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Sunday, July 21, 2019

Nursing homes: Antipsychotic change tiptoes toward danger

For all the progress nursing homes have made in reducing antipsychotic medications — and it has been significant — occasionally you hear whispers about a contributing factor to the success.
It relates to how certain conditions, such as Huntington’s disease, Tourette’s syndrome and schizophrenia, are exempt in relationship to data around antipsychotic resident rates. Over the past few years, I’ve heard nurses make jokes about how many more schizophrenic patients they have, or expect to have. Except I never really know if they’re joking.
And neither does the Center for Medicare & Medicaid Services, noting in its proposed rule this week that “some nursing homes are circumventing the pressure to reduce antipsychotic drug use by seeking an appropriate diagnosis from a physician that would justify the use of these drugs for a resident, typically schizophrenia.” It noted how AMDA released a statement in 2017 on “Diagnosing Schizophrenia in Skilled Nursing Centers,” which said that clinicians should be mindful of labeling patients with other diagnoses to justify the use of medications or other treatments.”
“Schizophrenia is a different diagnosis than dementia, with different protocols of care,” reasserted LeadingAge Vice President of Regulatory Affairs Janine Finck-Boyle on Thursday.
But if you are running CMS, you’ve been faced for several years with these questions for psychotropic drugs: One, how do you encourage decreasing use of unnecessary drugs for nursing home residents? Two, how do you discourage the wrong diagnoses to keep people on a medication? Three, how do you make a requirement that balances the “right” thing for residents with an extra burden on beleaguered nursing providers? The last question is constant and endless, a Mobius strip that’s especially tricky given the Trump administration’s firm belief in loosening regulations.
So CMS found a middle ground, one in which it said it will allow PRN (Pro re Nata) prescriptions for antipsychotics to run more than 14 days if an attending physician or prescriber documents the rationale in a resident’s medical record. They also must indicate the expected duration.
It stressed providers still must “ensure that the proposed requirements provide sufficient protection for residents from receiving inappropriate or unnecessary drugs and that medications are prescribed for residents based on their healthcare needs and not for the convenience of the staff or any other inappropriate reasons.
“However, we must also be mindful not to propose requirements that are overly burdensome to the facilities and healthcare providers that do not contribute to the quality of care for the residents, especially if they could result in interfering with residents receiving appropriate care for their health care needs,” the rule adds.
The same requirements for all psychotropic drugs will “simplify the survey process and reduce improper deficiency citations, as well as remove potential obstacles for mental health professionals to provide quality care for residents,” it added.The revisions to section 483.45(e) also mean all psychotropic medications are equal when it comes to PRN orders.
Finck-Boyle stressed that in addition to providers’ real progress, attitudes in nursing homes around antipsychotics have changed significantly.
“Today’s thinking is that the evidence does not support the use of them for dementia. It is really important to remember that nursing homes — not regulators — have done the difficult work of finding alternatives to the use of antipsychotic medications and putting these alternatives into practice, with staff retraining and revisions of care protocols,” she said.
The PRN change will help further reduce antipsychotic use, she believes.
The contrasting view is geriatrician and author Al Power, M.D., who says the change relies on a fallacy that “A PRN dose is being given when it is needed.”
“There are approaches out there that have significantly reduced or eliminated antipsychotic use in dementia,” he wrote yesterday. “Those who haven’t learned them need to be educated, not to have guidelines that make it easier to do the wrong thing.”
Ultimately, whether you cheer this change depends on how optimistic you are feeling, not only about your co-workers but also about the industry. Or, to quote Dirty Harry: “You’ve got to ask yourself one question. Do I feel lucky? Well, do ya, punk?”

