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Friday, August 31, 2018

Suits could change healthcare nationwide if they make it to Supreme Court


Perhaps no recent major legislation has been shadowed as dramatically by legal battles as the Affordable Care Act that President Obama signed into law eight years ago.
Twice since 2010, the sweeping law, often called Obamacare, has ended up before the U.S. Supreme Court. In both cases, Chief Justice John G. Roberts Jr. joined the court’s four more liberal justices to preserve the law.
If Brett M. Kavanaugh, President Trump’s choice to replace retiring Justice Anthony M. Kennedy, is confirmed this fall, he may not tip the balance on the court when it comes to the law’s fate. But he almost certainly will have to weigh in on new cases with potentially far-reaching impact on Americans’ healthcare.
Here are some of the potentially consequential healthcare cases currently making their way through the federal courts.
Because the Supreme Court agrees to hear only a small number of cases every year, the court may not rule on all of these cases. But the justices will probably at least be asked to decide whether they deserve consideration.
Case: Texas vs. Azar
What’s at issue: A group of 20 Republican governors and attorneys general is seeking to invalidate the entire healthcare law. They argue that the law no longer can work because Congress last year eliminated a a penalty on people who do not have health coverage.
Why it’s important: If successful, the lawsuit could have a huge impact, effectively stripping health coverage from tens of millions of Americans. The Trump administration has backed portion of the argument being made by the GOP attorneys general, calling for the elimination of provisions of the law prohibiting insurers from turning away sick consumers.
Status: The case is scheduled for a hearing Sept. 5 in federal district court in Texas.
Prospects: The federal courts in Texas are among the most conservative in the country, making it very possible the case could advance. If the case makes it to the Supreme Court, it would potentially set up a third do-or-die moment for the healthcare law.
Case: Stewart vs. Azar
What’s at issue: A group of low-income residents of Kentucky challenged the Trump administration’s move to allow Kentucky to impose work requirements on enrollees in the state Medicaid insurance program.
Why it’s important: The federal government has not historically allowed states to make work a condition for receiving Medicaid coverage, but starting with Kentucky, the Trump administration has approved a series of state requests to impose work requirements. These mandates, if allowed to stand, are expected to reduce health coverage and fundamentally change Medicaid.
Status: A federal judge in Washington, D.C., in June strongly backed the challenge to work requirements. The Department of Health and Human Services is now reconsidering Kentucky’s request to impose the requirements.
Prospects: The Trump administration is widely expected to once again approve the request. That would spark another legal challenge, which could well get to the Supreme Court someday.
Case: New York vs. Acosta
What’s at issue: A group of 12 Democratic attorneys general are challenging a Trump administration regulation issued this year that makes it easier for individuals and small employers to band together to buy so-called association health plans that do not meet standards set by the Affordable Care Act. They argue the administration is violating the healthcare law’s aim of establishing minimum insurance protections.
Why it’s important: The Trump administration’s moves to loosen regulations on health plans have become a major flash point and test of the healthcare law. If allowed to move forward, proponents argue these moves will make health plans cheaper. But independent analyses have concluded that looser rules will mean more costly plans for sick Americans.
Status: The case was filed in July in federal district court in Washington, D.C., and is awaiting a hearing there.
Prospects: The challenge seems unlikely to get a positive reception from the conservative majority on the Supreme Court, if it ever gets that far. But future lawsuits are expected to challenge other administration moves to relax regulation — such as allowing more short-term health plans that also don’t have to meet current insurance standards.
Case: West Alabama Women’s Center vs. Miller
What’s at issue: The state of Alabama in 2016 passed a law barring a surgical technique known as dilation and evacuation, or D&E, which is commonly used to end a pregnancy in the second trimester. The ban was challenged in court by two abortion providers in the state.
Why it’s important: Alabama is among several conservative states that in recent years have passed new laws seeking to restrict access to abortion services. Other tactics have included limits on Planned Parenthood funding and additional licensing requirements for abortion providers. Some believe this case could give the Supreme Court the opportunity to revisit the broader issue of abortion rights set out by the court in its landmark 1973 Roe vs. Wade decision.
Status: A federal appeals court in Atlanta in August unanimously upheld an injunctionbarring the state from the implementing the new restrictions.
Prospects: Many legal experts believe it is very likely the Supreme Court will take at least one case soon about state restrictions on abortion services.
Case: Columbus vs. Trump
What’s at issue: The city of Columbus, Ohio, and a group of other cities and individuals is suing the president, alleging that he is deliberately undermining the Affordable Care Act, thereby ignoring his constitutional responsibility to enforce the law and subjecting individual Americans to higher healthcare costs.
Why it’s important: This sweeping lawsuit, if successful, would represent a historic rebuke of a president for failing to follow the law and could force the administration to reverse a number of steps it has taken over the last two years to weaken the Affordable Care Act.
Status: The case was filed in August in federal district court in Maryland and is awaiting a hearing there.
Prospects: The case appears to be a longshot, but its arguments summarize the widespread feeling among many working in the healthcare system that the Trump administration has systematically worked to weaken the 2010 healthcare law.
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Facing Shortfall, Kentucky Mulls Ending Medicaid Expansion


