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Matthew’s health care tidbits: The drug model for DTx was wrong

Each time I send out the THCB Reader, our newsletter that summarizes the best of THCB (Sign up here!) I include a brief tidbits section. Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

If you were to look at pharmaceuticals in the US you might make three observations. 1) They are the most important way health conditions are helped, cured or eradicated. 2) The way they are delivered to patients (via pharmacies) is very badly integrated with the health care delivery system. 3) They are way too expensive.

OK, so those are my observations not yours but I think you’ll agree they’re all true.

Now I am going to tell you that we’ve developed a technology that lives in your phone that has the same impact as a drug, if not better. It will cure your depression, insomnia, pain, even maybe Alzheimer’s. And because it is a software product, not a drug you ingest, it has no (or at least few) dangerous side effects. And because it’s software and easy to distribute to millions of people, it can be cheap. Wouldn’t it be a great idea for the people managing health conditions—a patient’s clinical care team—to directly integrate this technology into the care they are delivering?

Some of the people building these technologies agreed, but most of them decided that they liked the current model of prescription pharmaceuticals. They built these cool technologies and decided to distribute them via physician prescriptions and charge for them like pharmaceuticals. To do that, they had to get FDA approval for their “Prescription Digital Therapeutics” (DTx) via expensive clinical trials. Additionally, of course, they hoped to get government-backed monopoly status–called patents in the pharma business.

In general in health care, the FDA regulates things that go into the body and may cause damage. The rest of clinical medicine has great latitude for experimentation, technique and technology development, and allows others to copy what works.

The companies heading down the Prescription DTx route also used the business model of regular pharma and biotech companies. They raised large amounts of money up front, applied for patents, went through the FDA clinical trial process, and hoped to charge significant amounts per patient once their DTx were approved and prescribed.

None of them seemed to care that if they succeeded, their DTx would necessarily only be accessed by a small population at great cost. None of them seemed to notice that their DTx were usually an electronic distillment of teaching, patient advice, coaching therapy or other activities that look more like extensions of traditional clinical care, as opposed to ingested pharmaceuticals.

Many of these companies are now in deep trouble. They raised money when it was cheap or even, like Pear and Better Therapeutics, took advantage of the SPAC vehicles to IPO. Now they have found that they cant get their DTx through the FDA process quickly enough or aren’t seeing the prescribing numbers they needed to make their products a success. Since the digital health stock crash, it’s very hard for them to raise more money. Pear Tx this week announced it was trying to sell itself.

My hope is that we get a reset. I want digital therapies that are extensions of clinical care to be widely used and widely available as part of the care process, and for their care to be integrated into clinical care –rather than to be prescribed and then delivered by some third-party. And, because they are software and because software scales, I want them to be cheap. Hopefully that is the future of DTx.

On second thoughts, that wouldn’t be a bad future for regular pharmaceuticals either!

Nils Bottler, Angelini Ventures

I’ve been friends with Roberto Ascione for many years. Roberto is a keen Napoli fan who on the side runs the Healthware Group and also the Frontiers Health Conference that I’ve been going to for many years (and where Jess DaMassa is co-MC). Recently Healthware acquired the media company pharmaphorum and hired star reporter (and another friend) Jonah Comstock, ex MobiHealthNews and HIMSS Media. This is THCB’s second cross-posting with pharmaphorum.—Matthew Holt

Nils Bottler, who recently joined Angelini Ventures as Principal, is an avid skier, surfer, and digital health investor based in Berlin. In a new podcast, he spoke with Paul Tunnah, pharmaphorum founder, about his career, the German start-up landscape, and where Angelini Ventures aims to have an impact.

Throw Away That Phone

By KIM BELLARD

If I were a smarter person, I’d write something insightful about the collapse of Silicon Valley Bank. If I were a better person, I’d write about the dire new UN report on climate change. But, nope, I’m too intrigued about Google announcing it was (again) killing off Glass. 

It’s not that I’ve ever used them, or any AR (augmented reality) device for that matter. It’s just that I’m really interested in what comes after smartphones, and these seemed like a potential path. We all love our smartphones, but 16 years after Steve Jobs introduced the iPhone we should realize that we’re closer to the end of the smartphone era than we are to the beginning. 

