Takeaway: With Congress back and the political season moving to simmer; things were hoping; HCA, PFE, MRNA, ENSG

Dose | Health Policy Week in Review; PPI, Florida Agitates Against mRNA Vaccines; SNF Oversight - 2022.02.17 Dose

Top of the Funnel | Macro + Earnings

PPI.  ((HCA (+), THC (+), SGRY (+)) Based on earnings commentary, client inbounds and the emergence of high quality research on vaccine-related adverse events associated with the unprecedented scale of the COVID-19 response, excess mortality is once again back in focus.

Tom Tobin’s noted in his morning note on Tuesday that cancer screenings are back to 2019 levels. Between now and then PPI for treatment of neoplasms has been exhibited unusual patterns as compared to pre-pandemic levels. YoY% change took off in early 2020, retraced throughout 2021 and largely returned to normal in 2022 until 4Q. YoY % change in PPI was 6.0% in January, not as bad as early 2021 but still historically high.

Related, death from Malignant Neoplasms clocked in at 3% above 2014-19 baseline at the end of 2022. While such a variance is not unheard of, the persistence of these levels is unusual.  Reduced screenings are no doubt one factor driving this dismal trends.

Earnings. SCI. The company reported QoQ% increases in At Need and Matured Pre-Need funerals but decreases as compared to the prior year.  However, funeral volumes are about 15% above 2019 levels.

Notably, the company called out COVID deaths and excess mortality separately, recognizing the decoupling of those mortality trends we have noted in our data.


Moderna for Free! ((MRNA (-), PFE (-), BNTX (-)) After Moderna CEO Stephane Bancel offered to come before the Senate HELP committee and justify his plans to increase the price of MRNA’s Covid vaccine 4X, the company decided that it would continue to make its vaccine available at no cost in the U.S.

I mean why not? Inventories must be huge. The move also buys some good will with the White House. It does put a bit of a turd in Albert Bourla’s punchbowl. He will argue that PFE did not take money from Operation Warp Speed – although a guaranteed purchase and some help with logistics and manufacturing courtesy of the United States Government wasn’t nothing. In the end, though, he is going to have to match the price.

You thought PPI was Bad. The Congressional Budget Office released its annual budget outlook this week with some bad but, to us, not surprising news. The nonpartisan analysis does not expect inflation to drop to the Federal Reserve’s target rate of 2% until 2026.

Last spring, the CBO has estimated the 2% target would be reached sometime after 2024. Unless Congress gets their Paul Volker on, it won’t happen in 2027 either. Monetary policy is worthless when Congress keeps creating money through large spending bills.

It is a sobering read.


SNF Oversight. (ENSG (+)) CMS issued a proposed rule requiring more detailed disclosure of nursing home ownership. According to some studies, there is a relationship between nursing facilities owned by private equity and REITS and poor patient outcomes.

Notwithstanding the possible connection between outcomes and ownership, this regulatory line of inquiry is unique. Generally, the government does not – arguably cannot – regulate based on ownership structure. It is difficult to see where they are going except to highlight the possible connection between for-profit ownership and patient care for the benefit of Medicare beneficiaries.

Drug Pricing Models. Not to be outdone by Congress, SecHHS, Xavier Becerra announced plans for three new drug pricing models through the CMS Innovation Center. The models include:

  • Accelerated Approval Drug Model will test, on a mandatory basis, whether adjusting payment under Part B will encourage drug manufacturers to complete confirmatory trials on a timely basis. That is how far gone the enforcement apparatus is but I suppose it is better than nothing.
  • Generic Drug Model would allow Part D sponsors to offer a list of about 150 generic drugs for common conditions for $2/mo.
  • Cell and Gene Therapy Model would test alternative financing approaches that would mitigate the cost of one-time therapies under the Medicaid drug benefit.

The models need to be developed and proposed so much more to come.

Pause on No Surprises. After a Texas court tossed the rules governing Independent Dispute Resolution under the No Surprises Act – which was not much of a surprise at all – CMS has put a hold on IDR payment determinations.

The Texas Medical Association had argued that the final No Surprises Act rule violated the Administrative Procedures Act and conflicted with Congressional intent. The court agreed.

Other Stuff.

Florida’s Vaccine Saber Rattling.  (PFE (-), MRNA (-), BNTX (-)) The Florida Surgeon General, Joseph Ladapo sent a letter to the FDA and CDC asking them to provide greater transparency to all Americans on possible risks of COVID vaccines.

He followed that move with an advisory to Florida providers warning them of higher than normal adverse events from mRNA vaccines and citing the lack of transparency from the federal health agencies.

Dr. Ladapo, on Twitter, batted away the arguments about that whole causation/correlation thing, noting that common sense argues for caution. Florida, according to the Surgeon General, has witnessed a 1,700% increase in adverse event reporting after COVID-19 shots, much higher than following other vaccination campaigns.

PFE – Sloppy as Ever. Endpoints reported that PFE and its partner, Valneva, released about ½ of the 7,000 study participants in a PIII trial to test a multivalent recombinant protein vaccine for Lyme Disease. The release of the study subjects came as a result of the trial site manager’s failure to observe Good Clinical Practice Rules.

One would think that, facing high levels of scrutiny world-wide, PFE would be a little more careful in their selection of CROs

Meanwhile, MRNA’s efforts to leverage their mRNA technology into other, perhaps less controversial products, had a bad week. Results from its PIII trials for mRNA 1010 for flue was found to be at least effective against GSK’s Fluarix Tetra for flu A but did not meet non-inferiority endpoint for flu B. The safety profile, as you might have already guessed is not as favorable either.

But hey, when all you have is an atom bomb, everything looks like Hiroshima.

Recent Events

Venture View with Marcus Whitney: The Promise of Artificial Intelligence in Health Care. Replay here

Upcoming Events.

CNC | Overcoming Medicaid Disenrollment March 1, 2023 @10 am ET

Have a great weekend.

Emily Evans
Managing Director – Health Policy