Warning of a nearly $300 million potential shortfall in Kentucky‘s Medicaid program, officials say they could eliminate health coverage for more than 480,000 people to balance the state’s budget.
Kentucky’s Medicaid program spends about $11.5 billion every year, but most of that money comes from the federal government. Cabinet for Health and Family Services Secretary Adam Meier told state lawmakers Thursday that Kentucky’s share of that budget will be $296 million short by 2020 — money that must come from the cash-strapped state.
More than 1.4 million people receive Medicaid benefits in Kentucky, or about one-third of the state’s population. Federal law requires the state to cover most of those people. But 480,000 people were added to the Medicaid rolls when former Democratic Gov. Steve Beshear chose to expand the program to cover able-bodied adults. The state is not required to cover those people.
“The expansion population is an optional population,” Meier told a panel of state lawmakers when they asked what could be done to avoid the shortfall.
The comment drew criticism from Kentucky Democratic Party chairman Ben Self, who said Meier “should be ashamed” for using those words. Meier said after the hearing “it was a technical term” used by the Centers for Medicare and Medicaid Services to describe populations that are not required to be covered.
Republican Gov. Matt Bevin has threatened to eliminate the Medicaid expansion before. He campaigned against it during his run for governor in 2015, arguing it was too expensive and did not make people healthier.
Instead of eliminating the expansion, Bevin changed who would be eligible for it. People would have to pay monthly premiums and either get a job, volunteer or go back to school to keep their benefits. He estimated the changes would reduce the state’s Medicaid rolls by 95,000 people and save state taxpayers $300 million over five years. But a federal judge blocked those changes before they could take effect in July.
Meier told lawmakers the state had been counting on those savings to help avoid the shortfall. Other options include cutting benefits, such as vision, dental and pharmacy.
“That’s certainly not anything we would want to do,” Meier said. “We also have a constitutional obligation to come in under budget. Unlike the federal government, we can’t just print more money. We can’t run a deficit.”
Meier said the agency would not make those big decisions without first consulting with the GOP-controlled state legislature. That gives lawmakers a chance to find an alternative when they return to work in January. One idea, pitched by a group of hospitals, would be to tax health care providers. A version of that plan would generate an estimated $372 million in 2020.
The proposal has interested Republican Sen. Ralph Alvarado, an emergency room doctor running for re-election in November who says he supports the Medicaid expansion. He said he wants lawmakers to have a hearing on the proposal, but added he’s already getting pushback from independent providers who say they could not afford to pay the tax and would likely stop seeing Medicaid patients.
“There’s worry that it is really going to limit access,” he said. “But it’s time to have that conversation. It’s time to say, do we want this? If so, how do we pay for it?”
Democratic state Sen. Morgan McGarvey likes the proposal, calling it a “wonderful tool that the General Assembly should look at so that we don’t unplug the Medicaid expansion” because he said it makes people healthier and improves the state’s workforce.
“Medicaid expansion is an investment in Kentucky we should continue to make, not a cost we should cut,” he said. “People’s lives are not a cost for state government.”
Copyright 2018 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Sage Therapeutics: The Lancet publishes data from pivotal trials of brexanolone


Sage Therapeutics announced The Lancet has published an integrated analysis across three, double-blind, randomized, placebo-controlled studies of brexanolone injection in women with postpartum depression. This new analysis, published for the first time, demonstrated significant and clinically meaningful reductions in HAM-D total score, a common measure of depression severity, following treatment with brexanolone 90 microg/kg/h at the primary timepoint of 60 hours compared with placebo. Statistically significant improvement in the HAM-D total score was first observed within 24 hours of initiating treatment and treatment response was durable through the 30-day follow-up. The most common adverse events during treatment across all studies were headache, dizziness and somnolence. The FDA has conditionally accepted the proprietary name ZULRESSO for Sage’s intravenous formulation of brexanolone.
https://thefly.com/landingPageNews.php?id=2784787
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Moody’s sees trouble in ‘unsustainable path’ for nonprofit hospitals


