Pharmaceutical & Life Sciences News

Capsule: Celgene Shareholders, Low-Income Virginians & Pharma Freebies

Jan. 4, 2019, 11:10 AM

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 health-care industry. You can expect us every Friday morning as a bookend for your week.

Happy New Year everyone. The season of merriment is over. Now we begin a new—and typically way less fun—chapter of the year. Now begins the season of resolutions. If you’re late on deciding your resolution this year I have a suggestion: keep a better eye on what’s happening around you. One way to start is to keep reading about this week’s health care news ... (see what I did there?)

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

Celgene Shareholders

  • It was certainly a great way to kick off the new year for Celgene shareholders, who saw their shares soar by 24 percent Jan. 3 after Bristol-Myers Squibb agreed to acquire Celgene in a record-sized $74 billion deal.
  • The deal will unite two drugmakers battling for advantage in a crowded market for innovative cancer treatments, Rebecca Spalding and Cynthia Koons from Bloomberg News write.
  • Investors are still wary of the deal. But by buying Celgene, BMS is set to control the top-selling blood-cancer therapy Revlimid, which costs more than $100,000 a year. It will also gain a promising experimental CAR-T cancer immunotherapy being developed by Juno Therapeutics, which Celgene acquired in a $9 billion takeover deal last year.

Low-Income Virginians

  • It’s not often that low-income Americans have a “high” when it comes to health-care news, but this week 202,182 newly eligible Virginians got health-care coverage through Medicaid. They joined more than 1 million residents who are already insured by the program, Genevieve Douglas reports.
  • However, Virginia is one of several states that wants to pair expanded Medicaid eligibility with work requirements that could limit participation.
  • If Virginia’s work requirement waiver is approved, individuals added to the program through expansion would have to work, go to school, or enroll in job training for 80 hours a month, according to the state’s application.

Presidential Hopefuls

  • A burgeoning list of Democratic presidential hopefuls will try to use their health-care platforms in this next Congressional session as springboards to propel them to the White House in 2020, Tyrone Richardson and Alex Ruoff report.
  • Democrats considering a run against President Donald Trump include Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.). They’re likely to use the health and labor committee’s agenda as jump-off points for their ideas and bills related to health-care and employment issues, political observers told Bloomberg Law.
  • Warren all but threw her hat into the ring on New Year’s Eve when she announced she was forming an exploratory committee for a presidential run.

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

Pharma’s Public Image

  • Prices were raised on about 27 percent of the top 500 branded drugs, according to a Goldman Sachs analysis. Another analysis from Rx Savings Solutions showed similar results. Consequently, Big Pharma is starting off the year under harsh criticism, although there are fewer price hikes this year so far than there were last year, Cristin Flanagan and Riley Griffin write for Bloomberg News.
  • More price hikes are expected as the month progresses though. The increases have helped fan the flames of discontent among patients who say they’re paying too much and politicians who are struggling to rein in costs.
  • Adding injury to insult is the fact that pharmaceutical companies now have to contribute more in 2019 to help close the Medicare Part D gap, also know as the “doughnut hole.” That gap is the point where a person’s drug expenses exceed the initial coverage limit of a Part D plan, but aren’t high enough to qualify for Part D’s catastrophic coverage. The new contributions will cost pharma billions.

Pastry Lovers

  • Starting Jan. 1, drug companies can no longer give gifts or cash payments to business associates—traditions that are accepted and sometimes expected—in China and other parts of the world, Dana Elfin reports.
  • That means no more mooncakes, a traditional Chinese baked good that’s often exchanged between drug companies and business associates in that country.
  • The change in the International Federation of Pharmaceutical Manufacturers and Associations’ (IFPMA) Code of Practice is meant to clamp down on bribes and seedy business behavior abroad. It’ll force drug companies to think more creatively about how they honor the business traditions of other countries while keeping with the code’s standards.


  • James Swann takes a look at why taxpayers are overpaying for Medicaid.
  • He boils it down to the program’s unique federal-state structure, which makes it difficult for states to recover inappropriate payments to doctors and means the money might never be collected.
  • Close to $2 billion from the past eight years still hasn’t been recovered. States are responsible for collecting errant payments to doctors and hospitals under the low-income health program and forwarding the money to the federal government. The process is cumbersome, however, so don’t hold your breath on ever seeing that money again, Swann writes.

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

To contact the reporter on this story: Jacquie Lee in Washington at jlee1@bloomberglaw.com

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