It’s time to be getting ready for the next big thing.  

—————

Google Glass was introduced ten years ago, but after some harsh feedback soon pivoted from a would-be consumer product to an Enterprise product, including for healthcare. It was followed by Apple, Meta, and Snap, among others, but none have quite made the concept work. Google is still putting on a brave face, vowing: “We’ll continue to look at ways to bring new, innovative AR experiences across our product portfolio.”  Sure, whatever.

It may be that none of the companies have found the right use case, hit the right price point, adequately addressed privacy concerns, or made something that didn’t still seem…dorky. Or it may simply be that, with tech layoffs hitting everywhere, resources devoted to smart glasses were early on the chopping block. They may be a product whose time has not quite come…or may never.   

That’s not to say that we aren’t going to use headsets (like Microsoft’s Hololens) to access the metaverse (whatever that turns our to be) or other deeply immersive experiences, but my question is what’s going to replace the smartphone as our go-to, all-the-time way to access information and interact with others? 

We’ve gotten used to lugging around our smartphones – in our hands, our purses, our pants, even in our watches – and it is a marvel the computing power that has been packed into them and the uses we’ve found for them. But, at the end of the day, we’re still carrying around this device, whose presence we have to be mindful of, whose battery level we have to worry about, and whose screen we have to periodically use. 

Transistor radios – for any of you old enough to remember them – brought about a similar sense of mobility, but the Walkman (and its descendants) made them obsolete, just as the smartphone rendered them superfluous.  Something will do that to smartphones too.

What we want is all the computing power, all that access to information and transactions, all that mobility, but without, you know, having to carry around the actual device. Google Glass seemed like a potential road, but right now that looks like a road less taken (unless Apple pulls another proverbial rabbit out of its product hat if and when it comes out with its AR glasses). 

—————-

There are two fields I’m looking to when I think about what comes after the smartphone: virtual displays and ambient computing. 

Continue reading…

Interview with Ogi Kavazovic, CEO of House Rx

Ogi Kavazovic, CEO of House Rx joined Matthew Holt to explain how his company is trying to ungum the specialty pharmacy market. Its a huge market with a few huge oligopolies in charge of it, and Ogi thinks there is room to work directly with the clinics responsible for most patients using injectables and provide them a better and cheaper experience. Last year they raised $30m in a round led by Bessemer, but as Ogi says there’s along way to go!

Matthew’s health care tidbits: Oh, the DEA makes me sigh….

Each time I send out the THCB Reader, our newsletter that summarizes the best of THCB (Sign up here!) I include a brief tidbits section. Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

I have always thought that the dual role of the Drug Enforcement Agency (DEA) was an anachronism that severely hampers America’s complex relationship with pharmaceuticals. Congress deems some medicines legal and regulates them via the FDA, and deems others illegal and tells the DEA and other law enforcement agencies to attempt to control their supply. Leaving aside the basic futility of this task, somehow DEA was also given the task of regulating the prescribers of legal prescription (and non-prescription) drugs–in particular those around controlled substances.

This has led to decades of DEA-led persecution of doctors, patients and even convenience store clerks in the name of reducing the diversion of opiates and methamphetamines. Of course going after any of these folks is much easier and less risky than hunting a Mexican cartel or busting real criminals, so it’s easy to see why the DEA has taken that approach. Has it worked in reducing the supply of opiates? Maybe. Has it had any impact on the opiate crisis? Not really. Have a whole lot of patients been caught in the crossfire? Yup.

Now the DEA is moving onto the next phase–re-regulating the online prescribing of controlled substances that was liberalized at the start of the public health emergency in 2020. As you can imagine, their proposals are not exactly bursting with reason.

The DEA is essentially banning all controlled prescribing without a face to face visit first. This is despite the fact that the demand for those mental health medications increased dramatically during the pandemic as rates of depression and anxiety went up by a factor of three. While you can argue that in 2021 and 2022 some online services (notably Cerebral) may–and I stress may–have crossed the over-prescribing line for ADHD and other conditions, there’s no evidence that what happened is any worse than the in-person care that the DEA has been inadequately overseeing for decades. More importantly, those online services have already pulled out of those exact therapeutic markets the DEA is alarmed about. Who is left providing online ADHD care? Local clinicians and reputable services. And of course DEA knows full well, and is doing nothing about, the lack of access to mental health professionals that existed long before the increase in demand.

