SCIENCE

Covid-19 vs. Pharma

Covid-19 vs. pharma has been the biggest battle in 2021 and pharma has put up one helluva fight. 

The highly efficacious vaccines have prevented millions of hospitalizations and deaths. Without the scientific innovations that led to vaccines from Pfizer and BioNTech, Moderna, J&J and more, the world would be in a much different place than it is now. Sure, you may ask well, what about omicron? The vaccines and subsequent boosters have so far shielded many of those infected with omicron from severe disease and death (expect even more data on effectiveness to come in the next several weeks). And, while vaccines have prevented severe illness, Pfizer and Merck’s recently-approved antiviral medications treat severe illness. These medications add to the arsenal we have to fight Covid-19. 

Pfizer expects to see significant returns from its vaccines and antiviral treatments. The company predicts vaccine sales to bring in $36 billion in 2021 and $29 billion in 2022. With its antiviral Paxlovid, Pfizer could see an additional $17 billion in revenue. Merck expects between $5 billion and $7 billion in sales for their antiviral pill.

Lastly, it’s essential to recognize that the need for equitable vaccine distribution is still a global concern — and we can’t truly beat Covid-19 unless the whole world is vaccinated.

Biogen’s Alzheimer’s Drug: A Failure

The FDA approved Biogen’s Alzheimer’s disease drug Aduhelm in June. While there was a lot of hype around Aduhelm being the first Alzheimer’s drug approved in 18 years, there was – and still are – a lot of controversies. 

The clinical trial data is shaky. Some trials were stopped because the drug didn’t seem to be helping patients, and another trial raised concern because of the drug’s adverse effects like brain swelling and brain bleeding. Three members of the FDA advisory committee ended up resigning, and hospitals across the U.S. said they won’t carry the drug because of its iffy efficacy. 

Lastly, Biogen originally priced the drug at $56,000 for one year of treatment but recently slashed that price in half after continuous complaints from hospitals (and much of the medical society) that the drug’s high cost was not worth its benefits. So, it seems that the drug is just going downhill. 

POLICY

Roe v Wade On Shaky Grounds

Supreme Court justices heard arguments over a Mississippi law that bans abortion after 15 weeks of pregnancy. This was one of the most pivotal abortion hearings in U.S. history, and it seems likely a majority of the Justices will vote to overturn Roe v Wade.  

The main question argued in the case: are all bans on abortion before viability unconstitutional? 

• Jackson’s Women’s Health Organization argues the Mississippi law violates the precedent set in Roe v Wade, which established a constitutional right to abortion before the age of fetal viability (around 23 weeks) and prevented states from banning abortion. 
• Mississippi — represented by State Health Officer Dr. Thomas Dobbs — argues the precedents set forth in Roe v Wade and Planned Parenthood v Casey are “unprincipled decisions” without a basis in the Constitution. Nowhere in the Constitution, they say, does it mention a right to abortion and “a right to abortion is not a ‘liberty’” (a common argument supporting abortion). 

The majority of Supreme Court justices will likely vote to uphold the Mississippi law, but we won’t know until June 2022.

Price Transparency Rules Fall Short

On the first day of 2021, the Centers for Medicare and Medicaid services’ price transparency rules took effect. These rules required hospitals to provide clear and accessible pricing information online about the items and services they provide. There are two ways hospitals can provide these prices: 

• As a comprehensive machine-readable file with all items and services.
• In a display of shoppable services in a consumer-friendly format.

The penalty for non-compliant hospitals is $300 per day. What’s $300 per day to a hospital, though? Answer that question and you’ll learn why it’s no surprise that 65 of the nation’s 100 largest hospitals are non-compliant with the rules. Additionally, a recent study found that 55% of the 3,500 hospitals sampled were also non-compliant, and compliance was strongly associated with how compliant peer hospitals in the same market were. 

So, CMS will now increase the penalty starting January 1st, 2022, to enforce compliance with the transparency rules. I predict that nothing changes significantly.

HEALTH TECH

Massive Digital Health Funding

There’s perhaps no space more exciting than digital health. Through Q3, we saw record-high fundraising across the digital health space. Companies like Carbon Health, Maven, Unite Us and Cityblock Health each raised $100-plus million. In addition, Medicare Advantage company Devoted Health raised $1.2 billion — WOW. 

