News Briefs

Clover Health Investments Corp. said it has reached an agreement to settle seven shareholder-filed lawsuits that accused the Medicare-focused insurer of concealing material information from investors before going public. In April, the company agreed to pay $22 million to settle a similar class-action lawsuit filed by shareholders, which centered on allegations outlined in a report from the activist short-selling firm Hindenburg Research. That report called Clover a “broken business” that “misled investors about critical aspects” of its operations in the run-up to the company’s 2021 debut on the stock market, including failing to disclose an active Dept. of Justice investigation. Clover did not admit wrongdoing as part of either the April settlement or the June agreement, which will resolve the remaining shareholder-led civil cases filed against it in Delaware, New York, and Tennessee courts.

The Pharmaceutical Research and Manufacturers of America (PhRMA) sued the Biden administration over Medicare drug price negotiation and inflation cap provisions in the Inflation Reduction Act (IRA), arguing that the policies are unconstitutional. Two patient assistance groups, the National Infusion Center Association and the Global Colon Cancer Association, joined the lawsuit, which was filed in the U.S. District Court for the Western District of Texas, per a PhRMA press release. The U.S. Chamber of Commerce, Bristol Myers Squibb, and Merck & Co. Inc. filed their own lawsuits against the drug price provisions of the law in recent weeks, and Biogen Inc.’s CEO said that his firm may do the same. The Chamber of Commerce was a major financial backer of legal efforts to overturn the Affordable Care Act during the 2010s, and it filed an amicus brief in support of the lawsuit that ultimately led to the U.S. Supreme Court’s move to strike down mandatory state Medicaid expansion.

UnitedHealth Group’s Optum division on June 5 made an unsolicited, $3.3 billion all-cash offer to acquire home health care and hospice provider Amedisys, Inc. The offer, in which UnitedHealth would spend $100 per share, would trump a May merger agreement between Amedisys and fellow home health provider Option Care Health Inc., which valued Amedisys stock at $97.38 per share. The Option Care offer involved debt and stock, rather than cash. The UnitedHealth deal is just the latest home health care transaction from the integrated insurance and care delivery giant: Optum closed its $5.4 billion acquisition of home care provider LHC Group in February this year.

Humana Inc. opened its 250th senior primary care center on June 6, following several years of its own provider-acquisition spending spree. Humana plans to open “30-50 new centers per year through 2025,” per a press release, and operates primary care centers in Arizona, Florida, Georgia, Kansas, Kentucky, Louisiana, Missouri, Nevada, North Carolina, South Carolina, Tennessee and Texas. Humana closed a deal to fold the former Kindred at Home into its CenterWell provider brand in 2021.

Amneal Pharmaceuticals, Inc. launched Fylnetra (pegfilgrastim-pbbk), the company said May 16. The granulocyte colony-stimulating factor is the sixth biosimilar of Amgen Inc.’s Neulasta (pegfilgrastim) to launch in the U.S. The FDA approved the drug on May 26, 2022, to decrease the incidence of infection, as manifested by febrile neutropenia, in patients with non-myeloid malignancies receiving myelosuppressive anti-cancer drugs associated with a clinically significant incidence of febrile neutropenia. Its J-code is Q5130. It is the third biosimilar that Amneal has launched in the U.S.

Amgen settled a patent infringement lawsuit (No. 22-cv-1549) with Janssen Biotech Inc., a division of Johnson & Johnson, over a proposed biosimilar of Stelara (ustekinumab), Amgen revealed May 23. Stelara, a human interleukin-12 and -23 antagonist, is indicated for adults with moderate-to-severe plaque psoriasis, moderately to severely active Crohn’s disease and moderately to severely active ulcerative colitis, as well as people at least 6 years old with moderate-to-severe plaque psoriasis who are candidates for phototherapy or systemic therapy and people at least 6 with active psoriatic arthritis. The FDA first approved it on Sept. 25, 2009. Amgen said the settlement will allow its biosimilar to launch “no later than” Jan. 1, 2025.

In a case closely watched by the health insurance industry, US ex rel. Schutte v. SuperValu, Inc., the Supreme Court on June 1 reversed an appeals court decision that would have hobbled the government’s use of the False Claims Act (FCA) to pursue fraud cases. The SuperValu case — which was consolidated with another whistleblower case, U.S. ex rel. Proctor v. Safeway, Inc. — concerned whether the two pharmacy/grocery chains knowingly filched the U.S. government by “usual and customary” prices for prescription drugs that failed to account for various discount programs. The Seventh Circuit Court of Appeals previously ruled that the companies aren’t liable under the FCA because they could prove they made an “objectively reasonable” interpretation of an ambiguous statute, regardless of whether they intended to commit fraud. But in a unanimous Supreme Court opinion, Justice Clarence Thomas wrote that FCA liability instead should hinge on “what the defendant thought when submitting the false claim — not what the defendant may have thought after submitting it.” In an amicus brief submitted in April, AHIP and the American Hospital Association warned that a ruling in favor of the government’s position in the cases would “create a Wild West of ramifications for any well-intentioned and legitimate hospital or insurance provider that seeks to serve Americans in partnership with the government.”

