Molina readies for ‘significant’ Medicaid member bump as more lose jobs

• Molina executives said it will likely experience a “significant” increase of Medicaid and exchange members as the pandemic continues to wash over the country and forces more out of work and job-based coverage, according to comments made during Friday’s first quarter earnings call.
• The company reaffirmed its 2020 earnings outlook with “enhanced confidence” given the “net-positive” effects likely to stem from the impact of novel coronavirus, as executives noted a steep decline in elective procedures and utilization very late in March and the limited impact COVID-19 has had on costs so far.
• Overall for the first quarter, Molina beat Wall Street expectations on earnings per share and revenue which increased to $4.5 billion. Yet, it was only one of two managed care organizations to miss on medical loss ratio targets, which increased to 86.3% due to higher costs in its marketplace business.

Another 3.8 million Americans filed for unemployment last week, bringing the total of out-of-work Americans to more than 30 million since the outbreak unfolded.
That presents an opportunity for insurers like Molina that are primarily positioned in Medicaid and Affordable Care Act exchange lines of business. Medicaid coverage is based on income and reserved for low-income Americans and the marketplace, or exchanges, tie coverage to income and financial help for those with incomes below a certain threshold.
Although its membership is likely to swell due to current economic conditions, Molina CEO Joe Zubretsky cautioned investors Friday by saying, “by how much we do not yet know.”
Zubretsky said Medicaid has proven it’s a stress-tested model that works in both robust economies and those in a recession.
So far, through April 27, 950 of Molina’s members have been hospitalized with COVID-19, a small fraction of Molina’s 3.4 million membership base. The average length of stay was about 10 days for these members, but they have not been able to assess the costs per episode yet, executives said Friday.
Its plans in Washington, California and Michigan were most affected. However, its Michigan plans have experienced the highest number of cases.
By business line, Medicare members have experienced the highest percentage of COVID-19 diagnoses followed by Medicaid and marketplace members, in line with reports of the disease disproportionately affecting older Americans.
Molina also said it had entered into a definitive agreement to acquire Magellan Complete Care for $820 million in cash. The deal is expected to close in the first quarter of 2021. The deal gives Molina about 155,000 more members. Last year, Magellan generated more than $2.7 billion in revenue, according to Molina.
Magellan operates in six states, three of which would be new for Molina, including Arizona, Virginia and Massachusetts.
https://www.healthcaredive.com/news/molina-readies-for-significant-medicaid-member-bump-as-more-lose-jobs/577191/

Cuomo asks insurers to waive health fees for essential workers

NY Governor Cuomo, in his daily briefing confirmed the schools for the remainder of the academic year would be closed statewide, with a notice on summer schedule to be decided by the end of May.

With regards to support for frontline workers, he said he asked insurers to waive copays, deductibles for essential workers who seek mental health services due to the difficult circumstances in which they’ve been asked to work.

https://seekingalpha.com/news/3567728-ny-gov-cuomo-asks-insurers-to-waive-health-fees-for-essential-workers

Indian pharmas eye FDA ‘virtual’ facility checks in COVID-19 inspection lockdown

India, one of the largest drug exporters in the world, has been hit hard by the novel coronavirus pandemic as global lockdowns have complicated daily operations. On one measure—the FDA’s nearly two-month ban on foreign inspections—Indian drugmakers are pushing back. And they may have come up with a novel solution.
Major Indian pharmaceutical companies are asking the FDA to conduct “desk reviews” or virtual facility inspections during the pandemic in order to “ensure the continuous supply of much-needed drugs in the United States,” according to a letter from the Indian Pharmaceutical Alliance (IPA) obtained by FiercePharma.
In correspondence dated April 20 to Janet Woodcock, director of the FDA’s Center for Drug Evaluation and Research, the alliance asked for virtual reviews of facilities that are new, are slated to produce a new class of drugs or have completed a corrective action plan following a previous inspection failure.
Among the alliance’s members are India’s largest drug manufacturers, including Cipla, Cadila, Dr. Reddy’s Laboratories and Abbott India.