Nonprofit and public hospitals in the U.S. are increasingly facing a pretty daunting financial picture.
The latest evidence: A report from Moody’s Investors Services this week shows the growth of expenses is outpacing the growth of their revenue. That gap is putting the sector on an “unsustainable path,” Moody’s reported in its research announcement.
“Revenue pressures continue to overshadow expense-saving initiatives,” said Moody’s Analyst Rita Sverklik in a statement.
Part of the problem? The shift to value-based care, including less costly outpatient care, is working.
According to the report from Moody’s, the median outpatient visits growth rate exceeded the median admissions growth rate for the fifth straight year as the sector shifts to less costly care. “Reversing sluggish volume trends and growing profitable service lines will be critical to improving the sector’s financial trajectory over the near term,” the report said.
How is this translating to nonprofit hospital margins? Even though the median annual expense growth rate slowed from 7.1% in 2016 to 5.7% in 2017, the annual revenue growth rate slowed more quickly from 6.1% in 2016 to 4.1% in 2017. It will remain the largest strain on hospital profitability through next year.
The report said this is the second year in a row of “significant margin contraction” and is happening in spite of increased merger and acquisition activity, for all of which the report blamed declining reimbursement increases, slowing demand and an increasing portion of revenue derived from government payers.
Revenue cycle management and cost reduction strategies, as well as investment income will be key factors in maintaining debt service coverage metrics if operating cash flow continues to wane, the report said.

This release comes just days after Morgan Stanley, an investment bank and financial services company, released its own concerning analysis that nearly 10% of hospitals are at risk of closure and close to 20% of hospitals are not operating in a “healthy” way. The estimate was based on analysis of data on more than 6,000 hospitals.
That analysis pointed to risk factors for hospitals included having a higher-occupancy facility nearby, low capital expenditures and a lower operating efficiency index, which measures how well a hospital can turn federal reimbursements into profit. But unexpectedly, hospitals with for-profit status, instead of nonprofit status, were also a risk factor.
The Morgan Stanley analysis also cited new competitors and disruptors—such as retail healthcare—and the rise of high-deductible health plans amid skyrocketing prices as factors impacting hospital profits.
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A Virginia VA hospital’s simple solution to prevent pneumonia? Toothbrushes


A Virginia VA hospital found it could dramatically reduce its cases of pneumonia with a surprisingly simple and affordable change: Getting patients to brush their teeth.
Beginning in late 2016, nurses at the Salem Veterans Affairs Medical Center Community Living Centers began ensuring patients brushed their teeth twice a day.
Since then, the number of nonventilator cases of hospital-acquired pneumonia have decreased by 90%.
“Toothbrushing is saving lives,” said Shannon Munro, Ph.D., a nurse researcher at the hospital speaking at the Veterans Health Administration’s Innovation Experience event in Washington, D.C., on Thursday.
Calling the program Project HAPPEN (Hospital-Acquired Pneumonia Prevention by Engaging Nurses), they have expanded the effort to eight VA hospitals so far and have to date prevented 117 cases of pneumonia—saving an estimated 21 lives and reducing costs by $4.69 million.
Developing Project HAPPEN was a collaborative effort between nurses, infection control experts, physicians and dental professionals, Munro said.
“It’s very important to use and our nursing staff have taken on this challenge to help our patients.”
When there is a lot of plaque on a patient’s teeth, it acts like “sticky sandpaper,” irritating the mouth and producing bacteria, Munro said. That bacteria can easily then travel down the throat and into the lungs, causing a pneumonia infection.
Hospital-acquired pneumonia can be a significant risk for patients—especially elderly ones, as are often seeking care in the VA—and a recent study found that cutting rates nationwide by even just half could save nearly 10,000 lives a year.
The HAPPEN program doesn’t require a significant investment in either time or money—Salem VA spent an additional $5 on patients for supplies and it added two minutes of face-to-face time to a nurse’s day.
Munro and her team are working with the Department of Veterans Affairs Innovation Network and its Diffusion of Excellence initiative to spread Project HAPPEN to more facilities. They’re aiming for 40 additional hospitals to join to the program in 2019.
“We plan on rippling this across the United States,” Munro said.
Other hospitals that implemented the program so far have also seen it pay off, with pneumonia rates decreasing by at least 40%. Most recoup the cost for oral care items within three months, as it costs an average of $40,000 to treat one case of pneumonia.
Ryan Vega, M.D., Diffusion of Excellence lead, said that if the program was scaled to every VA Medical Center, an estimated 1,000 lives could have been saved over the two-year life of the pilot program.
“These are real numbers and real people,” Vega said. “The work that these individuals are doing every day is truly changing and saving lives.”
Check out this video produced as part of the project:

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Catalent’s growth blemished by weaker Softgel performance


  • Contract manufacturer Catalent touted the early success of its new Biologic and Specialty Drug Delivery unit on a Tuesday earnings presentation, which helped the company achieve 19% revenue growth for its 2018 fiscal year that ended June 30.
  • Catalent created the unit through a corporate restructuring that split its Drug Delivery Solutions business into two, with the other piece being Oral Drug Delivery. Respectively, the units brought in $196 million and $154 million during the fourth quarter.
  • Though investors seemed pleased with Catalent’s yearlong performance (share value rose about 5% by market’s close Tuesday), analysts pressed the company about the path forward for its Softgel segment, revenue from which fell 7% year over year. Catalent said the decline was due to weaker high-margin product participation and lower consumer health and prescription volumes in North America and Europe.