Novartis issues sunny Sandoz forecast in spite of weak U.S. generics market

Novartis has spent much of the last year overhauling its generics division, Sandoz, by increasing its focus on hard-to-make drugs and doubling down on its use of digital technologies to improve everything from drug development to commercialization. Those efforts are paying off, the company said during its second-quarter earnings release earlier this week.
But are they really? Or was the company premature in raising its full-year expectations for Sandoz from “broadly in line” to “low-single-digit growth” at a time when pricing pressure in the U.S. is making it difficult for many generics makers to compete?
That question weighed on the minds of some Wall Street analysts Thursday after Novartis reported that Sandoz’s sales jumped 3% year-over-year to $2.4 billion during the second quarter, despite price erosion of 7%, most of which occurred in the U.S. The company cited strength in its ex-U.S. business, fueled by European growth and demand for biosimilars.
On the surface, the Sandoz results looked “encouraging,” analysts from RBC Capital Markets said in a note to investors, but “the declines in the U.S. remain in the mid-teens with [a] turnaround not yet being seen.”

Analysts at SVB Leerink dug into the Sandoz numbers, comparing them to National Average Drug Acquisition Cost (NADAC) data, and they didn’t like what they found. NADAC reports just 4% generic price erosion in the U.S., “an improvement from historical levels over the past two years,” the analysts wrote in a note to clients. Sandoz’s price erosion was better than the 9% the company reported in the first quarter, but overall, it “doesn’t appear to be indicating” the improving trends in the broader U.S. generics market, the SVB Leerink team said.
Last September, Novartis kicked the Sandoz turnaround effort into high gear by offloading 300 underperforming generics in its oral solids and dermatology product lines to Aurobindo for $1 billion. That deal included exiting several manufacturing plants.
Meanwhile, Novartis has been giving the Sandoz division more autonomy to innovate, bringing in ex-GlaxoSmithKline digital chief Richard Saynor as CEO. In addition to boosting its focus on digital technologies, Sandoz signed a deal to market Shionogi’s drug to treat opioid-induced constipation, Rizmoic, in the U.K., the Netherlands and Germany.
But analysts at Wells Fargo aren’t convinced that those initiatives are enough to counteract the struggling U.S. market for generics. They believe Sandoz’s second-quarter results came from Novartis “having severely pruned its U.S. core generics business in the past year, and as such, the negative impact in the U.S. is not as severe as it would have been if the rationalization had not happened,” they wrote in a post-earnings note.

Novartis’ generics turnaround effort has been complicated by its rivalries with up-and-coming Indian generics makers like Dr. Reddy’s, Sun Pharma and Cipla. In fact, over the past year, five Indian companies and Canada’s Apotex have outpaced Sandoz and other stalwarts in U.S. prescriptions for generic drugs, Evercore ISI reported in April.
Novartis CEO Vas Narasimhan said he’s holding out hope that upcoming launches from Sandoz’s generic and biosimilar pipeline will drive the growth the company is expecting. They include inhaled drugs as well as injectables, and potentially a biosimilar version of Amgen’s blockbuster Neulasta.
During the earnings call, Narasimhan said he’s “proud with how Sandoz is performing ex-U.S.,” and that “within the U.S., “our team continues to work hard in what is a challenging environment.” Still, Narasimhan conceded, “we haven’t seen stabilization in that core [generics] business in the U.S.”

As filgotinib filing nears, Gilead should nab Celgene’s Otezla, analysts say

A list of buyers could line up for Celgene’s Otezla, which Bristol-Myers Squibb is selling to advance the $74 billion merger, but a team of analysts says one candidate makes the most sense: Gilead Sciences.
Gilead’s oral JAK inhibitor filgotinib is moving closer to an FDA filing in rheumatoid arthritis (RA), and the company just doubled down on inflammation with an expanded $5.1 billion partnership with collaborator Galapagos. Buying Otezla “would represent a bolt-on strategy to accelerate Gilead’s entrance into the [inflammation and immunology] space,” RBC Capital analysts Brian Abrahams and Gregory Renza said in an investor note Thursday.
Not only does Gilead have the money to bag Otezla, but folding in the product’s commercial infrastructure would be a logical move ahead of its expected filgotinib launch, the analysts said.
Currently, the Street figures Otezla’s sales will peak at around $2.5 billion, up from $1.6 billion in 2018. By RBC’s calculations, the drug’s operating margins stand at around 62% to 67%. That translates into a value of about $8 billion, they said, and Gilead could afford the buy as long as competitive bidding doesn’t boost the price above $9.6 billion.
Plus, as of the first quarter, Gilead had $30.1 billion in cash—meaning the deal is well within its reach.
Thing is, Gilead needs to build out operations around filgotinib, including sales and marketing in indications like RA, psoriatic arthritis and lupus. To do that, it would spend about 65% of what Celgene’s been laying out on Otezla-related SG&A, the analysts figure—so why not just step into Otezla’s well-established position, the RBC analysts argued.