The group also requested the FDA consider recognizing inspections by foreign regulators and temporarily waiving on-site inspections “based on past inspection history and the critical nature of products, such as drug shortages or products that do not currently have generic alternatives.”
If the agency agreed to the temporary measures, “companies would individually reach out to the FDA with regards to inspections or re-inspections pending so that the agency can propose the best path to move forward under the current circumstances for each company,” the letter read.

The FDA on Wednesday confirmed it had received the alliance’s letter and so far has not performed any livestream video inspections.
“These alternative approaches to on-site inspection have provided FDA with useful information,” a spokesman said.
The FDA pointed to a March 10 order to outline its current policy, which stipulates that the inspection ban would continue through April. The agency hasn’t publicly announced whether the ban will be renewed.
If the FDA does choose to renew its order, it could continue to hamstring India’s production of generic and branded meds on which the U.S. relies. The move would also potentially damage India’s attempt to flex its muscle as a global pharmaceuticals producer at the expense of world leader China.

Earlier this month, Bloomberg reported the Indian government is planning to escalate domestic production of pharmaceutical ingredients to counteract a perceived over-reliance on Chinese imports now hampered by COVID-19 shutdowns.
India has identified and prioritized production of 53 raw materials and active pharmaceutical ingredients (APIs) as part of its “China-plus-one” policy to fill in supply gaps of affordable medicines, sources told the outlet. The plan includes investing $1.3 billion in domestic pharmaceutical producers and potentially reviving state-run companies to ramp up cheap generic production.
According to Bloomberg, 70% of India’s imports of APIs come from China, totaling $2.4 billion of India’s $3.56 billion in import spending for those products each year. In early march, India stopped exports of 26 APIs and drugs that range from paracetamol––the ingredient in Tylenol––to antivirals like acyclovir for treating shingles and antibiotic neomycin. India is reportedly upping production of paracetamol and antibiotics penicillin and ciprofloxacin.
https://www.fiercepharma.com/manufacturing/indian-pharmas-call-fda-to-perform-virtual-facility-checks-during-covid-19-inspection

COVID-19 restrictions send generic drug shipping costs through the roof

Global restrictions spawned by the coronavirus pandemic have sent transport costs skyrocketing for generics and biosimilar makers, a trade association finds. But despite the dire report, COVID-19 might not be all bad news for the industry.
Average shipping costs have jumped by 224% as the pandemic added new kinks to the global drug supply chain, a survey from the Association for Accessible Medicines (AAM) found.
In a notable case, one drugmaker’s cost to ship its medicines skyrocketed by 413% as an economic slowdown and restrictions on international travel raised the price of global transport, AAM said.

“The global pharmaceutical ecosystem is built on a highly complex supply chain,” AAM interim CEO Jeff Francer said in a release. “This ongoing crisis illustrates the importance of developing new strategies and policies that enhance the pharmaceutical supply chain in the U.S. and increase our nation’s self-sufficiency.”
AAM highlighted government-mandated work-from-home orders and “unpredictable” trade restrictions as cost drivers during the pandemic.

A lasting bump in shipping costs would eat away margins at a time when generic drug makers are already dealing with pricing pressure abroad and stateside. But COVID-19 could also prove a boon for the industry, which supplies 90% of U.S. prescriptions each year, AAM said.

After some “initial shocks” from the pandemic, the global generic drug supply chain is likely to rebound and deliver strong growth numbers despite some potential “spot shortages,” Bernstein analyst Ronny Gal said in a March note to investors.
A potent mixture of patient and channel stockpiling and manufacturer “allocation” measures will drive generics pricing upward in the short term, Gal argued, and could have a “lasting positive impact” on the industry in future quarters.

