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SNEAK PEAK: DXCM and DVA moved higher with HQY, MDRX, and SYK all moving lower. Further more on DVA - getting past the sale of DMG and a modest rally in the shares, leaves a healthy catalyst calendar from policy, reimbursement, labor cost, and mix pressures through the remainder of the year.
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- Drug Pricing Political Pressure: Another week, another Executive Order. On Friday, President Trump announced he was working on an Executive Order to require most favored nation status in the purchase of drugs. The idea appears to be that "we" - and we presume that is Medicare - would pay no more than the lowest price paid by a nation or company. As this announcement duplicative of other policy efforts, what we suspect is going on is an effort to light a fire under Congress which was unable to deliver a drug pricing package before the July 4 recess. Senate Finance Committee Chairman, Chuck Grassley has expressed concerns about price setting based on international metrics while the House leadership has struggled to balance interests of media-savvy progressives against practical moderates.
- ACA Constitutionality Challenge: The DOJ and several State Attorney Generals will be in New Orleans tomorrow arguing about the Affordable Care Act before a panel of Fifth Circuit Appeals Court judges. The question before the court is whether the demise of the individual mandate makes the entire law invalid. There are also significant questions around who actually had the right to sue in this case.
- Davita Inc (DVA): At a meeting of the American Association of Nephrologists, HHS Secretary Alex Azar and CMMI Director Adam Boehler, the administration offered a new vision of dialysis treatment in the US. According to accounts of Boehler's remarks, HHS has set a goal of 80% of new dialysis starts will be either transplants or on home therapies. The dialysis center would become "an obsolete modality" by 2025. Research suggests home dialysis is better for patients, but penetration in the United States lags the rest of the world.
- Health Care Employment: The BLS report last Friday continues to indicate solid demand compared to the lows of 2017 #ACATaper trough. The year over year change in Health Care employment hit 404,000 jobs in June, which matches the Affordable Care Act peak reached November 2015. Demand for Health Care labor continues to reach new highs as well, likely pressuring wage growth for the remainder of 2019.
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