Digital health startups serving women+, which includes cisgender, transgender and nonbinary individuals, also made some noise in 2021. The women+ space raised $1.3 billion through August 2021, doubling the $774 million raised in 2020. Some of these companies include Elvie, Modern Fertility and Pill Club. Accounting for 7% of all digital health funding through August 2021, this $1.3 billion highlights the ongoing trend of funding specialized care for women+. 

I expect the rate of digital health funding to slow down a bit in 2022. Either way, digital health is just such an exciting, fast-growing space.

The Ginger and Headspace Merger

Meditation app Headspace and digital mental health platform Ginger merged to form Headspace Health, a new company valued at over $3 billion. 

The merger will make mental healthcare more accessible and affordable, which is quite timely and well-needed. While four in 10 U.S. adults have reported symptoms of anxiety or depressive disorder during the pandemic, there’s still a huge unmet need for mental health professionals. Ginger offers behavioral telehealth services, which perfectly fits the mental telehealth trend we’ve seen in 2021. 

I’m bullish on the digital mental health space.

PUBLIC HEALTH

The Opioid Crisis: A Never-Ending Crisis

Total overdose deaths reached a record high of nearly 97,000 from March 2020 to March 2021. That’s roughly one-fifth of all opioid-related deaths from 1999 to 2019. Social isolation mixed with disrupted access to treatment services likely contributed to the large spike. 

Companies continued to battle lawsuits throughout 2021: 

• McKinsey agreed to pay nearly $600 million to states for its alleged role in helping Purdue Pharma turbocharge its opioid sales, fueling the opioid epidemic. 
• A California judge ruled that Johnson & Johnson and three other opioid makers cannot be held accountable for the opioid crisis. The marketing and promotion of the companies’ pain medications did not cause any public nuisance, the key argument used against opioid companies. 
• Oklahoma’s Supreme Court tossed out J&J’s $465 million opioid lawsuit. In 2019, an Oklahoma District judge ruled that J&J must pay $465 million for its role as a “public nuisance” in the opioid crisis. But, like the ruling in California, Oklahoma’s Supreme Court said, “Oklahoma’s public nuisance law does not extend to the manufacturing, marketing and selling of prescription opioids.” 
• A federal jury found Walgreens, CVS Health and Walmart responsible for fueling the opioid crisis in two Ohio counties on account of — you guessed it — having contributed to a public nuisance by selling and distributing opioid pain medication. The companies will likely appeal this decision. 
• A federal judge overturned a $4.5 billion bankruptcy settlement protecting the Sackler family from future litigation. Purdue Pharma argues this will threaten its ability to provide funds to those suffering from the opioid crisis.

More to come in 2022. 

BUSINESS

CVS Shakes Things Up

CVS announced it would close around 900 stores over the next three years to adapt to its growing number of customers purchasing goods online and beef up its digital solutions and HealthHubs. 

A couple of weeks after the store-closure announcement, CVS Health and Microsoft announced a strategic partnership. CVS wants to use Microsoft’s machine learning technology to leverage all of this data and personalize your healthcare experience ​​”with the right services through the right channels at the right time.” Some examples: 

• Text messages to let you know it’s time for the flu vaccine or Covid-19 booster shot. 
• Preventative health recommendations, like when it’s time to get a mammography or colonoscopy. Or, getting a notification to buy sunscreen if you’re at an increased risk of melanoma (Aetna probably knows your family history). 
• Special pharmacist counseling if you’re prescribed a new drug with weird interactions with other drugs you’re taking. 

Suffice it to say, I’m so excited to see what CVS does in 2022.

Multi-billion Dollar Acquisitions of EHR Companies

Two major electronic health record (EHR) companies posted billion-dollar acquisitions in the home stretch of the year. 

• Bain Capital and Hellman & Friedman will acquire athenahealth for $17 billion. 
• More recently, news came out that Oracle will acquire Cerner Corporation — the second-largest EHR company in the U.S. — for $28 billion.

Both acquirers recognize that healthcare is a fast-growing vertical. The EHR market is projected to reach $47.25 billion by 2027 at a compound annual growth rate of 7.14%. The total addressable market is huge. I do wonder, though, if the leading U.S. EHR company Epic were to be acquired, how much would it sell for?