We hope everyone had a wonderful holiday filled with friends, family, and fun! We return now to the world of healthcare innovation where new developments are occurring throughout the industry. In this week’s Innovation Partners BioBlog, we look at the continuing saga of HHS cutting 340B payments and shifts in ObamaCare. Enrollment in ObamaCare continues to decline, possibly due to low unemployment rates. Cigna closed its ExpressScripts deal, and new mergers in oncology care in Ohio and nonprofit healthcare in California underscore the shift towards consolidation in healthcare insurance and services. This and more are our top stories for the week.
Federal judge says HHS overstepped authority in cutting 340B payments
District Judge Rudolph Contreras from the District of Columbia has issued an injunction on the final rule in cutting 340B payments, as requested by the American Hospital Association, the Association of American Medical Colleges and America’s Essential Hospitals. Judge Contreras ruled that the Department of Health and Human Services overstepped its bounds by cutting funding. Program changes last year cut up to 6% more than the average sales price for a drug to 22.5% less than the average sales price of a drug, slashing $1.6 billion in payments.
Dignity Health, CHI delay merger closing until January
Dignity Health and Catholic Health Initiatives have decided to delay their merger until sometime in January, according to a statement released by Dignity. Both groups passed their own regulatory hurdles including approval from the California Attorney General and the Vatican to form the union. The new group will be called CommonSpirit and will be the largest nonprofit health system in the country by revenue, serving 21 states with 139 hospitals and a total of 700 sites of care.
ASCO, ESMO Publish Joint Assessment of Their Value Frameworks
The American Society of Clinical Oncology (ASCO) and the European Society for Medical Oncology (ESMO) today published a joint analysis comparing the results of both organizations’ value frameworks in ASCO’s Journal of Clinical Oncology(JCO). The analysis found that the frameworks produce comparable measures of the clinical benefits of new therapies in approximately two-thirds of the more than 100 treatment comparisons that were examined. It also identified a number of factors that may contribute to discordant scores, revealing potential ways for both organizations to refine their frameworks in the future.
Warren bill would get feds into generic drug manufacturing
Senator Elizabeth Warren (D-Mass) has introduced a bill that would create a government-run pharmaceutical manufacturing arm to mass-produce generic drugs. Warren’s bill has been dubbed the Affordable Drug Manufacturing Act and although it is unlikely to pass the Senate, it signals a commitment and a new tactic to attacking the rising cost of drugs. Warren is a potential 2020 presidential candidate. Other senators considering presidential bids are also introducing their own legislation to tackle the high cost of pharmaceutical drugs.
ObamaCare enrollment drops for second year in a row under Trump
For the second year in a row, enrollment in ObamaCare plans has dropped, according to new numbers released this past week. A total of 8.45 million people signed up for plans on healthcare.gov before the end of enrollment period on December 15, compared to 8.8 million people who signed up last year. This reflects a drop of approximately 4%. Low unemployment rates may be the reason for the lower numbers given that many people receive healthcare benefits through their employers.
If ACA Falls, Some Health Insurers’ Earnings Will Take a Big Hit
What will happen if the ACA is completely struck down? That’s the gist of this piece from AIS Health, which examines the legal labyrinth that the ACA has taken over the past year. Most recently, a judge rules the entire law unconstitutional after the tax penalty associated with the individual mandate was struck down. Health insurers might face lower revenues and lost business, for example. Most experts feel that the legal challenges to the ACA will ultimately fail but only time will tell.
FDA Approves New Drug Regimen for Acute Lymphoblastic Leukemia
The FDA approved Asparlas (calaspargase pegol-mknl), an asparagine specific enzyme, as a component of a chemotherapy regimen to treat adult and pediatric patients with acute lymphoblastic leukemia (ALL). The approval allows a longer interval between doses compared to other pegaspargase products. Asparlas was evaluated when it was given in combination with a multiagent chemotherapy in 124 patients with B-cell lineage ALL.
CMS finalizes ACO overhaul, shortening pathway for financial risk.
The Centers for Medicare & Medicaid Services (CMS) finalized substantial changes to the Medicare Shared Savings Program (MSSP). These changes will shorten the time that Accountable Care Organizations can remain in one-sided risk models. The new program, called “Pathways to Success,” now states that new “low-revenue” or physician-led ACOs will have three years to remain in a one-sided risk model, reduced from six. All other new ACOs will have two years, and existing one-sided ACOs will have on year to take on additional financial risk.
Cigna closes $67B Express Scripts acquisition, promising affordability and choice
Cigna officially closed the $67 billion Express Scripts acquisitions, giving Cigna increased leverage in the pharmacy benefits management market. The acquisition puts Cigna on par with CVS, UnitedHealth and Humana and Anthem, all of which conducted their own integrations to add to their stores of products and services.
The American Oncology Network, LLC Welcomes Zangmeister Cancer Center in Ohio
The American Oncology Network, LLC., announced a new partnership with Zangmeister Cancer Center in Ohio. The partnership enables the organization to better serve their patients with enhanced technology, an expanded oral oncolytic outpatient pharmacy, pathology and central laboratory services, and enhanced care management services.