Filgotinib’s regulatory path just recently became clearer. It had met the efficacy bar in late-stage testing, but pharma watchers worried its side-effects data could stall an FDA filing. But Gilead said July 1 that it had met with the FDA about potential testicular side effects and decided to file for approval soon, before related toxicity studies wrap up.
Then Monday, it expanded the Galapagos deal to another 10-year partnership, gaining rights to all of Galapagos’ current and future programs for $3.95 billion upfront—a move seen as a further commitment to immunology under new CEO Daniel O’Day.
Gilead needs a new direction as its hepatitis C drugs continue to decline, its much-hyped CAR-T drug scrambles for traction and its next-gen liver drug fails to deliver. In the first quarter, CAR-T drug Yescarta only racked up $96 million, and its hepatitis C franchise fell further to $790 million in sales from $1 billion for the same period in 2018. IIts lead nonalcoholic steatohepatitis candidate, selonsertib, recently flunked two phase 3 trials one after the other.

O’Day, who just took the reins this year, wasted little time in setting a new course. For instance, the company decided to make Kite Pharma an independent business, and just last week named Eli Lilly’s Christi Shaw as the unit’s CEO.
“[W]hile we still like the high science and long-term opportunity as delivery infrastructure improves and cell therapies move into earlier lines, we believe some ‘distance’ should both improve the platform’s agility as well as investor perceptions,” the RBC team said back in May.
O’Day is also replacing some top-level executives in an overhaul that just keeps growing. The company’s longtime chief financial officer, Robin Washington, is retiring next year, and its R&D chief John McHutchison, chief patient officer and human resources leader are all leaving.

Roche doomsday: Long-feared Herceptin, Avastin biosims bust into U.S. market

For years, Roche’s blockbuster oncology troika—Rituxan, Herceptin and Avastin—dominated sales stateside and abroad. For two drugs in that superstar trio, though, those landmark years could be approaching an end.
Amgen and Allergan Thursday launched U.S. biosimilars of both HER2-positive breast cancer med Herceptin and colorectal cancer treatment Avastin, threatening a combined $5.9 billion in U.S. sales in 2018. Amgen’s Avastin biosim, Mvasi, was the first oncology biosim approved by the FDA in late 2017, and the agency approved Herceptin biosim Kanjinti in June.
Both drugs will launch at a wholesale list price 15% cheaper than their reference biologics, the companies said. For Mvasi, that means a price of $677.40 per 100 milligrams and $2,709.60 per 400 mg single-dose vial. Kanjinti will hit the market at $3,697.26 per 420 mg multidose vial.
“Following several recent launches in Europe, we are excited to be launching our first two biosimilars in the U.S., which will provide for immediate savings for Medicare patients and commercial payers,” Murdo Gordon, Amgen’s commercial chief, said in a statement. “We have several more biosimilars advancing through our pipeline, even as we continue to drive innovation through novel therapies for cancer and other serious diseases.”

