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VAST DIFFERENCES SEEN IN HOSPITAL BILLING -- U.S. hospitals are charging prices that can be thousands of dollars different for the same medical procedures, even within the same towns, according to federal data released last week. The data from more than 3,000 hospitals that take Medicare, the government's health program for the elderly, showed that in some cases costs can drastically vary for hip replacements, bone fractures and treatments for kidney failure. Three hospitals in and around the Denver suburb of Aurora, CO, charged an average of $97,214, $46,457 and $28,237, respectively, to treat a respiratory infection with complications, one example showed. The U.S. Centers for Medicare and Medicaid Services said it released the data for the first time to make the health system "more affordable and accountable." The information adds to the scrutiny of what patients, insurers and the government pay for medical services as President Barack Obama's 2010 Affordable Care Act aims to extend coverage to 27 million uninsured people. "Hospital pricing is the craziest of crazy quilts," said Ron Pollack, executive director of the Washington-based consumer advocacy group Families USA. "People who wind up paying the highest prices are people who are uninsured and who can least afford bearing this unaffordable burden."
In New York City, the treatment of a hip or pelvis fracture without complications at Lenox Hill Hospital in Manhattan averages $38,588. Fifteen miles away at Coney Island Hospital in Brooklyn, the same procedure was priced at $13,137 on average. The Medicare agency, known as CMS, released the prices for the 100 most frequently billed in-patient services at hospitals, such as kidney and urinary tract infections, pacemaker implantations and chronic obstructive pulmonary disease, which it said comprise 60% of hospital Medicare billings. Treatment of psychoses showed the greatest price discrepancies, with the most expensive hospital charging $144,523, more than 52 times its cheapest peer, according to a Bloomberg analysis of the data. The most common procedure in the data, treatment of simple pneumonia and lung inflammation with complications, had prices ranging from $5,093 to as much as $124,051.
The federal government and states are ramping up to open insurance exchanges beginning on Oct. 1 that will offer coverage to the uninsured, in some cases with federal incentives to help pay for it. About 40% of the people expected to gain insurance under the Affordable Care Act will be covered by Medicaid, the U.S plan for the poor. Republicans have faulted the law for not doing enough to tame rising health costs in the U.S., even as the growth slowed to about 3% a year from 2009 to 2011.
BAXTER DRUG FAILS TO SLOW ALZHEIMER'S IN BIG STUDY -- Baxter International Inc.'s (Deerfield IL) Gammagard failed to help patients with Alzheimer's disease in a late-stage study, adding to a string of failures to develop a treatment for the most common form of dementia. Baxter will halt all studies of the therapy for mild to moderate forms of the disease and reconsider its Alzheimer's program, the company said in a statement. Gammagard, or immunoglobulin, is currently used to replace antibodies in people with immune system disorders. Gammagard is the third experimental Alzheimer's drug to fail in less than a year, leaving Eli Lilly & Co. (Indianapolis IN) as the only company left with a medicine for the disease in the last phase of testing needed for marketing clearance. Lilly's drug, called solanezumab, is being studied in patients with mild Alzheimer's after it failed to show a benefit in more advanced stages. "It is disappointing for the millions of families suffering right now," said Reisa Sperling, director of the Center for Alzheimer's Research and Treatment at Brigham and Women's Hospital, Boston. "In terms of timing, this means we are several years away from getting anything on the market."
Immunoglobulin failed to reduce the cognitive decline or preserve functional abilities in Alzheimer's patients after 18 months of treatment, Baxter said. The full results will be presented in July at the Alzheimer's Association International Conference in Boston. Researchers began to hope the Baxter treatment could provide a benefit in July after it halted progression of the disease for as long as three years in a study of 16 patients. In that study, four patients given the ideal dose at the start of the trial experienced lasting improvement. Five patients initially given a placebo and seven others on varying amounts of Gammagard, experienced no benefit. Baxter closed the week up 51 cents, or 1%, at $70.76. Grifols SA (Barcelona ESP), a company that's also studying immunoglobulin in Alzheimer's, fell 5% to 28.435 euros in Madrid trading, the biggest decline in nine months.