AHIP President and CEO Matt Eyles will leave his position on Oct. 2, the health insurer trade group said on May 24. Eyles has helmed AHIP for nearly five years, and the organization said his resignation is a “personal decision.” During his tenure, Eyles brought both Aetna and Humana back into the fold, as those two insurers left AHIP before he became president and CEO. He also presided over a branding overhaul, in which the group known as America’s Health Insurance Plans opted to go by its acronym alone “to recognize the industry’s role extends well beyond health insurance coverage to providing solutions that are ‘Guiding Greater Health.’” The executive committee of AHIP’s board of directors will start a national search for Eyles’ replacement.

Eisai Co., Ltd. and Biogen Inc.’s Leqembi (lecanemab) could raise Medicare Part B spending by $8.9 billion or more annually if it receives full approval from the FDA KFF found. And a report by researchers from the RAND Corp. found that Leqembi could increase spending by $2 billion to $5 billion. KFF’s projection was based on an annual list price of $26,500 and uptake among 5% of Alzheimer’s patients. The RAND report included estimates of ancillary costs, such as MRI scans. The FDA granted accelerated approval to the anti-amyloid monoclonal antibody treatment in January, and its decision on full approval is expected soon.

CVS Health Corp is shutting down its clinical trials division, which launched in 2021, and will conclude operations in 2024. The division has worked with more than 30 drugmakers on 50 Phase I, II and IV studies involving 33,000 participants, according to Modern Healthcare.

The national uninsured rate in 2022 was 8.4%, down from 9.2% in 2021 and 9.7% in 2020, according to the Centers for Disease Control and Prevention’s National Health Interview Survey. In a May 18 research note, Citi analyst Jason Cassorla noted that the lower uninsured rate is “not surprising” given efforts to make the Affordable Care Act marketplaces more affordable and accessible, such as elongated special enrollment periods and enhanced premium subsidies. Another likely factor is the Medicaid continuous enrollment requirement that was in place until April 1, 2023, due to the COVID-19 public health emergency. Since Medicaid eligibility redeterminations have now resumed, “we would expect upward pressure on the uninsured rate” going forward, Cassorla wrote, but he added that a “partial offset” would come from newly Medicaid-ineligible individuals signing up for ACA marketplace coverage.

Major pharmaceutical companies are gearing up to file legal challenges to the Medicare price negotiation provisions in the Inflation Reduction Act, Reuters reported. Industry sources who spoke with the news outlet said drugmakers plan to argue that a ban against discussing the price negotiation process violates their First Amendment rights, and that the $1 million per day fine for violations runs afoul of the Eighth Amendment’s protections from excessive fines. Sources also indicated that lawsuits could challenge the legality of initial guidance CMS issued in March regarding the Medicare price negotiation program, as it did not go through a formal process with proposed and final rules. Five of the world’s top drugmakers sent CMS letters raising legal concerns about the Medicare price negotiation program, but they have not yet been made public; CMS said it plans to publish the letters in July when it finalizes its guidance and regulations implementing the program.

Celltrion Healthcare Co. launched Vegzelma (bevacizumab-adcd), the company said on April 17. The FDA approved the injectable last September for multiple types of cancer, including colorectal and non-small cell lung cancer. It is the fourth FDA-approved biosimilar of Avastin (bevacizumab) from Genentech USA, Inc., a member of the Roche Group, to launch in the U.S. While the company has partnered with other companies in marketing biosimilars in the U.S., its Celltrion USA unit is taking full responsibility for this launch.

The FDA’s Oncologic Drugs Advisory Committee (ODAC) voted 11-1 that AstraZeneca and Merck & Co., Inc.’s Lynparza (olaparib) in combination with abiraterone and prednisone or prednisolone for the treatment of metastatic castration-resistant prostate cancer (mCRPC) should be limited to people whose tumors have a BRCA mutation. The FDA accepted a supplemental New Drug Application for a broader approval in mCRPC for the poly (ADP-ribose) polymerase (PARP) inhibitor last August. The class of drugs — which also includes GDK’s Zejula (niraparib) and Rubraca (rucaparib), whose rights Clovis Oncology, Inc. recently sold to pharma& Schweiz GmbH a few months after it filed for Chapter 11 bankruptcy — have been under some scrutiny after they withdrew some of their indications.