Is there any reason to suspect DEA will improve the quality of the system dealing with these medications? Highly doubtful. There are two current examples suggesting why not. First, due to the increased demand from the pandemic induced mental-health crisis and production problems at pharma company Teva, there’s a massive shortage of ADHD medication already. The DEA could help patients out here, but have declined to increase production quotas–sending millions of patients and their parents on a wild goose chase hunting down pharmacies with actual supply of Adderall and related meds.

Secondly, the DEA wants to also ban the the online prescribing of another drug, buprenorphine, which is used to help wean patients with substance use disorder off opiates and other substances. OK, so there’s a one month grace period here but essentially this is a short-sighted ban that will directly lead to patients going to the black market to acquire opiates, leading to more addiction and death.

My conclusion is that the DEA should be removed from its oversight of licensed clinicians and that role be given to FDA or HHS. At the least these proposed  regulations should be abandoned and rolled back to what we have now. The only good news is that there is still time to comment on the regulations. I went and did so and I hope you will too. Patients have suffered enough already.

Matthew’s health care tidbits: Medicare Advantage is now a provider fracking contest

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Each time I send out the THCB Reader, our newsletter that summarizes the best of THCB (Sign up here!) I include a brief tidbits section. Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

Yes it’s time to talk Medicare Advantage (MA). It’s been a huge couple of weeks for the world of MA. On the commercial side, CVS bought the biggest pure play MA provider, Oak Street Health for $10bn. This pissed me off as if they paid $2 a share more I’d have made a profit on the stock I foolishly bought “on a dip” in 2021.

But this amazed many of us on THCB Gang, as they paid a huge premium and it works out to some $60k per patient. Now health care organizations have been overpaying for patient “lives” as long as I can remember–going at least as far back as Aetna nearly going out of business when it bought US Healthcare in 1996. So why is today’s incarnation of Aetna buying providers?

Well that’s to do with the regulatory side of MA. I have been on record since the very first post of THCB that Medicare FFS is an inefficient and expensive program–even if 80% of American hospitals say they lose money on it and have to charge commercial insurers more to make up for it. But while it’s possible to agree with George Halvorson that MA delivers better care at a lower cost than FFS Medicare, it is simultaneously possible to believe that MA costs more than it should. That’s because of aggressive RAF upcoding that’s been built both into home visits from companies like Signify and also into the EMRs doctors have been using to code MA members’ health status.

There are lots of proposals on how to fix this–including this one from Chenmed on how to change MA from paying for inputs (i.e how sick people are when they join MA) to outputs (how much better they got while in MA). But it’s clear that CMS is now officially coming after upcoding including full cross plan audits back to 2018. Even if not back to 2011. The MA plans will grumble about those past audits and tie CMS up in court but they know going forward the game is up

To make more money in MA they need to get hold and shake loose or frack some of the 85% of the premium that goes to provider organizations. Hence they are all getting into bed with them or buying them outright. UHG, Humana & now Aetna/CVS have been buying physician groups that serve MA populations at a quickening rate, and their goal is to put more of the 50% of seniors already into MA into those groups.

Will this save any money?  Well probably not, at least not yet. Humana has been reporting on the costs in its full risk capitated MA groups versus its FFS ones for a couple of years, and the difference is a rounding error. But the point is that the next war in Medicare Advantage is going to be what happens inside these plan-owned medical groups. So expect a lot more scrutiny of both costs, outcomes and patient experience within MA focused medical groups starting about now. 

Elia Stupka, Angelini Ventures

I’ve been friends with Roberto Ascione for many years. Roberto is a keen Napoli fan who on the side runs the Healthware Group and also the Frontiers Health Conference that I’ve been going to for many years (and where Jess DaMassa is co-MC). Recently Healthware acquired the media company pharmaphorum and hired star reporter (and another friend) Jonah Comstock, ex MobiHealthNews and HIMSS Media. THCB will be doing some occasional cross-posting with pharmaphorum starting with this interview of the boss of a new and well heeled Italian health tech VC fund!–Matthew Holt

Elia Stupka, Managing Director at Angelini Ventures, talks to Paul Tunnah, pharmaphorum founder, about his career, life passions and the exciting launch of Angelini Ventures – a €300 million fund paving the way for healthcare transformation across digital health and life sciences

With access to my records, I took my business elsewhere

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By EPATIENT DAVE DEBRONKART

Not our usual headshot but it is Dave!

