Capsule: Stem Cells, McKesson & Medicaid Enrollment

Welcome to Capsule—your weekly dose of health-care news, where we give you a recap of this week’s highs and lows for key players in the industry. You can expect us every Friday morning as a bookend for your week.

With health-care pricing transparency on the horizon, our reporter Madison Alder breaks down what needs to happen for President Donald Trump’s executive order to become a reality. The final product likely won’t be as clear-cut as the order lays out, so keep your eyes peeled for more details as the policies materialize. In the meantime, let’s dig into the rest of this week’s news.

Here’s what ended the week on a high note:

Senate Health-Care Talks

• Leaders of a Senate health panel advanced legislation to rein in surprise medical bills and raise the age to buy tobacco products amid a backlash from major players in the hospital industry and some senators, Alex Ruoff reports.
• Drug price legislation sailed through a separate Senate committee this week as well. It includes a bill that would cap the number of patents drugmakers can file for brand products.
• It’s all part of a health-care bill blitz aimed at getting legislation passed before the August recess. Drug prices have been a pet project for lawmakers this session, and as the country heads into the 2020 presidential race, health-care costs will continue to take center stage.

Medicaid Enrollment

• Enrollment in states that expanded Medicaid profoundly exceeds initial projections, Sam McQuillan writes. According to a report, total enrollment across states with expanded Medicaid is up 37.3% since raising their income eligibility levels at the start of 2014.
• States like Colorado and New Mexico were part of that trend with enrollment numbers almost three times higher than initial estimates. States that chose not to expand their programs had enrollment an increase of 11.1% in the same time period.
• States hadn’t anticipated the amount of “pent-up demand,” a researcher told McQuillan. “They didn’t expect everyone to come in all at once.”

McKesson

• McKesson Corp. has defeated a proposed class action—part of a sprawling multidistrict case—accusing the drug distribution giant of colluding with pharmaceutical companies to jack up the price of generics, Mike Leonard writes.
• Claims that McKesson should have been aware of unprecedented price hikes by its drugmaker business partners, because it was profiting from them, is insufficient to show the distributor participated in a conspiracy, a federal judge ruled.
• The case is part of a larger lawsuit involving 44 states that say 20 major drugmakers—including generic giants Teva and Mylan—conspired to artificially inflate and manipulate drug prices.

It was a bleak week for others. Here’s whose Thursday closed on a downswing:

Stem Cell Clinics

• Consumers alleging a California stem cell clinic duped them into expensive treatment by misrepresenting customer satisfaction narrowly won certification of a nationwide deceptive marketing class, Julie Steinberg reports.
• The claims against Stemgenex Medical Group Inc., Stemgenex Inc., and Stem Cell Research Centre Inc. arise from an alleged uniform misrepresentation regarding patient satisfaction ratings.
• Meanwhile, a for-profit stem cell company in Florida can’t treat any more patients with a fat-tissue treatment linked to blindness until it complies with FDA regulations, Jeannie Baumann writes.
• And on a federal level, the National Institutes of Health wants to clamp down on for-profit stem cell clinics that market their products as being based on research included in studies at ClinicalTrials.gov, implying the federal government has endorsed the treatments, Baumann reports.

MedTech Industry

• Makers of pacemakers, surgical gloves, and patient monitoring systems may have to dig even deeper in their pockets by 2020 if the federal government continues to increase tariffs on goods from China and doesn’t completely repeal the medical device tax, Ayanna Alexander reports.
• Trump proposed a 25 percent tariff spike in May, affecting up to $1.3 billion worth of medical devices, according to the Advanced Medical Technology Association.
• AdvaMed and some medical technology manufacturers asked the office of the U.S. Trade Representative to remove certain devices from the potential tariff inflation list during the agency’s June 20 hearing on the recent round of tariffs.
• “If tit-for-tat retaliation continues, the administration’s objectives for a strong domestic medical technology industry will be undermined,” Ralph Ives, executive vice president of global strategy and analysis for AdvaMed, said.

Migrant Children

• The U.S. government may run out of money in July to shelter migrant children apprehended as they cross the border with Mexico, said Health and Human Services Secretary Alex Azar, Shannon Pettypiece writes.
• “We are full,” he told reporters after a meeting at the White House this week. “We do not have capacity for more of these unaccompanied children to come across the border.”
• Azar’s department is responsible for managing a network of privately run shelters for migrant children apprehended by U.S. immigration authorities. The number of children in the government’s care has grown, thanks to a surge of migrants at the southern border. Customs and Border Protection says it has apprehended more than 56,000 children unaccompanied by their parents or other caregivers at the border since October.

Thanks for joining us this week and have a great weekend. I’m all ears when it comes to your 2 cents, tips, critiques, or coordinating exclusive interviews. Send them my way at jlee1@bloomberglaw.com.