December 15, 2009
The Healthcare Channel http://thehcc.tv/
2009 had some of the biggest healthcare stories in modern times. We took a stab at selecting the top stories for the year in healthcare business and policy. It was not the best of years, to say the least. Most of the stories were negative, but the biggest stories in the top five were positive. Enjoy.
#16 Head injury in American football: After years of denial, college and pro football leaders are coming to acknowledge that long-term brain injury is a significant problem for the sport. As The HCC first wrote in an Op-Ed, there are discussions of radically changing the rules of the game to prevent running backs from dipping their head, etc. Players are no longer allowed to resume playing after a concussion until their brains have properly healed which takes weeks. This places team benefit at odds with player safety. Bryant Gumbel pioneered this story on his HBO show Real Sport.
Aside, Mr. Gumbel revealed that he has lung cancer. We wish him good luck. Hopefully, the industry events mentioned below will help patients battle cancer and other disease more effectively.
#15 Spine surgery troubles: In 2009, the spine surgery industry was plagued by scandal and negative medical literature which all acted to slow growth. Medtronic’s kyphoplasty revenue shrank after key vertebroplasty papers were published in the NEJM showing that the procedure offered little benefit. The HCC interviewed the author months before the bad results impacted Medtronic.
The Walter Reed InFuse study also hurt spine and Medtronic as Dr. Kuklo reportedly falsified data for a Medtronic trial. All of this led to the dreaded attention of the Senate Finance Committee that the cardiology and psychiatry community have endured.
The HCC was the first to warn of the spine market woes back in May with the article “Big changes for ortho and spine on the way”. The third-quarter Medtronic earnings call confirmed that the negative events took a toll on revenue. Expect more negatives to the market to unfold. Stay tuned.
#14 Amgen denosumab delays: Amgen is still one of the most important companies of the biotech sector despite the changes to its core epo franchise. Much of the value of the company now depends on hope for its new potential blockbuster, denosumab, to treat osteoporosis and bone issues related to cancer. Those plans were dealt several setbacks this year when the FDA delayed approval of denosumab and required further studies for some of the indications. Prior to the delays, The HCC interviewed the two authors of the key NEJM publications this year.
#13 Genzyme’s FDA woes: 2009 was a very bad year for Genzyme as they were placed in the figurative “FDA doghouse” after multiple violations were found at the Allston plant and their Lumizyme drug application was deemed inadequate. All of this opened the door for competitors Shire and Protalix to accelerate their drugs with the FDA. The HCC interviewed former FDA biologics plant inspector John Godshalk who was appropriately pessimistic about Genzyme’s ability to quickly resolve matters.
#12 Crestor JUPITER trial: With generic statins eating into the sales of Lipitor, Crestor, etc, AstraZeneca needed the JUPITER trial to create a new reason for taking statins: to lower C-reactive protein. However, whether targeting CRP results in clinical benefit is quite uncertain, and the early stoppage of JUPITER and other flaws in design made the results quite controversial. The FDA is set to discuss whether to approve the first indication for a statin to be used in normal cholesterol levels. The HCC interviewed Dr. Guyatt about the JUPITER trial.
#11 Percutaneous heart valves: As other traditional medical device markets such as stents, ICDs and spine slow down, one of the emerging new areas of growth is structural heart disease treated by catheter intervention rather than open chest surgery. The HCC featured several stories on percutaneous heart valves and exclusive interviews with the Edwards and Medtronic program leaders.
#10 Avastin failed in the adjuvant setting: The biggest hope for expanding the market for Avastin was the C08 trial that looked at using Avastin in early stage colon cancer after surgical resection (i.e. the adjuvant setting). The study failed as The HCC predicted. With the assimilation of standalone Genentech by Roche, this topic was no longer of much concern to biotech analysts and received less attention. Aside, Roche withdrew from the pharmaceutical group PhRMA and wants to be known as a biotech company now.
#9 Effient (prasugrel) FDA scandals and the poor launch: Starting as an HCC exclusive in February, “FDA Director of New Drugs speaks with The HCC about the prasugrel panel”, the prasugrel advisory committee became a major scandal after it was revealed that Dr. Kaul was disinvited from the roster when Eli Lilly requested he be removed. The PDUFA date was missed twice, as The HCC warned viewers, and the final approval came with onerous black box warnings on bleeding risk and a limited patient population.
