prescription drug costs before the Senate Finance Committee on Tuesday. The PBMs left the congressional hearing mostly unscathed but Chairman Sen. Chuck Grassley, R-Iowa, hinted the committee is ready to write new laws to bring down drug prices.
Ana Gupte, Leerink Partners senior health-care services analyst, said the health-care sell off is mostly driven by the proposed legislative changes to the PBMs’ business model, which are paid so-called rebates by Big Pharma for getting their drugs covered by private and public insurance plans, like Medicare. These so-called “backdoor deals” are suspected by lawmakers to increase drug costs for patients.
It is “very likely” lawmakers force drug companies to give those rebates to consumers instead, starting as early as next year, Gupte said.
Separately, a federal appeals court in New Orleans said Wednesday it will hear arguments in July on a lawsuit backed by President Donald Trump to overturn Obamacare. Dismantling the health-care law would lead to 32 million more uninsured people in the U.S. by 2026, according to an estimate from the Congressional Budget Office.
Separately, Sen. Sanders unveiled a universal health-care plan on Wednesday, which would eliminate most private health insurance by creating a government-run system to provide health insurance for all Americans.
“Newsflow on the Medicare for All proposal from Senator Bernie Sanders and the scheduling of the hearing on the Texas Court decision to overthrow the ACA at the Fifth Circuit Court of Appeals in July also contributed to the sell off in health-care stocks,” Gupte said.
Ross Muken, an analyst at Evercore ISI, told clients in a note that watching the industry’s shares fall has “not been fun,” but added he expects first-quarter earnings to be positive as “fundamentals generally remain positive and utilization still appears under control.”
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