For Amgen and Allergan, the only drugmakers that chose not to cut a delayed launch date deal with Roche for their biologics, holding out on a settlement could provide major dividends in sales—and provide a gloomy forecast for other competitors.
Bengalaru, India-based Biocon, a partner of Mylan’s on a Herceptin biosim approved back in late 2017, was trading down 8.17% Thursday on the Bombay Stock Exchange after the news broke. Mylan was one of a group of drugmakers that reached an agreement with Roche not to launch Herceptin biosims until mid- to late 2019, including Pfizer, Samsung Bioepis and the Teva Pharmaceutical-Celltrion team.

With Herceptin and Avastin expected to take major sales hits with the wave of biosims approaching, Roche’s top-performing Rituxan—with $4.24 billion in U.S. sales in 2018—could be next.
Teva and Celltrion are expected to launch Truxima, their Rituxan biosim, at some point this year. A Rituxan copy from Fosun Pharma’s Shanghai Henlius Biotech was the first-ever biosim approved in China, foreshadowing the legacy megablockbuster’s continued decline overseas. In Europe, where Rituxan biosims have already dropped, sales of the drug plummeted 46% in the fourth quarter of 2018.

With Herceptin’s sales chances expect to slip, Roche is leaning into its stable of newer drugs including HER2-positive breast cancer med Kadcyla, PD-L1 inhibitor Tecentriq, hemophilia med Hemlibra and multiple sclerosis therapy Ocrevus, which Roche has touted as its best launch ever.
In the first quarter, the trio of Rituxan, Avastin and Herceptin actually outperformed analyst consensus, but the drugmaker’s newer offerings significantly outshot analysts’ forecasts, with Ocrevus leading the way. The drug registered first-quarter sales of CHF 836 million ($829 million), beating consensus by CHF 111 million, or 15%. Meanwhile, Hemlibra doubled its first-quarter sales from the previous year to CHF 219 million ($217 million), beating analyst expectations by 62%.