TRACKING WASHINGTON-- House lawmakers will vote this week on another attempt to strike President Barack Obama's signature healthcare law from the books, the third such time the House is expected to pass an outright repeal of the 2010 Affordable Care Act. The bill is likely to be carried in the House with the support of the Republican majority, although there is no chance the Democratic-controlled Senate will take up the legislation. Republicans remain implacably opposed to the healthcare law, more than three years after it was signed into law by Mr. Obama. Many of the law's key provisions come into effect starting in 2014, including the creation of healthcare exchanges to help individuals who don't receive health insurance through work to group together to purchase more affordable insurance. This latest version of the bill is being brought forward in part to force freshman and second-term Democrats to vote against the repeal effort, in effect going on the record defending the law, a senior House GOP aide said. It will also give newer GOP lawmakers the chance to cast a vote against the bill. According to a Democratic count, the House has tried some 36 times to repeal or defund all or part of Obama's landmark healthcare overhaul since it became law in 2010.
In other news, House and Senate Republican leaders told President Barack Obama Thursday that they will refuse to nominate candidates to serve on an advisory board that is to play a role in holding down Medicare costs under the new healthcare act. The 15-member advisory board, known as IPAB, would have the power to force payment cuts on insurers, drug companies and other service providers if Medicare costs rise beyond certain levels. The healthcare law explicitly forbids the board from rationing care, shifting costs to seniors or cutting their benefits, but Republicans have insisted that it will be a vehicle to deny care to seniors. House Speaker John Boehner and Senate Republican leader Mitch McConnell said in their letter to Obama that reduced payments "will force providers to stop seeing Medicare patients" and "this will lead to access problems, waiting lists and denied care for seniors." Boehner, at a news conference Thursday, said this "is a board with 15 unelected, unaccountable individuals who have the authority to deny seniors access to care. The American people don't want the federal government making decisions that doctors and patients should be making."
FDA/EMA ROUNDUP-- GlaxoSmithKline Plc (London) and Theravance Inc. (S. San Francisco) won approval of their once-daily drug Breo Ellipta to treat a lung disorder that is the third-leading cause of death. The Food and Drug Administration cleared the dry powder inhaler to treat exacerbations of chronic obstructive pulmonary disease, or COPD, and airflow obstruction. COPD, often caused by cigarette smoking, is an umbrella term for emphysema and chronic bronchitis. Breo may generate $4 billion in worldwide peak sales, translating to $500 million in royalties for Theravance, M. Ian Somaiya, a senior research analyst with Piper Jaffray & Co., said. The once-a-day Breo will compete with twice-daily products, including Glaxo Plc's Advair and AstraZeneca Plc's Symbicort. Theravance closed the week up $1.07, or 3%, at $34.94. Glaxo gained 22 pence, or 1%, to 1,670 pence in London.
Elsewhere, Johnson & Johnson (New Brunswick NJ) won approval of its Sedasys device, which sedates patients for certain medical tests without the need for an anesthesiologist. The Sedasys system mildly sedates patients having tests such as a colonoscopy, using propofol, a drug whose label requires administration by an anesthesiologist. Typically, doctors who perform these procedures without anesthesiologists use a sedative other than propofol. But many doctors prefer propofol rather than other sedatives because it has a short duration of action and typically allows patients to wake up and recover faster. Sedasys aims to take anesthesiologists out of the process when using propofol. J&J said Friday the device would become available next year.
Medtronic Inc. (Minneapolis MN) won approval for its Viva device used to resynchronize the beating of the heart and reduce hospitalizations for heart failure. The permanently implanted device uses an algorithm to coordinate the heart's 100,000 contractions each day, adjusting to varying demands of the body as the user goes through regular daily activities. The sophisticated system removes the need for doctors to recalibrate the device at regular visits and improves the battery life by 25% compared with older models, Medtronic said in a statement. Significantly more heart-failure patients responded to treatment and they were 21% less likely to be hospitalized in the first year than those with older devices, said David Steinhaus, Medtronic's medical director for cardiac rhythm disease management.