I had a skin cancer diagnosed in November. It’s my third, and I researched the last one heavily, so I knew what I wanted (Mohs on the nose). But the hospital that did the diagnosis insisted I wait and have a consult visit in January, and *then* they’d let me schedule the procedure, probably in March.

I said I know what treatment I want – can’t I schedule the surgery now? They said, “That’s not how we do it.”

So I went home and called around. Beth Israel Deaconess Medical Center said if I could get them the information they would book me for January, right then and there.

How long did it take me to get them the data? 15 minutes. I went back to the first place’s portal and downloaded my visit note and pathology report and emailed it all to BIDMC. An hour after I dialed the phone I had the appointment I wanted.

Patient power. I took my records – and my business – elsewhere.

This is of course a nightmare for providers who think they can lock us in. And it’s a dream come true for providers who have been longing to win us away by providing better service.

(I would have had the surgery before now, within January, but COVID struck so we postponed.)

Medical record access is empowering! Thank you to those who worked so long and hard to create these policies!

It’s also great news for providers who are trying hard to be #patientcentric: now we can easily reward them with our business!

It’ll be even better in the coming years because data #interoperability via FHIR will let apps and hospitals go GET the data … or, even better, let consumers already have their data in their own app, to do anything they want with it. True patient autonomy.

Dave deBronkart is a patient activist, speaker and author. This was originally published on his LinkedIn page

Expanding Real World Datasets

How are you working to advance research and improve patient outcomes? Are you precisely matching records across disparate datasets? Find out at a Webinar TODAY Feb 1st 1pm ET Sponsored by LexisNexis Risk Solutions Health Care

Healthcare’s fragmented data silos and strict but necessary privacy restrictions make it difficult to link real-world datasets. Legacy tokenization technology has helped link records across disparate data sources, but it lacks the accuracy required to uncover actionable insights that can truly improve patient outcomes. Next-generation tokenization technology leveraging a Referential Data Layer is needed to match de-identified records with precision. Hear from Solis Mammography’s CMO on how they are leveraging referential tokenization technology to link their longitudinal imaging data with complementary clinical and genomics data, enabling in-depth breast cancer research to champion women’s long-term health and wellness.

If you care about healthcare improvement, and want to continue to make an impact, join us to learn more about:
• What is referential tokenization and why it matters in healthcare
• Challenges and limitations of legacy tokenization technology
• The power of linking real-world data sets through a network of curated partners
• How Solis Mammography is leveraging referential tokenization to advance women’s health
• Actionable use cases demonstrating referential tokenization further empowering your organization to improve patient outcomes.

Join Us | February 1 @ 1pm ET/10am PT | Register Today

Speakers are: Camille Cook, MPH, Sr. Director, Healthcare Strategy, RWD @LexisNexis® Risk Solutions

Camille has 15 years of experience in healthcare with a focus on leveraging big-data to improve clinical care outcomes. Throughout her career, Camille successfully implemented innovative practices for healthcare IT, healthcare organizations, and life sciences companies utilizing health informatics, big-data, epidemiology, and human behavior patterns to create actionable insights that guide healthcare policy and meaningful use practices. Camille has spent the last 7 years evaluating syndromic infectious disease trends, healthcare operations, health economic outcomes research, and social determinants of health.

Matt Veatch, Real World Data Consultant, Founder and Managing Director @Revesight Consulting

Leveraging over 25 years of experience in biopharmaceutical product and medical device development, Matt advises life science companies on global RWD access and RWE strategic planning, execution, and M&A investments. Prior to establishing Revesight Consulting in 2017, Matt served in various corporate leadership positions, most recently as Vice-president of Strategic Operations at Syneos Health, leading initiatives in RWD access and decentralized study management. Prior to Syneos, Matt rose through various levels to become the Global Head of RWD-Driven Research for Quintiles, founding and leading the landscape-changing strategic collaboration with IMS Health in 2015, directly seeding the $19 billion merger of the firms in 2016 to form IQVIA. Additionally, Matt is a Founding Board Member of the Decentralized Trials & Research Alliance.