In the search to reduce production costs, an increasingly popular play among pharmas has been contracting the work out to service providers. The trend has in turn pressured contract manufacturers to expand their operations, either through millions of dollars of internal investment or through M&A.
New Jersey-based Catalent has been particularly fond of the latter. It acquired clinical manufacturing company Pharmatek Laboratories in September 2016, biologics manufacturer Cook Pharmica for $950 million a year later, and drug developer Juniper Pharmaceuticals for $130 million in July.
Catalent expects those latter two acquisitions in particular to help beef up its biologics manufacturing capabilities. Already, the Bloomington, Indiana site brought on through the Cook Pharmica deal was responsible for nearly three-quarters of the revenue growth seen in the Biologics and Specialty Drug Delivery segment during Catalent’s 2018 fiscal year.
But while its biologics business booms, Catalent is facing problems elsewhere.
Net revenue from the Oral Drug Delivery Segment declined year over year when factoring in foreign exchange. The Softgel Technologies segment was also hit late in the year, with fourth quarter revenue down 7% to $241 million under constant currency.
Catalent executives noted on their Tuesday earnings call the company’s Softgel business traditionally has 2-4% annual revenue growth, but was closer to the low end of that range in 2018 because of headwinds like weaker product participation revenue and a shortage of the ibuprofen active pharmaceutical ingredient.
What’s more, CEO John Chiminski said Catalent has noticed a “shift by our prescription pharmaceutical customers to lower volume new product launches targeting smaller patient populations.”
With the ibuprofen shortage unlikely to resolve in 2019, Catalent expects the Softgel unit to continue to grow on the lower side of its historic range, yet still prove valuable for cash flow.
“[W]e are going to continue to lean on a cash flow generation of the Softgel business on a go-forward basis to really continue to fund our growth in the higher growth, higher margin businesses of biologics,” Chiminski said on call.
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Pharma Firm In Hotel, Casino Project To Diversify Portfolio, Boost Revenue


Drugmaker Easton Pharmaceuticals has placed a second bet on the commercial real estate hospitality and gaming sector.
The company is diversifying its portfolio by investing in lucrative assets within various growing industries. This week it grabbed a stake in a 538-room hotel and casino project under development in Europe. The project is expected to generate €77M ($89.7M) on an annual basis.
The project will include five restaurants, a convention center, a shopping center and nightclub, a spa, 1,000 slot machines, 50 gambling tables and a covered parking garage than can house more than 500 vehicles.
“We’ve been looking to reposition the company in more lucrative segments,” Easton CEO Evan Karras said. “My background prior to Easton was real estate, and I was involved in gaming internationally. We determined part of our strategic growth plan is to expand into real estate, hospitality and shipping as well.”
Karras did not disclose additional details about the size or value of the stake Easton acquired in the European project, nor information about the developer, hotel operator or location of the project. Negotiations for the project are still underway and are expected to be completed within the next 30 days.
This is the second investment of its kind. Earlier this month, Easton announced it inked a deal taking a stake in a 270-unit hotel and casino in Greece that generates about €60M ($70M) a year.
Formerly a wound-healing medical drugmaker, Easton now focuses on medications to treat cancer, bacterial and yeast infections and other therapeutic products. The company entered an agreement with leading drug distributor Bayer Pharmaceuticals’ subsidiary Bayer Consumer Case earlier this year to distribute select medication throughout Mexico, making its involvement in the medical drug space somewhat passive, Karras said.
“It’s become a little more passive in the sense that Easton is not required to have its own sales force [thanks to] securing the distribution agreement that we have with companies like Bayer, who distributes the products for us,” Karras said. “That frees up our time to look at additional lucrative businesses to become more well-rounded.”
Easton Pharmaceuticals is a small-to-midsize firm with roughly a dozen employees based in Toronto. In addition to its Food and Drug Administration-approved cancer drugs, Easton has exclusive distribution rights in Mexico and select areas in Latin America for patented medications to treat bacterial vaginosis.
The company’s foray into commercial real estate is still in the early stages, and Karras foresees the company delving into other industries using proceeds from its real estate investments in the near future.
“Revenues and profits from these operations will help fund additional growth for the company [and] new acquisitions,” he said.
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