Novartis AG (Basel CHE) received approval for its drug Ilaris to treat a serious form of childhood arthritis. Ilaris inhibits interleukin-1 beta, excessive production of which plays a prominent role in certain inflammatory diseases, the company said. The drug is the only approved treatment specifically for the condition that can be given as a monthly subcutaneous injection, Novartis said. Ilaris is also approved in the European Union for the treatment of refractory gouty arthritis, Novartis said.
Cubist Pharmaceuticals Inc. (Lexington MA) received fast-track status for an experimental antibiotic regimen as a treatment for three types of infections. The company is studying a combination of ceftolozane and tazobactam as a treatment of hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia as well as complicated urinary-tract infections. In February, the FDA granted fast-track status for the drug regimen as a treatment for complicated intra-abdominal infections. Fast-track status gives companies extra meetings and correspondence with regulators throughout the review process, and it allows the drugmaker to submit data as it compiles it. The company's shares closed the week up 83 cents, or 2%, at $48.00.
In other news, the FDA warned doctors and pharmacists to avoid drugs made by a Florida specialty pharmacy called The Compounding Shop (St. Petersburg FL), due to potential safety problems uncovered by health inspectors. The pharmacy has agreed to recall all of its sterile drugs and is in the process of notifying customers, the FDA said in a statement. The agency said healthcare professionals should quarantine drugs from the company and not administer them to patients. The Compounding Shop is a compounding pharmacy, which means it mixes custom formulations of drugs to meet doctors' specifications. In recent weeks the FDA has cracked down on compounding pharmacies across the country, triggering several national recalls. The wave of inspections comes in the wake of a nationwide fungal meningitis outbreak last year tied to contaminated drugs from a Massachusetts pharmacy. The outbreak sickened more than 700 Americans and killed more than 50 others.
The FDA issued a warning to doctors and women of child-bearing age that half-a-dozen medications used to treat migraine headaches can decrease children's intelligence if taken while their mothers are pregnant. The agency said the drugs, including Depakote and Depacon, should never be taken by pregnant women for the prevention of migraine headaches. The pills, which all contain the ingredient valproate sodium, already carry a boxed warning about the risk of birth defects. But the FDA said it is adding new warnings to the drugs after a study showed they decreased IQ scores in children whose mothers took them while pregnant.
Endo Health Solutions Inc. (Malvern PA) lost an effort to stop U.S. sales of generic versions of its extended-release painkiller that don't have tamper-resistant qualities. The FDA's decision Friday means generic versions of Endo's older Opana ER without abuse-deterrent technology will remain on the market. Endo sought a determination from the FDA that the original Opana ER was taken off the market for safety reasons, a determination that would have meant less competition for its newer version. The FDA declined to do so and instead criticized properties of the new Opana ER that were supposed to make the drug resistant to injection and snorting. Endo closed the week off $2.61, or 7%, at $34.97. Impax Laboratories Inc. (Hayward CA), the maker of a generic version of Opana ER, closed the week up 40 cents, or 2%, at $17.40 on the news.
And a federal judge rejected as "frivolous" a government request to delay the effect of his order giving girls including those 16 and younger access to the so-called morning after-pill without a prescription. U.S. District Judge Edward R. Korman in Brooklyn, NY, refused to put the ruling on hold while the government appeals his decision that the emergency contraceptive doesn't require a prescription. He gave officials until May 13 to seek a delay from the U.S. Court of Appeals in New York. "Significantly, defendants do not take any issue with any of my substantive conclusions," Korman wrote. "In my view, the defendants' appeal is frivolous and is taken for the purpose of delay." The FDA in December 2011 was set to approve sales of Teva Pharmaceutical Industries Ltd.'s (Petach Tikva ISR) Plan B One-Step, a branded version of the pill, without a prescription. Health and Human Services Secretary Kathleen Sebelius overruled the action, marking the first time an FDA decision was reversed by a presidential administration. F. Franklin Amanat, a government lawyer, said the Justice Department is evaluating its next steps.