However, those spot shortages have already become a concern for federal regulators and hospitals working on the front lines of treating COVID-19 patients. Earlier this month, the FDA said it would temporarily allow hospitals to source hard-to-find drugs from compounding pharmacies to treat certain patients hospitalized with severe COVID-19, particularly the critically ill needing mechanical ventilation.
The regulation, meant to last as long as hospitals continue to encounter shortages of key drugs, applies to compounding pharmacies that aren’t already sanctioned by the FDA as “outsourcing facilities.” To qualify, the copycat drugs must be listed on the FDA’s shortages list, and hospitals must have exhausted all other options to access a commercial version of the drug.
The FDA emphasized that its extraordinary step was designed to be temporary as the pharmaceutical supply chain faces “unprecedented disruptions” amid the novel coronavirus pandemic to provide drugs used for patients placed on respirators.
https://www.fiercepharma.com/manufacturing/covid-19-restrictions-send-generic-drug-shipping-costs-through-roof-survey

3M sues vendors for offering to sell non-existent N95 respirators

3M (MMM -1.9%) says it is suing five vendors for allegedly attempting to target government officials with fraudulent offers to sell non-existent N95 respirators at inflated prices.

The company says one case claimed to have up to 5B respirators at inflated prices, falsely affiliating themselves with 3M.

N95 respirators, which are designed to filter 95% of airborne particles, are among personal protective gears most needed by medical professionals battling COVID-19.

3M says it filed a total of 10 lawsuits in April in its effort to combat fraud.

https://seekingalpha.com/news/3567702-3m-sues-vendors-for-offering-to-sell-non-existent-n95-respirators

Analyst action, May 1

Axcella Health (NASDAQ:AXLA) initiated with Buy rating and $10 (115% upside) price target at BTIG Research.

Viking Therapeutics (NASDAQ:VKTX) initiated with Buy rating and $9 (56% upside) price target at BTIG. Shares up 2% premarket.

Y-mAbs Therapeutics (NASDAQ:YMAB) initiated with Buy rating at Janney Montgomery.

Mirati Therapeutics (NASDAQ:MRTX) upgraded to Overweight with a $116 (36% upside) price target at JPMorgan.

ResMed (NYSE:RMD) upgraded to Outperform with a $200 (29% upside) price target at Oppenheimer. Shares up 2% premarket.

Seattle Genetics (NASDAQ:SGEN) upgraded to Buy with a $175 (28% upside) price target at Guggenheim.

Cerner (NASDAQ:CERN) downgraded to Hold with a $72 (4% upside) price target at SunTrust.

NovoCure (NASDAQ:NVCR) downgraded to Market Perform with a $78 price target at Oppenheimer. Shares down 2% premarket.

PRA Health (NASDAQ:PRAH) downgraded to Market Perform at William Blair.

PolarityTE (NASDAQ:PTE) downgraded to Market Perform at Oppenheimer.

https://seekingalpha.com/news/3567579-guggenheim-likes-seattle-genetics-in-premarket-analyst-action

AbbVie Lowers 2020 Earnings Outlook

AbbVie Inc. on Friday lowered its earnings outlook for 2020 as it reported higher profit and sales for the first quarter as customers stocked up amid the Covid-19 pandemic.
The biopharmaceutical company said it now expects per-share earnings of between $7.60 and $7.70, down from its prior guidance of $7.66 to $7.76.
The company backed its adjusted earnings guidance of between $9.61 and $9.71 a share.
Analysts polled by FactSet were expecting full-year adjusted earnings of $9.60 a share on sales of $35.34 billion.
The company said it will issue combined guidance following the close of its planned acquisition of Allergan PLC.
Shares rose 1.3% in premarket trading.
AbbVie also said it is collaborating with health authorities and institutions to determine the efficacy and safety of Kaletra/Aluvia, the company’s antiretroviral therapy for HIV treatment, against Covid-19.

https://www.marketscreener.com/ABBVIE-INC-12136589/news/AbbVie-Lowers-2020-Earnings-Outlook-30511368/