Why you’ll have to go farther for some hospital care

Hospitals are embracing specialization as cost pressures and consolidation upend healthcare service models.
Expanding Chicago-area chains have begun reconfiguring themselves as networks of specialty hospitals with narrower offerings. Three-hospital Loyola Medicine is consolidating open-heart surgery at its flagship facility in Maywood. And NorthShore University HealthSystem is centralizing orthopedics, urology and open-heart surgery at various locations in its four-hospital network.
By centralizing services like cardiology and obstetrics at high-traffic facilities, hospital chains aim to improve care and save money on surgical equipment, space and staff. Intended to boost hospitals’ bottom lines, the move away from traditional one-stop shopping means some patients—even those in the Chicago area—could be forced to seek care farther from home.
“In urban settings, don’t underestimate how hard it may be for certain families to get from one part of town to another,” says Steven Shill, a partner and national leader at the BDO Center for Healthcare Excellence & Innovation.
Still, the consolidation of certain service lines is expected to increase as hospitals continue to combine and financial pressures intensify.
“Service rationalization has perhaps the greatest potential for transforming cost structure,” consultancy Kaufman Hall said in a 2018 report. “Forward thinking healthcare leaders . . . are concentrating resources in services that will result in long-term relevance and sustainability and consolidating or divesting services that are not expected to add value going forward.”
Amita Health, which acquired 10-hospital Presence Health last year, recently got approval from the state to discontinue certain services at three former Presence hospitals due to low utilization.
Amita Health St. Joseph Hospital in Lakeview cut its 23-bed comprehensive physical rehabilitation unit as admissions fell nearly 55 percent from 2014. It saw only 92 patients last year. Amita will continue offering rehab at Sts. Mary & Elisabeth Medical Center in Chicago, about 5 miiles away.The Lisle-based 19-hospital network also discontinued open-heart surgery programs at Amita Health St. Francis Hospital in Evanston and Amita Health Sts. Mary & Elizabeth. While each hospital was performing about 40 to 50 open-heart surgeries annually, state regulators recommend at least 200 such procedures be performed on adult patients annually at facilities that have been open for three years. In its application, Amita says volumes cannot reasonably be anticipated to increase given the advent of less-invasive procedures. Open-heart surgeries still will be performed at Amita Health Resurrection Medical Center in Norwood Park.
“Physicians, nurses and the technical staff who work with patients are typically at their very best when they do a lot of the same thing,” Amita CEO Mark Frey says. “When they have high volume, they not only tend to become extremely proficient, but they become extremely efficient and effective. A lot of that drives better patient outcomes.”
MORE CONSOLIDATION AHEAD
Meanwhile, Loyola-owned Gottlieb Memorial Hospital in Melrose Park filed an application with the state this month to move its open-heart surgery program to Loyola University Medical Center 4 miles away. Gottlieb says it performed 108 open-heart surgeries last year.
As the leader of a regional chain with a large network of outpatient clinics, Loyola CEO Sean Vincent says he views the system as a whole—rather than looking at each individual facility—to identify the best way to provide services to patients. Loyola will consolidate more services in the future to further improve efficiencies and quality, he adds.
Service lines ripe for rationalization include cardiology, obstetrics and radiology, where there’s a significant capital outlay, Shill says. Consolidation allows hospitals to cut costs by reducing equipment and clinicians and repurposing space, he adds.
Frey says Amita doesn’t have immediate plans to cut additional services, but it will continue looking at how to best use its assets and meet community needs.
NorthShore takes the concept a step further, centralizing different services at each of its four hospitals, all of which still provide emergency and outpatient services but otherwise focus on a designated specialty. NorthShore’s Skokie Hospital specializes in orthopedics, Glenbrook Hospital handles ophthalmology and urology, and open-heart surgery is performed at Highland Park Hospital and Evanston Hospital. Swedish Covenant Hospital, which NorthShore agreed to buy last month, will continue providing the full scope of services.
The relatively close proximity of NorthShore’s four existing hospital campuses enables the chain to consolidate certain services and transfer individuals who require specialized care “with fairly nominal disruption to patients and families,” NorthShore CEO J.P. Gallagher says.
With the Orthopaedic & Spine Institute, which opened in April, on track to hit cost-reduction and growth targets, Gallagher says it’s likely NorthShore will consolidate additional service lines in the future.
“The whole point is not to go kicking and screaming and hope things don’t change. That ship has sailed,” Gallagher says. “We have a responsibility to embrace change, thoughtfully and carefully.”

Calif. patients score victory in nursing home transfer case

California must enforce a federal law that protects patients who are transferred from skilled-nursing facilities and unable to be readmitted, a federal appeals court ruled Thursday.
The plaintiffs—three Medi-Cal beneficiaries and the not-for-profit California Advocates for Nursing Home Reform—alleged that the state violated federal law by allowing nursing homes to transfer patients to hospitals and block their return, even after a hearing determined that the individuals must be readmitted. A 9th U.S. Circuit Court of Appeals judge forbade what she described as “meaningless show trials” since the state didn’t actively enforce SNFs to uphold previous hearing appeals on transfers and discharges that essentially act as a safety-net for patients.
“If you don’t enforce a hearing’s results, then why have a hearing?” said Matt Borden, plaintiffs’ counsel with Braun Hagey & Borden.
Nursing homes financially benefit by transferring low-reimbursed Medi-Cal patients and replacing them with Medicare beneficiaries or the commercially insured, he said. The Medi-Cal patients would then end up in the hospital for months at time, which jeopardized their health and cost the state tens of millions of dollars, Borden said.
“Patients can win the hearing and then the facility essentially says ‘we don’t care’ and the state didn’t enforce it,” said Borden, who described the case as one of the first of its kind. “This means California is going to have to do something to enforce the results of these decisions. This ruling doesn’t say how, but the fact they have to enforce it is a huge benefit to residents in California and hopefully other states are watching for rulings like this.”
Importantly, the court did not decide whether the state’s process was lawful or unlawful, said Mark Reagan, a managing shareholder at Hooper, Lundy & Bookman who represented the California Association of Health Facilities, which served as an amicus on the case. It does not foretell the ultimate result in the case, he said.
“We disagree with the narrative advanced by the plaintiffs as to a purported ‘dumping’ epidemic,” Reagan said in a statement. “Our experience has been that the vast majority of the transfers or discharges relate to residents who are well enough to return home, present needs that cannot be appropriately served in the SNF in which they reside or present behaviors that place other residents and staff at risk for their safety. We believe that the individual plaintiffs in this case fall within these categories.”
The appeals court overturned the lower court’s dismissal of the case, when it initially said that under the current statutes, Congress did not intend to create an enforceable right to a meaningful hearing.
Now, a successful appeal must have “some actual effect on the challenged action, here a transfer or discharge,” Judge Marsha Berzon wrote for the court. Residents have the right not only to appeal a discharge or transfer, but also to “an enforceable order overturning an invalid discharge or transfer,” she wrote.
Typically, state officials will fine a SNF several thousand dollars if the patient was found to be unnecessarily discharged to the hospital and the facility will agree to educate their staff. But the fine can be appealed and the process can drag out for months.
Meanwhile, the increase in the alleged “patient-dumping” trend over the past decade has cost the state more than $70 million, the plaintiffs wrote in their complaint.
Skilled-nursing facilities receive on average $190 per day for a Medi-Cal resident while the cost of a hospital bed is $1,800 a day, according to the complaint. One of the plaintiffs had spent 136 days in the hospital since he had won the right to be readmitted, which cost taxpayers nearly $220,000, the lawsuit alleged.