MEDICAL STOCK SPOTLIGHT-- Affymax Inc. (Nasdaq) led advancing issues, soaring 68% over the week to $1.36--continuing its recent momentum. There was no meaningful news on the stock. However, an article out last Tuesday on SeekingAlpha suggested that Affymax could be the best reversal play for 2013. This article may have sparked the rally. In 2012, Palo Alto, CA-based Affymax was a favorite and top performing biotech stock. The company had in its pipeline a new drug that was supposed to break the huge multi-billion dollar monopoly that Amgen Inc. has in the chronic kidney disease market with its drug Epogen. Affymax knew there were risks associated with this new drug back in the summer of 2012, however it was still approved by the Food and Drug Administration. The stock shot from $6.25 in January 2012 to over $27.00 in September. SeekingAlpha termed Affymax "a high risk lottery play."
Elsewhere, Vermillion Inc. (Nasdaq) rocketed 66% to $2.37 after announcing a $13.2 million equity financing deal on Thursday morning. The Austin, TX-based company will issue 8 million common shares. Upon the closing of the transaction, Vermillion will be issuing the investors 12.5 million warrants with a strike price of $1.46. Vermillion is engaged in the discovery, development and commercialization of diagnostic tests intended to help guide physicians' decisions regarding patient treatment. Vermillion concentrates its development of diagnostic tests in the fields of oncology, cardiology and women's health, with the initial focus on ovarian cancer.
And Alexza Pharmaceuticals Inc. (Nasdaq) jumped 12% to $4.91 after the company said Teva Pharmaceutical Industries Ltd., one of the world's largest drug companies, will market is agitation drug Adasuve in the U.S. The companies said Teva will be responsible for all U.S. commercial and clinical-related activities, including an FDA-required, post-approval study. Teva will also have the right to study the drug as a treatment for other neurological disorders. Mountain View, CA-based Alexza will manufacture the drug and supply it to Teva. The Israeli company will pay Alexza $40 million upfront and it could make another $195 million in milestone payments.
But LipoScience Inc. (Nasdaq) plunged $2.37, or 27%, to $6.50 after reporting total revenue of $13.6 million for the first quarter ended March 31, 2013, a decline of 1.2% compared to the first quarter of 2012. Net loss was $2.8 million, compared with income of $1.3 million last year. Raleigh, NC-based LipoScience is a vitro diagnostic company. The company's first diagnostic test, the nuclear magnetic resonance LipoProfile test, directly measures the number of low density lipoprotein particles in a blood sample and provides physicians and patients with information to manage the risk of heart disease. As of January 25, 2013, over eight million NMR LipoProfile tests were ordered.
Cutera Inc. (Nasdaq) tumbled $2.14, or 18%, to $9.60 after reporting 1Q earnings per share of ($0.15), $0.03 worse than analysts' estimates of ($0.12). Revenue for the quarter came in at $16 million versus the consensus estimate of $18.29 million. Brisbane, CA-based Cutera is a medical device company engaged in the design, development, manufacture, marketing and servicing of laser and light-based aesthetics systems for medical practitioners worldwide. The company offers products based on six platforms, which include CoolGlide, Xeo, Solera, GenesisPlus, Excel V, and myQ.
And Takeda Pharmaceutical Co., Asia's largest drugmaker, fell the most in more than four years in Tokyo trading after full-year operating profit missed its own forecast and analysts' estimates. Takeda slid 7% to 4,985 yen. Operating profit, sales minus cost of goods sold and administrative expenses, for the year ended March 31 plunged 54% from a year earlier to 122.5 billion yen ($1.2 billion) due to a cost increase, Osaka-based Takeda said. That compared with the company's forecast of 160 billion yen in February and the 171.3 billion yen estimate of 17 analysts compiled by Bloomberg. Expenses from overseas operations increased more than expected in the fourth quarter as corporate management failed to understand the spending trend by the operational side, CEO Yasuchika Hasegawa said.
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