Health Brief: Gottlieb Vaping Connection Could Present Conflict of Interest

Washington Brief

  • Scott Gottlieb, President Donald Trump’s pick to head the FDA, served for more than a year on the board of a company that sells vaping products, presenting a potential conflict of interest if he’s confirmed. (Bloomberg News)
  • The Trump administration is struggling to fill a key mental-health post that was created last year to streamline the efforts of various federal agencies. (The Wall Street Journal)
  • A meeting with CMS Administrator Seema Verma did not appear to give insurance executives more confidence that the Trump administration would make key payments under the Affordable Care Act. (The New York Times)

Business Brief

  • Embattled blood-testing firm Theranos will pay back $4.65 million to its Arizona customers (around $26 per customer) as part of a settlement with the state’s attorney general. (CNN)
  • Cardinal Health is acquiring part of Medtronic’s medical supplies business for $6.1 billion. (Modern Healthcare)
  • Johnson & Johnson’s first-quarter revenue missed analyst estimates, causing its shares to plummet 3.6 percent in the biggest one-day percentage decline in more than eight years. (Reuters)

Chart Review

Events Calendar (All Times Local)

The Atlantic event on future of prescription drugs 8:30 a.m.
BCIU event on pharmaceuticals and biotech sector 1 p.m.
CSIS hosts discussion on future of global health financing 2:30 p.m.
No events scheduled



Vaping Venture Poses Potential Conflict for Trump’s FDA Nominee
Zeke Faux et al., Bloomberg News

President Donald Trump’s pick to head the U.S. Food and Drug Administration, Scott Gottlieb, will be in charge of implementing new rules governing the e-cigarette industry after serving for more than a year on the board of a company that sells vaping products. From March 2015 to May 2016, Gottlieb was a director of Kure Corp., a Charlotte, North Carolina-based firm that distributes e-juices and vaping pens in coffeehouse-style lounges known as vaporiums.

Trump’s Latest Pick for Mental-Health Post Has Helped Prosecutors Secure Convictions
Michelle Hackman, The Wall Street Journal

The Trump administration is struggling to fill a top mental-health post, a job created last year to coordinate the efforts of far-flung federal agencies. The assistant secretary position in the Department of Health and Human Services was first offered to a Florida judge, but the offer was withdrawn due to his lack of a medical background, according to people familiar with the matter.

Republicans can’t find a way to repeal Obamacare because too many of them secretly love it
Matt O’Brien, The Washington Post 

Republicans haven’t been able to replace Obamacare, because they think the problem with it, metaphorically speaking, is that the food is terrible and the portions are too small. That, of course, is what Woody Allen had to say about life in “Annie Hall.”

U.S. Equities Slide as Financial, Health-Care Shares Decline
Oliver Renick, Bloomberg News

U.S. stocks fell, mirroring a drop in global shares led by oil producers and miners, as commodity prices retreated and Goldman Sachs Group Inc. weighed on financial companies. The S&P 500 lost 0.3 percent at 4 p.m. in New York to 2,342.


Health Insurers Make Case for Subsidies, but Get Little Assurance From Administration
Reed Abelson, The New York Times

Health insurers pressed Trump administration officials on Tuesday to continue billions of dollars in subsidies for low-income people buying plans under the federal health care law, but left with nothing that would dissipate the fog of uncertainty hanging over the industry. The insurers have been closely watching as President Trump and congressional Republicans and Democrats debate the future of those subsidies, known as cost-sharing reductions paid by the Obama administration that now go to the companies covering about seven million individuals to help lower deductibles and co-payments.

Bare Market: What Happens if Places Have No Obamacare Insurers?
Margot Sanger-Katz, The New York Times

The Obamacare marketplaces can be thought of as a government-run store. The government gives many customers subsidies, like gift cards, that they can use to buy insurance.


Secret Data On Hospital Inspections May Soon Become Public
Charles Orstein, ProPublica

The public could soon get a look at confidential reports about errors, mishaps and mix-ups in the nation’s hospitals that put patients’ health and safety at risk, under a groundbreaking proposal from federal health officials. The Centers for Medicare and Medicaid Services wants to require that private health care accreditors publicly detail problems they find during inspections of hospitals and other medical facilities, as well as the steps being taken to fix them.

Why providers overwhelmingly back Mike Pence’s Medicaid expansion
Bob Herman, Axios

Indiana’s conservative twist on Medicaid expansion — approved when Mike Pence was governor — has solid support among health care providers in the state. The two main reasons: It pays better than standard Medicaid rates, and they prefer it to no expansion at all, which would have left them on the hook for more charity care.