Insurers May Cover Statins, SSRIs, Inhalers at 100% Under Trump Notice

In a win for the health savings account industry and consumers with certain chronic illnesses, the Trump Treasury Department has broadened the list of preventative care items that may be covered at 100% under a high-deductible health plan before the deductible kicks in. But whether insurers will absorb the new costs or pass them on to employers and consumers in premium increases is a big unknown.
Notice 2019-45, Additional Preventative Care Benefits Permitted to be Provided by a High Deductible Health Plan, is effective immediately. That’s important because now is when health insurance companies and employers are setting up plans together for the 2020 plan year.
The thinking is that more employers will move toward high-deductible health insurance plans, with accompanying health savings accounts—and more employees will choose them–if these plans cover more preventative services before the deductible. Before, if a plan included these preventative services, it wouldn’t be an HSA-eligible plan.
“It’s opening up HSAs to more people, on the face of it; that’s what we would expect,” says Shobin Uralil, cofounder of health savings account provider Lively. By opening and contributing to an HSA, consumers can pay for immediate or future health care expenses with big tax savings.
The notice “does not expand the scope of preventive care beyond the list.” So if you’re thinking, well, if SSRIs are covered, SNRIs should be covered, too–tough luck. And the notice makes clear that prior notices on preventative care are still in force (vasectomies are not preventative; that’s Notice 2018-12). Also, note that the services/meds must be prescribed in relation to a specific diagnosis. Here’s the list:
Preventive Care for Specified ConditionsFor Individuals Diagnosed with
Angiotensin Converting Enzyme (ACE) inhibitorsCongestive heart failure, diabetes, and/or coronary artery disease
Anti-resorptive therapyOsteoporosis and/or osteopenia
Beta-blockersCongestive heart failure and/or coronary artery disease
Blood pressure monitorHypertension
Inhaled corticosteroidsAsthma
Insulin and other glucose lowering agentsDiabetes
Retinopathy screeningDiabetes
Peak flow meterAsthma
GlucometerDiabetes
Hemoglobin A1c testingDiabetes
International Normalized Ratio (INR) testingLiver disease and/or bleeding disorders
Low-density Lipoprotein (LDL) testingHeart disease
Selective Serotonin Reuptake Inhibitors (SSRIs)Depression
StatinsHeart disease and/or diabetes
The Treasury and the IRS, in consultation with HHS, will review the list every five to ten years to make additions or deletions.