#8 FDA overhaul: A new crew took over the FDA when Dr. Hamburg and Dr. Sharfstein were appointed by the incoming Obama administration. Addressing many of the controversies of the Bush FDA, the new sheriff in town began to clamp down on industry biases within the agency that led to some dubious drug and device approvals. The plant inspection process requires faster replies from industry, and the promise to make the FDA more transparent was kept (e.g. publication of the Genzyme warning letter). The HCC interviewed Dr. Sharfstein on these matters.
#7 Senator Grassley and Finance Committee Oversight: For the second year, Senator Grassley’s oversight efforts have made a big impact on the way certain specialties practice. Spine surgery was the newest target this year. Interventional cardiology and psychiatry were victims in 2008. The transparency into industry funding of these groups has translated into major changes in medical meetings and trade shows like the TCT, weakened pricing power for the ortho and spine companies, and has altered the way medical journals operate. The Physician Sunshine Payment Act will be enacted if the Senate healthcare reform bill becomes law. The HCC has been the best source for exclusive stories on these oversight matters.
#6 Cancer risk from medical imaging radiation: In 2009, several respected journal publications hammered home the concept that CT scans and other medical imaging cause thousands of cancers each year. To make the story more horrific, doctors at Cedars Sinai were found to have manually overridden systems to deliver ten-times the safe dose to hundreds of patients. Other medical centers likely made the same mistakes. The HCC was the first to report on this safety concern in 2007, and more recently in an interview with one of the journal authors.
#5 Mammography screening controversy and comparative effectiveness: The AHRQ, a relatively obscure division of The HHS, and its subdivision, the Preventive Services Task Force, made one of the biggest bureaucratic bungles in the history of The HHS by releasing controversial new guidelines to cut back on the number of routine mammography screenings. As mentioned in an Op-Ed Who are bureaucrats behind the mammogram gaffe?, the timing could not have been worse coming during the Senate healthcare reform debate and giving fuel to critics who say that rationing of healthcare will occur if the government takes over. This is all part of a bigger movement to compare the effectiveness of treatments and make resource allocation decisions based on head-to-head comparisons of therapies.
Comparative Effectiveness (CE) was funded in a small way as part of the job stimulus package in 2009. CE poses a threat to the current paradigm of marketing drugs and devices. This will be one of the bigger stories to follow in 2010. The HCC interviewed Sir Michael Rawlins, Chairman of the UK’s CE organization called NICE, and others, during the healthcare reform summit in May. This is still worth watching if you missed it.
#4 Recovery of the stock markets: The dramatic recovery of the stock markets has allowed for the stabilization of the capital markets. Small-cap healthcare companies are no longer liquidating. However, the IPO market is still not quite open for business. Healthcare investment funds are recovering and digging out of the holes from 2008. 2010 might be a fresh start as trillions in cash on the sidelines needs investment vehicles.
#3 Mergers and Acquisitions: 2009 was the biggest year ever for healthcare M&A. Pfizer bought Wyeth. Merck bought Schering Plough. Roche bought Genentech, and the list goes on. The consolidation resulted in massive job cuts and the Wall Street analysts have fewer names to cover. That is about all that was accomplished. Few of the mergers resulted in companies with better growth or better competency at creating drugs in-house.
#2 Swine flu and botched vaccines: Swine flu dominated the news in 2009. The disease turned out to be fairly benign in most people as it became widespread. The latest CDC estimates are that 50 Million people have contracted the disease in the US killing 10,000. The HHS mishandled production of the H1N1 vaccine and supplies were a fraction of what the CDC estimated. The HCC was the first on national TV in April to discuss the important trends to follow (i.e. death rates were more important than geographic spread, etc).
#1 Healthcare reform: The highly dynamic process of passing healthcare reform in the House and the ongoing debate in the Senate have been the biggest stories of the year by far and promise to carry over into 2010. At the time of this publication, the Senate bill has stalled once again.
If a bill passes, the impact to industry should be less severe than expected. Any form of a “public option” seems untenable to key Senators. Also, the drug industry has successfully dodged the feared provision that would have allowed Medicare to negotiate for drug prices.
Those were the big events of 2009. 2010 should be a better year as the cloud of healthcare reform uncertainty lifts and the economy improves. Have a happy new year.