Obama focuses on cost containment as solution to healthcare reform.
To generally positive media reviews, President Obama addressed Congress for the first time last night. Obama listed healthcare reform as one of the central pillars of his recovery plan, but he reserved offering specifics of his plan until he outlines his budget Thursday. Post-speech TV analysis on specific reaction to Obama's healthcare reform remarks was limited.
On ABC News (2/24, 10:20 p.m.), White House bureau chief George Stephanopoulos said, "Interesting the way the president approached healthcare. He didn't lead with the idea of expanding coverage for more Americans. He led with cost containment. He knows that the only way you can solve this problem, and believes the only way you can solve this problem in the long run is to get cost controlled, and the big government programs with Medicare and Medicaid that will help get cost control in the private sector, and only then can you hope to expand coverage."
In a front page story, the New York Times (2/25, A1, Zeleny) reports, "Obama urged the nation on Tuesday to see the economic crisis as reason to raise its ambitions, calling for expensive new efforts to address energy, healthcare, and education programs even as he warned that more money might be needed to bail out banks." Obama "was vague about how he intends to make healthcare more affordable and accessible, saying only that the budget he will release on Thursday will make a down payment on the goal of 'quality, affordable healthcare for every American.'"
Also in a front page story, the Los Angeles Times (2/25, Parsons, Nicholas) reports that Obama "did not say how the spending plan would begin reducing the ranks of the more than 47 million people in America without [healthcare] coverage, a potentially contentious process that is sure to stoke an ideological battle over government's role in providing healthcare." He also did not "indicate how his administration would begin wringing savings from the gargantuan healthcare system, a process likely to be equally difficult."
The Wall Street Journal (2/25, Weisman) reports that Obama "vowed to tame healthcare costs while expanding access to insurance, and promised to not let the opportunity for comprehensive reform slip away, as has been the case for many presidents before."
USA Today (2/25, Wolf), the Washington Post (2/25, A1, Pearlstein), the AP (2/25, Loven), the Washington Times (2/25, Dinan), McClatchy (2/25, Thomma), CNN (2/25, Martin), The Politico (2/25, Rogers), the Detroit Free Press (2/25, Spangler), Roll Call (2/25, Koffler), and The Hill (2/25, Youngman) also cover the president's speech.
Arbitration/Mediation
Basilea files arbitration claim against J&J over delays in launching antibiotic drug.
The Wall Street Journal (2/25, B2, Mengewein, Wang) reports, "Basilea Pharmaceutica AG said it filed an arbitration claim against US partner Johnson & Johnson over delays in launching the antibiotic drug ceftobiprole, which have put on hold a potentially vital source of revenue for the tiny Swiss biotech firm and triggered a steep slide in its share price." Switzerland-based "Basilea developed the drug, but J&J was responsible for conducting late-stage trials."
The "Food and Drug Administration has twice delayed approval, most recently saying it wants more audit work done at clinical-investigator sites and answers to questions related to the monitoring done at these sites, where the drug was tested on patients," the AP (2/25, Johnson) adds. On "Monday, J&J's Jansen-Cilag International NV unit said that the Committee for Medicinal Products for Human Use, an advisory panel of the European Medicines Agency, had delayed approval pending completion of what's called a 'good clinical practice inspection.'" A spokesperson for the company said "that mainly involves reviewing records at the European hospitals and other sites where patient testing was conducted." Tuesday, Basilea, "claiming financial damages from the repeated delays, submitted a request for arbitration to the Netherlands Arbitration Institute. A company statement said the arbitration request also involves milestone payments." The Wall Street Journal (2/24, Wang) Health blog also covered the story.
Fraud and Abuse
Novartis unit must pay more than $78 million in damages for overcharging Alabama Medicaid.
Bloomberg News (2/25, O'Reilly) reports, "Novartis AG's Sandoz generic-drugs unit overcharged Alabama's Medicaid health program for medicines and must pay more than $78 million in damages, a jury in Montgomery, Alabama ruled." The jury "found that the company committed fraud and awarded $28.4 million in compensatory and $50 million in punitive damages," according to a lawyer representing the state. "At least 27 states have sued dozens of drugmakers over [Average Wholesale Prices (AWP)] pricing, with Alabama alone having now secured jury verdicts totaling $408 million against Novartis, [GlaxoSmithKline,] and AstraZeneca PLC. Two of the 20 largest US jury verdicts of 2008 were in the Alabama cases over average wholesale prices." The drugmakers "are accused of posting AWP prices that were much higher than what doctors and pharmacists actually paid for drugs. They then 'marketed the spread' to win business by encouraging physicians to seek reimbursement from state Medicaid programs at the full AWP price and pocket the difference, court documents show." The AP (2/25, Johnson) also covers the story.