Chirag Parghi, MD, MBA, Chief Medical Officer @Solis Mammography

Dr. Chirag Parghi is a board-certified radiologist with fellowship (subspecialty) training in breast imaging and the Chief Medical Officer of Solis Mammography where he oversees clinical quality across more than 100 breast centers. As CMO, he also leads the clinical research endeavors where he is the principal investigator on several trials and manages relationships with the various radiologist practices.  Dr Parghi is still a practicing radiologist with an academic appointment at Albert Einstein medical center in Philadelphia.  Dr. Parghi’s clinical interests are rooted in the use of emerging technologies (including AI) to facilitate the early diagnosis, individualized risk modeling, and treatment of breast cancer.

Matthew’s health care tidbits: How do you tell the price of a drug?

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Each time I send out the THCB Reader, our newsletter that summarizes the best of THCB (Sign up here!) I include a brief tidbits section. Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

As the average THCB reader is probably all too well aware I live in Marin County, California and therefore my kids are on amphetamine-based medication for ADHD. This is annoying as all get out because, as a controlled substance, this medication needs to be re-prescribed every month (no automatic refills allowed). In addition no 90 day supplies are allowed, and the kids must have checkups with their prescribing physician every 3 months (which are not cheap).

It’s not just prescribing which is complicated. Supply is an issue too and frequently pharmacies run out. This is furtherly frustrating because if one pharmacy is out it can’t move the Rx to another, even in the same chain like Walgreens or CVS. The new pharmacy requires a whole new prescription. I discovered last year that Alto Pharmacy, a VC backed home delivery pharmacy, will deliver controlled medications. This has saved me 12-24 visits to CVS in the past year.

But with a new year there are new problems. The “allowed” price, i.e. the price my insurer Blue Cross of Massachusetts had agreed with Alto Pharmacy (and other pharmacies) for the specific generic for one of my kids somehow went from $29 a month to $107. That’s the amount I actually pay until we hit our $4,500 family deductible. Incidentally because it’s a medication we still pay $10 a month after we hit the deductible.

Alto kept telling me that the cash price was around $50. But of course if we pay the lower cash price (either there or elsewhere using GoodRx) that doesn’t count against the deductible. So if we hit the deductible we are out the $50 (which works out to roughly $1200 per year for 2 kids). I kept asking Alto what had changed that made the cost go up? They kept not telling me an answer, other than it cost $107. I asked the good people at Health Tech Nerds slack group if they could guess what was going on. Their consensus was that the formulary tier had been changed. “But it’s a generic”, (I foolishly thought).

Finally I called the pharmacy number on BCBS Massachusetts website, and ended up talking to someone at CVS Caremark– their PBM. In the course of the 30 minute call they ran a dummy claim with several other pharmacies. All came back at the $107 number. They then looked up the formulary to see if it had changed. Meanwhile I looked at the formulary on the BCBS Mass website while this was going on. The medication was still tier 1. So why has the cost to me and perhaps to the Blues plan gone up from $29 a month to $107? (Yes that’s more than a factor of 3!)

While she was talking to me the Caremark rep was also able to Slack with several other colleagues–relatively advanced for an old world PBM I thought. Eventually the answer came back. The med was indeed tier one. But until we spent our deductible the med was tier 2. In other words if we were paying for the drug the price is $107. As soon as BCBS Massachusetts starts paying for it the price goes back to $29 (of which they only pay $19) as we have a $10 copay.

Why this has happened is beyond me? Is Caremark or BCBS Massachusetts suggesting another cheaper drug? I haven’t heard from them. Are they trying to discourage patients from getting to their deductibles? My cynical conclusion is that Caremark is trying to increase the revenue for CVS– its corporate pharmacy–which that accounts for 1/3 of all outpatient Rx.

Otherwise this pricing strategy makes no sense to me. Of course this is just another example of a completely opaque process. And that appears typical for American health care.

assetto corsa mods