(Note: I left the replay link out of the CNC recap note on Wednesday. Here is the link to note and here is link to replay. I apologize for the inconvenience.)
Top of the Funnel: Macro + Earnings
Silicon Valley Bank and Impact on Venture Investing. Marcus Whitney of Jumpstart health Investors joined us in the studio this week to talk about the implications of SVB to venture capital at the macro level. The banks concentration of risk among GPs, LPs, portfolio companies in the health care, life sciences and tech sectors will have funds adding banking relationships to the due diligence checklist. Other key points Marcus made is the imperative to have a disciplined process that can arrive at some conclusion about price.
For my part, I wonder if biotech has been so overfunded that venture debt became a thing means the next few years are going to be more than tough for the sector.
Link to replay here.
PPI. Producer price index for General Medical & Surgical Hospitals rose 0.03% MoM and 2.5% YoY. In other words, typical inflation for health care even in the face of higher labor and supply costs persists. We are chalking this up to unrenewed payer contracts which can only last so long.
CONGRESS.
Vaccine Oversight. The House Select Subcommittee on the Coronavirus Pandemic is zeroing on approval of COVID-19 booster doses. Recall that Dr. Philip Krause and Dr. Marion Gruber, longstanding leadership on vaccine approval at the Food & Drug Administration, resigned over what contemporaneous emails suggest was a rushed approval process in summer 2021.
The Committee is requesting documents and transcribed interviews with Dr. Gruber and Dr. Krause, as well as Dr. Janet Woodcock, Principal Deputy Commissioner and Dr. Peter Marks, Director, Center for Biologics Evaluation and Research.
The strategy appears to be focused on boosters rather than the original series rolled out in spring 2020. The approach is designed to navigate the “anti-vax” criticism by focusing just on courses subsequent to the original series.
THE WHITE HOUSE.
A War of Words. Dr. Robert Califf and Dr. Rochelle Walensky responded to recent letter from Dr. Joseph Ladapo, the Surgeon General of Florida, asking for more information on the safety and efficacy of COVID-19 vaccines.
The FDA/CDC response is in line with what they have repeated many times before about the approval process, research findings, etc. They do not directly address Dr. Ladapo’s concern about the explosion of VAERS reports after the roll-out of the COVID-19 vaccines as compared to other vaccine campaigns.
This issue, as we say in politics is “hard.” Few minds are going to be changed in the press and elsewhere but the public’s opinion, as expressed by vaccine administration is pretty clearly in Dr. Ladapo’s camp.
FDA Adcomm on Paxlovid. The votes was a thumbs up but there is clear concern about rebound and side effects. The adcomm also pointed out the lack of interest from prescribing doctors. I suppose buying SGEN is meant to fix the intractable apathy amongst the public and medical community on all things COVID which makes this decision pretty anti-climatic.
Drug Negotiation Guidance. CMS rolled out guidance on the drug price negotiation program. Highlights include:
- Drugs will be selected based on data collected on total expenditures between June 2022 and May 2023.
- In developing its initial offer, CMS will consider therapeutic alternatives.
- CMS will use as a starting point the net price paid under Part D or the ASP paid under Part B of a therapeutic alternative.
- Clinical benefit when compared to the therapeutic alternative will be evaluated.
CMS is also allowed to consider other factors presented by the industry.
Inflation Adjusted Drug Prices. CMS released its list of drugs subject to inflation rebates and reduced cost sharing. See note field to right to identify drugs here.
Drug Shortages. Drug shortages happen with some regularity in a globally connected world. This week, shortages of certain cancer drugs caught my eye.
It could be because excess mortality from cancer has been persistently high. The producer price index for Neoplasms has been moving up and to the right since early 2021.
We do not know the cause (but you would think the CDC would be alarmed enough to investigate by now) and it could all just be unrelated influences. It could also mean we have a sicker population post-COVID that needs more care, including more drugs.
Other Stuff.
German Health Minister Changes Course. While vaccine injury – something that is not new at all and entirely expected especially if 90% of your population has been inoculated – is nearly verboten in US legacy media. In alternative media, reporting has been at times bizarre.
In Germany, it is appears to be an accepted problem with the German Health Minister, Kurt Lauterbach, acknowledging more needs to be done to diagnose injuries and provide compensation. He does not, we hasten to say, believe BNTX or PFE are financially responsibility. The German states or federal government, presumably, will provide some compensation at some point.
Medicare Trust Fund. As part of developing a baseline, the HHS Office of the Actuary now estimates the insolvency date for the Medicare Trust Fund as 2032, up from 2028. We await the Trustees report for more explanation but part of it is going to have to be excess mortality.
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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