Health Business
Largest single-year increase in health spending expected in 2009, report says.
In the Wall Street Journal (2/24) Health blog, Jacob Goldstein wrote that, according to a report "put together by Medicare's Office of the Actuary and...published online" in the Feb. 24 edition of Health Affairs, "US health spending is projected to top $2.5 trillion this year." That figure is up "5.5 percent from last year's estimated spending," which is "pretty vigorous, given the overall US economy is projected to shrink slightly this year," Goldstein noted.
The report indicated that "healthcare spending in the United States is expected to have its largest single-year increase in 2009," HealthDay (2/24, Reinberg) added. Andrea Sisko, an economist with the Centers for Medicare and Medicaid Services (CMS), explained that "'private spending is expected to slow...to a 15-year low due to the impact of the recession' as more people lose their jobs." As a result, "public spending growth is expected to accelerate through 2009, in part, due to increased Medicaid enrollment and expenditures," she added. But the estimates "did not take into account the recently enacted $787 billion stimulus package or the 2010 federal budget proposal."
The report also projected that "healthcare will account for 17.6 percent of all the nation's spending in 2009 and one-fifth of the economy by 2018" at a total of $4.4 trillion, MedPage Today (2/24, Walker) noted. In addition, "personal health expenditures" are expected to "increase over the next decade, largely because of cost increases." The report indicates that "prescription drugs will be the fastest-growing component of the Medicare program as more Baby Boomers become eligible for Medicare."
According to Modern Healthcare (2/24, Lubell), however, "growth in spending on hospital care is expected to slow to 5.7 percent in 2009," due in part to "slower private spending growth for hospital care." Carol Steinberg, vice president of trends analysis with the American Hospital Association, noted that hospitals are experiencing "declining access to capital and a drop in the volume of elective procedures." Similarly, "growth spending on physicians...is expected to slow" as private health spending declines with "slower income growth and an expected decline in private health insurance coverage."
Still, "the researchers caution that there are many uncertainties in their projections, such as the length of the economic downturn and potential healthcare reforms that could extend coverage to the uninsured," BusinessWeek (2/24, Arnst) added. In fact, their projections were based "on the assumption that physician payments would be cut 21 percent as required by a federal statue called the Sustainable Growth Rate." But, lawmakers have "overturned that pay cut every year since it went into effect in 2003."
Article discusses possible acquisitions, mergers in the drug industry.
On the front page of its Business Day section, the New York Times (2/25, B1, Singer, Wilson) discusses possible mergers or acquisitions in the pharmaceutical industry. The Times writes that the pharmaceutical companies most frequently mentioned by analysts as possible "targets are Bristol-Myers Squibb and Schering-Plough." Merck "tops many analysts' lists as a potential acquirer." Merck "is...facing patent expirations on top-selling drugs with few promising prospects to replace them." As for "GlaxoSmithKline, Novartis, and Sanofi-Aventis, [they] have enough cash to be in the market for the kind of purchase that would help them restock product lines while reducing expenses through consolidation. But executives at those companies have all said they are not interested in megamergers." Analysts believe "that Eli Lilly and AstraZeneca could be either buyers or sellers." However, "Lilly...is still digesting its $6.5 billion purchase of ImClone five months ago, which may make it unlikely to buy anything else soon." Also, AstraZeneca's CEO "recently told reporters his hands were full cutting the workforce while looking for small acquisitions."
Medtronic announces plans to cut global workforce.
Minnesota's Star Tribune (2/25) reports that "Medtronic Inc. plans to reduce its global workforce in the coming fiscal year, CEO Bill Hawkins said at an employee meeting Tuesday." The company, "which makes pacemakers, diabetes pumps, and devices used in spine surgery, said more details will be provided in May, when the company's new fiscal year begins."
A Medtronic spokesman told Minnesota's Pioneer Press (2/25, Snowbeck) that the company's "goal would be to preserve funds for research and development of new medical devices." The Pioneer Press notes that the announcement comes a day after Medtronic said it would "spend $1.03 billion to acquire two companies that make next-generation heart valves." This shows that, "while the company isn't short on cash these days, it does face sluggish sales growth in its top two divisions -- the...unit for pacemakers and implantable defibrillators and the company's...division for products used in spine surgeries."
Medtronic to join other companies in disclosing payments to doctors. The Wall Street Journal (2/25, B2, Burton) reports that "medical-device maker Medtronic Inc. said it will begin to make public disclosure of all payments over $5,000 it makes to doctors." The company "said it will report the information annually and that the first such disclosure will take place in March 2011 for payments beginning next January."