Medicare advisers consider tighter rules on doctor-owned medical distributors
Christine Ayala, The Hill Extra

Regulators are mulling tightened oversight over physician-owned distributors of medical products, on fears that conflicts of interest could lead to fraud. Some hospitals have set up barriers to avoid anti-kickback entanglements with device distributors, and the Medicare Payment Advisory Commission (MedPAC) is looking at more specific requirements in congressional recommendations.

Pharma, Biotech and Devices

Cardinal Health to acquire Medtronic medical supplies business for $6.1B
Alex Kacik, Modern Healthcare

The drug and medical products distributor Cardinal Health plans to acquire Medtronic’s medical supplies business for $6.1 billion, the company announced on Tuesday. The cash deal would give the Dublin, Ohio-based company access to Medtronic’s 23 product categories in its patient care, deep vein thrombosis and nutritional insufficiency business, which “are used in nearly every U.S. hospital,” Cardinal said.

J&J first quarter revenue misses estimates; new forecast includes Actelion
Bill Berkrot and Natalie Grover, Reuters

Johnson & Johnson on Tuesday reported disappointing pharmaceutical and consumer product sales as revenue missed analyst estimates, sending its shares sharply lower. However, cost controls and lower taxes helped the healthcare conglomerate beat Wall Street profit forecasts.

Grassley probes insurer over ‘penalties’ charged for brand-name drugs
Ed Silverman, Stat News

After months of targeting drug makers over their pricing, Senator Chuck Grassley is now probing one of the biggest insurers in the mid-Atlantic region, opening what may become another front in the battle over the cost of prescription medicines. The lawmaker has asked CareFirst BlueCross BlueShield to explain a complicated policy that he suspects may force patients to overpay for brand-name medications that doctors have specified must be dispensed.

Fight against neglected tropical diseases needs Big Pharma push: WHO
Stephanie Nebehay, Reuters

Progress has been made in tackling diseases that blind, disable and disfigure millions of poor in tropical areas each year, but drug companies need to step up donations of medicines, the World Health Organization (WHO) said on Wednesday. One billion people, mainly in Asia, Africa and Latin America, are still treated each year for at least one of 18 neglected tropical diseases known as NTDs, it said.

Health IT

Theranos will pay $4.65 million to Arizona customers
Sara Ashley O’Brien, CNN 

Theranos has agreed to give $4.65 million back to its Arizona customers as part of a settlement deal. The embattled blood testing startup sold more than 1.5 million blood tests to more than 175,000 customers in the state between 2013 and 2016, according to Arizona attorney general Mark Brnovich.

A Message from the College of American Pathologists:

Pathologists are physicians whose diagnoses drive care decisions made by patients, primary care physicians, and surgeons. Watch as Dr. Jiang navigates the high stakes of diagnosis.

Opinions, Editorials and Perspectives

Sustaining the Transition to Value-Based Health Care
Nick Augustinos, Morning Consult 

Initial efforts to repeal and replace the Affordable Care Act seem to have been put on the back burner — at least for the time being. But discussion continues on one critical question: What’s the role of value in our health care system?

How the GOP Could Nudge the Uninsured Toward Coverage
James C. Capretta and Lanhee J. Chen, The Wall Street Journal

Republicans in Congress say they’ll keep working on health-care reform. It never made sense to give up after only a few months of trying, but their plan would have better prospects if they modified it to address the criticism that it would leave too many people without insurance.

Why slashing the NIH budget is indefensible
Katrina vanden Heuvel, The Washington Post 

In January 1970, the organizers of the first Earth Day published a full-page ad in the New York Times. A few months ahead of thousands of demonstrations and teach-ins across the United States, they declared that Earth Day represented “a commitment to make life better,” “to provide real rather than rhetorical solutions,” and “to challenge the corporate and government leaders who promise change, but who short change the necessary programs.”

Big Tobacco Attacks Sensible F.D.A. Rules on Vaping
The Editorial Board, The New York Times

As smokers turned to electronic cigarettes to reduce the health risks of smoking, big tobacco companies started buying e-cigarette makers and producing and selling their own. Now those companies are lobbying Congress to prevent the Food and Drug Administration from regulating electronic cigarettes and cigars, as it does conventional cigarettes.

A Message from the College of American Pathologists:

Pathology is an integral part of surgery. Pathologists provide answers to key questions: Is a lesion benign or malignant? Has it spread? Is more testing needed?

Watch as Dr. Atkinson supports Kathy and her care team from biopsy to diagnosis.

Research Reports

Addressing Pre-Existing Conditions and Encouraging Continuous Coverage
Edmund Haislmaier, The Heritage Foundation

Americans are understandably concerned that they have access to health insurance and not be turned away because of a pre-existing medical condition. However, to sustain a health insurance market that can meet the needs of all Americans, including those with pre-existing conditions, health insurance rules must be crafted in a way that encourages individuals not only to get, but also to maintain coverage.