Top Stories in Business & Health for June 19, 2017
Cleveland Clinic partners with Oscar
Cleveland Clinic is stepping into the health insurance market by joining forces with New York City-based Oscar Insurance Corp. Pending regulatory approval, the two organizations will jointly offer individual Cleveland Clinic|Oscar health plans during open enrollment this fall in five northeast Ohio counties, on and off Ohio’s Affordable Care Act (ACA) exchange, for coverage effective Jan. 1. Each plan member will have access to a team of providers comprising a Cleveland Clinic primary care physician, care managers, an Oscar Concierge nurse and care guides, along with 24/7 access to telemedicine. Depending on how this initial venture goes, expansion into other geographic areas and insurance segments is a possibility, according to Kevin Sears, Cleveland Clinic’s executive director of market and network services.
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Sutter Health forms joint venture with Aetna
Sutter Health, a not-for-profit health system based in Sacramento, Calif., has formed a joint venture with Aetna to offer jointly owned health plans to residents of Northern California. The new company will start with commercial employer-based products in mid-2018 and expand its offerings to include preferred provider organization policies in 2019, pending regulatory approval. A point of focus will be the use of data analytics to identify at-risk patients earlier and provide them more timely access to care by expanding access to alternative sites of care, Sutter Health explained on its website.
Supreme Court decision expedites process to bring biosimilars to market
In a 9-0 vote, the Supreme Court ended a three-year patent dispute between Amgen and Sandoz, clearing the way for makers of biosimilars to bring their products to market more quickly. The case centered on the Biologics Price Competition and Innovation Act (BPCIA), which requires makers of biosimilars to give at least 180 days’ notice to the maker of the original brand-name version before launching the biosimilar. A key point of contention was whether the notice could be given before the Food and Drug Administration approves the biosimilar, or if the approval must come first—effectively giving the manufacturer of the brand-name product an additional six months of market exclusivity. Amgen took Sandoz to court over Zarxio, a biosimilar version of Neupogen (filgrastim) and the first biosimilar ever to receive FDA approval, asserting that Sandoz had violated the BPCIA. Although the district court dismissed Amgen’s state law claims, a federal appeals court subsequently ruled that Sandoz’s notice to Amgen was premature and ineffective, and that notice is only effective after FDA approval. The Supreme Court reversed the appellate court’s decision, a move that could save consumers and payers—and cost some drug companies—billions of dollars.
MassHealth ACO participants selected
Massachusetts has selected 18 health care organizations to participate in MassHealth’s accountable care organization (ACO) program starting in January. MassHealth is a combination of the state’s Medicaid and Children’s Health Insurance programs. The ACO program is a component of the state’s five-year Medicaid waiver, which provides $1.8 billion in federal funding to restructure the health care delivery system for MassHealth’s 1.9 million members, the Massachusetts Health and Human Services Department said in a news release. The ACOs will provide care for more than 900,000 members and will include approximately 4,500 primary care providers. There will be three ACO models—two in which ACOs will partner with managed care organizations, and one in which ACO providers will contract directly with MassHealth.
Relief for payers: senators introduce bill to create permanent reinsurance for ACA
Sen. Tim Kaine, D-Va., and Sen. Tom Carper, D-Del., introduced legislation that would create a permanent reinsurance program to help stabilize the ACA’s individual marketplaces. The ACA’s original reinsurance program was temporary, ending in 2016. The permanent program, which would be modeled after a similar Medicare Part D program, would provide federal funding to help offset larger-than-expected insurance claims for insurers participating in the federal and state insurance marketplaces. The proposed bill would also provide $500 million per year for the next three years to help states improve outreach and enrollment in the marketplaces.
EpiPen gets competition
The FDA approved Adamis Pharmaceuticals’ Symjepi prefilled epinephrine syringe for the emergency treatment of allergic reactions, including anaphylaxis. Symjepi provides two single-dose syringes, each containing 0.3 mg of epinephrine. The company anticipates launching Symjepi later this year and said it is preparing to submit a New Drug Application for a junior version of the product. FiercePharma reported that Symjepi will not be an interchangeable generic version of Mylan’s EpiPen but will instead compete with EpiPen on a head-to-head basis as a low-cost alternative. A Wells Fargo analyst told FiercePharma that “a significant portion of EpiPen sales … and gross profit may be at risk.”
Mergers and Alliances
Two South Carolina health systems intend to merge, creating the largest health system in the state. Pending regulatory and board approval, Columbia’s Palmetto Health and Greenville Health System will combine their facilities and operate under a new name that has not yet been chosen. The new, not-for-profit health system will include 13 hospitals and serve 1.2 million patients throughout the state. It will also be the largest private employer in South Carolina, with estimated annual net revenue of $3.9 billion.
MaineHealth is moving forward with plans to integrate all 10 of its affiliates into a single nonprofit organization. Nine of the affiliates’ boards have voted to request community feedback on the proposed integration; the remaining affiliate—the only one located outside of the state—has yet to hold a vote because of additional regulatory issues, according to the Press Herald. The Portland-based health system, Maine’s largest, has already begun to consolidate some functions and departments, the Press Herald reported, and will issue a final decision on the proposed integration later this year.