"The move comes months after two US senators asked the company to disclose more about its consulting arrangements with physicians and cited prior allegations that the company paid surgeons to boost spinal implant sales," the AP (2/25) notes. "Eli Lilly & Co. and Pfizer Inc. have already volunteered to publish such information, and Medtronic said its decision was also voluntary."
Minnesota's Star Tribune (2/25, Moore) adds that "Medtronic and other med-tech companies have long maintained that their relationship with doctors differs greatly from those employed by the drug industry," as physicians often "need training on new devices, or their input is needed to improve products." Critics, however, "have charged that such payments...can influence doctors' practice decisions and are designed to win brand loyalty." The Phoenix Business Journal (2/24, Vomhof) and Minnesota Public Radio (2/24, Wilcoxen) also covered the story.
Medco Health Solutions posts 32 percent rise in 4Q net income.
The Wall Street Journal (2/24, Barris) reported, "Medco Health Solutions Inc. posted a 32 percent rise in fourth-quarter net income on growth of mail-order volume and increased consumer demand for higher-margin generic drugs." Medco "reported net income of $274.4 million, or 54 cents a share, up from $207.6 million, or 38 cents a share, a year earlier. Both periods include five-cent impacts related to its 2003 spinoff from Merck & Co." Medco's "revenue rose 14 percent to $13 billion."
"For the three months ended Dec. 27, 2008, Medco said mail-order prescriptions, which typically deliver a 90-day supply of a drug, increased 9.4 percent to 26.7 million and retail prescription volume edged up one percent to 118.3 million," the AP (2/25, Seaman) adds. Medco's "revenue from the specialty pharmacy business, which provides drugs for chronic and complex ailments, grew 30.6 percent to $2.07 billion."
Tenet Healthcare cuts loss as bad debt grows 23 percent in 4Q.
The AP (2/25, Murphy) reports, "Tenet Healthcare Corp. trimmed its fourth-quarter loss by more than half, but the hospital operator said Tuesday its paying admissions showed little growth in a struggling economy." The company lost $33 million "on $2.2 billion in revenue in the" fourth quarter, compared with a $75 million loss on $2.1 billion in revenue in the fourth quarter of 2007. "Same-hospital paying admissions, which exclude charity care and the uninsured, were essentially flat. But charity and uninsured admissions fell by more than four percent, the company said." Tenet said that bad debt -- "the amount of debt a hospital incurs from treating uninsured or underinsured patients and has been unable to collect" -- "grew 23 percent to $163 million, from $133 million." The company "operates 52 hospitals in 12 states."
Biogen in talks to buy Acorda Therapeutics.
Bloomberg News (2/25, Rapaport) reports, "Biogen Idec Inc. is in talks to buy Acorda Therapeutics Inc. to gain an experimental pill for patients with multiple sclerosis, people familiar with the discussions said." Acorda said on Tuesday that "its 2008 net loss doubled from the previous year and the company is trying to sell marketing rights to Fampridine [4-aminopyridine] to fund operations beyond 2010." The company's Chief Executive Officer Ron Cohen said during a conference call that "the next rational step is exploratory discussions with potential partners." Cohen added: "That does not in any way preclude us from exploring other options." Biogen is racing two other drugmakers "to market the first pill for multiple sclerosis, a disease currently managed by injected medicines that generate $6 billion a year worldwide."
Hospitals and Health Systems
Physicians' group questions University of Chicago's ED reorganization initiative.
The Chicago Tribune (2/25, Japsen) reports that the American Academy of Emergency Medicine (AAEM) "is questioning the reorganization plans for the emergency room at the University of Chicago Medical Center," arguing that the university "is making 'fundamental changes' without the active participation of its own" emergency department (ED) physicians. The university's Urban Health Initiative is "aimed at clearing its [ED] of patients with non-urgent injuries and illnesses by redirecting them to community hospitals and clinics." But, the AAEM is now urging the University of Chicago to "re-evaluate its triage and screening examination policies." In doing so, it joins the American College of Emergency Physicians, which last week "called for a congressional investigation into the U. of C. initiative and whether it violates federal 'patient dumping' laws." For its part, the university maintains that the initiative "is about getting patients the right treatment at the appropriate location in a tough economic climate and that it does not violate the law."
Patient Rights/Quality of Care
North Carolina company accused of bypassing sterilization tests for medical syringes.
The AP (2/24, Baker) reported, "A North Carolina company is accused of bypassing sterilization tests for medical syringes in a cost-cutting move prosecutors say sickened hundreds of patients and led to five deaths." According to US Attorney George Holdings, "federal authorities have launched an international search for the executive charged with rushing shipments of" syringes that "contained Heparin...and saline," from "an AM2PAT Inc. plant." The syringes, which "led to bacterial infections in 200 to 300 patients around the country," were "recalled in December 2007." Prosecutors were provided "details about the plant's operations" from "two former plant workers" who "pleaded guilty for their roles in shipping tainted syringes." Prosecutors claim the plant "cut corners and failed to follow rules for checking sterility." Holdings stated that "investigators believe AM2PAT CEO Dushyant Patel has fled to his native India." He "was indicted last week on 10 charges including fraud, false statements, and selling adulterated medical devices."
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HealthGrades names top 50 hospitals based mortality, complications rates.
Modern Healthcare (2/24, Lubell) reported that "fifty hospitals rated as the best in 2009 by healthcare ratings organization HealthGrades had mortality and complications rates that were 27 percent and eight percent lower, respectively, than all other US hospitals." For its ratings, HealthGrades "analyzed more than 110 million [Centers for Medicare & Medicaid Services (CMS)] hospitalization records from the nation's 5,000 nonfederal hospitals. Patients admitted to these 50 hospitals are less likely to die or suffer major complication than those admitted to other hospitals, according to the findings." The hospitals appearing on the list "had to demonstrate clinical outcomes -- in terms of mortality and complication rates -- that were among the top five percent in the nation across 26 different procedures and conditions and over a minimum of the past six consecutive years."
The Washington Post (2/25, B3, Halsey) notes that "Northern Virginia's largest hospital also is one of the America's best, according to healthcare ratings released [Tuesday] that list Inova Fairfax among the nation's top 50 hospitals." The Post adds, "30 of the top 50 hospitals on HealthGrades' list are concentrated in just four states -- California, Florida, Ohio and Pennsylvania." And, "notably absent were several hospitals -- including Baltimore's Johns Hopkins Hospital -- that appear on most lists of the nation's best."
Ohio's Dayton Daily News (2/25, DeBrosse) reports that Grandview Medical Center in Dayton, Ohio "was named among America's 50 best hospitals in a study of patient outcomes during the past six years by HealthGrades, one of the nation's leading hospital evaluators." The St. Louis Business Journal (2/24) and Wisconsin's Wasau Daily Herald (2/24) also reported on local hospitals making the list.
Pharmaceuticals
Pfizer ends development of late-stage drugs for fibromyalgia, generalized anxiety disorder treatment.
The Wall Street Journal (2/24, Dorman) reported, "Pfizer Inc. has ended development of two late-stage drugs, as part of its previously stated strategy to allocate resources to higher-potential efforts, including pursuing additional uses for its blockbuster fibromyalgia drug Lyrica [pregabalin]." One of the drugs, esreboxetine, "was...developed to treat fibromyalgia and the other [known as PD 332,334] was one for generalized anxiety disorder." Pfizer "will continue to pursue Lyrica as a treatment for generalized anxiety disorder."
According to the AP (2/25, Johnson), "Neither compound had been seen as a likely blockbuster because other drugs to treat those conditions already are on the market." The company "said it reviewed results from the first late-stage study for PD 332,334 and all the data for esreboxetine, 'along with current market dynamics,' before making the decision." Pedro Lichtinger, president and general manager of Pfizer's Primary Care Business Unit, said that "'while confident in the safety of these compounds, we don't believe that they provide significant benefit over other therapies' on the market." The AP notes that "to boost its research productivity, Pfizer last fall narrowed the number of diseases on which it is doing new research and set up units focused on a single therapy area. Each has its own chief scientific officer, who decides which experimental compounds advance into risky and expensive human testing."
In the Wall Street Journal (2/24) Health blog, Sarah Rubenstein wrote that "in announcing the decision, Pfizer made a between-the-lines reference to the increasing pressure from insurers and regulators on the drug industry to pour research resources into products that make a real difference for people's health rather than just add on to crowded categories. The economic-stimulus bill, for instance, offers up $1.1 billion for research comparing drugs and other treatments to each other."
Teva loses bid to lift an order that prevents it from selling a generic version of Evista.
Bloomberg News (2/25, Decker, McQuillen) reports, "Teva Pharmaceutical Industries Ltd. lost its appeals court bid to lift an order that prevents it from selling a copy of Eli Lilly & Co.'s osteoporosis treatment Evista [raloxifene HCl] before a trial starts next month." Last year, Lilly "won a court order that the US Food and Drug Administration can't approve Teva's application to sell raloxifene...until a patent- infringement trial starts March 9."
"The US Court of Appeals for the Federal Circuit said a federal trial judge in Indiana didn't abuse his power when he ruled that Teva couldn't market a generic version...until March," Dow Jones Newswires (2/25, Kendall) adds. Teva "was supposed to be able to start marketing the drug in mid-November 2008. The trial judge said the delay was warranted because Teva had amended the information about the generic formulation of Evista that it was planning to offer."
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