One Medicare negotiation lawsuit, out

A federal district judge on Monday granted the Biden administration's request to dismiss a PhRMA lawsuit challenging Medicare's new drug price negotiation program, an early but positive sign for officials embroiled in a slew of suits against the law, Rachel Cohrs writes.

However this action wasn't about the substance of those groups' arguments. The Texas judge dismissed one of the co-plaintiffs, the National Infusion Center Association, from the case because it didn't have subject matter jurisdiction to bring the lawsuit. And because NICA was the only party to the lawsuit in Texas, the whole case got tossed.

That means the Biden administration still has to brace for battles in Washington D.C., New Jersey, and Delaware, where a judge recently heard arguments in an AstraZeneca suit against the negotiation plan. More from Rachel.

on the hill

Mike Johnson is rolling in Altria cash

House Speaker Mike Johnson has found fast friends in the executive team at the cigarette giant Altria, my colleague Nick Florko reports.

Altria's executives gave a fundraising committee tied to Johnson nearly $75,000 over the course of two weeks in November, according to newly released FEC records. Nearly all of Altria's C-suite got in on the action, including the company's CEO, COO, CFO, Chief Human Resources Officer, and the company's top lobbyist. The donations appear to be tied to a fundraiser that was co-hosted by Todd Walker, Altria's senior vice president of government affairs, in late November.

The donations demonstrate the potential stakes for Altria in Washington this year as the FDA readies bans on menthol cigarettes and flavored cigars. Altria sells both Marlboro menthol cigarettes and Black & Mild flavored cigars, both of which would be banned under the FDA's proposals. Several Altria executives, including the company's CEO and its top lobbyist, dramatically increased their personal donations to lawmakers in 2023, FEC records show. Walker more than doubled his personal donations, from $66,000 in 2022 to a sizable $150,000 in 2023, records show.

The donations to Johnson also demonstrate how much getting elected House speaker can help a politician's re-election war chest. Last year, before his ascension to speaker, Johnson received a single $2,000 check from Altria's political action committee.

research dollars

CMS research drama

Doing research on Medicare and Medicaid is about to become a lot more expensive.

There are two ways researchers can play with Medicare and Medicaid data. They can either access it through secure servers at their universities or institutions, paid for both per-file and through a fee for maintaining a "data use agreement." This is called "physical data access." The other, more expensive option: Researchers can go through CMS' "Virtual Research Data Center," which can cost $22,000 per year for all federal data, Bob Herman reports.

Now CMS is funneling everyone toward that pricier data center. "Due to growing data security concerns and an increase in data breaches across the health care ecosystem … CMS is discontinuing" the cheaper physical data access, the agency said in a bulletin to the research community on Monday. In addition, the government will charge $10,000, starting in August, to renew data use agreements for physical data access.

Researchers blasted the agency for the sudden change, arguing it blows up current projects with grant funding and makes future research prohibitively more expensive. "If CMS proceeds along this path, a wide array of research that is happening would not be able to continue," said Adam Sacarny, a health care researcher and professor at Columbia University, who was among the first to flag this change in policy. "This is research that is fundamental to making these programs better, and it won't be able to happen."

airing the debate

Big Superbowl spending for health care

The Super Bowl saw a parade of celebrity-packed advertisements for coffee, cars, home-buying, and yes — bringing down high and untransparent health care costs. Power to the Patients — which as we know, has hosted big-name concerts for the cause — this time called on musicians Jelly Roll (who performed at one of their D.C. events), Lainey Wilson, and Valerie June.

Thirty-second ad spots in this year's Superbowl averaged about $7 million, but Power to the Patients told STAT that's not what they spent, in large part because the message run during the game was targeted to the D.C. market alone. It was part of a "multimillion-dollar campaign," they added. Besides the Super Bowl spot, the group has mounted other ad campaigns and a bevy of events targeting lawmakers. As Rachel has written before, the efforts parallel a billionaire-backed mission to reform high drug costs and has openly vexed hospital advocacy groups.

Elsewhere during the marathon game, Pfizer's ad touted its 175-year history and its focus on new cancer treatments, with portraits of historical scientists played to the tune of Queen's "Don't Stop Me Now" (and notably, in a 60-second ad). Considering some football fans' anger over Chiefs star Travis Kelce featuring in a Pfizer Covid-19 vaccine ad, it's an interesting time to champion the company's non-coronavirus work. For his part, a TV critic at the NYT declared it one of a groups of "flagrant missteps." A Pfizer spokesperson told STAT's Annalisa Merelli that the company's goals wast to "celebrate science in a fun, engaging and uplifting way" that captured the persistence and relentlessness of scientific discovery. More from Annalisa.

eye on medicare

Private equity's moves in Medicare Advantage

A new report from the Private Equity Stakeholder Project shows that private equity firms have been largely edged out of the Medicare Advantage space by big insurers. But they're still finding a way in, gathering investments in insurance brokerages, marketing firms, in-home assessment companies, and "insurtech" companies that do risk adjustment and outcomes tracking.

The "Medicare Advantage industry is a big cash cow for a lot of different players," said report author Mary Bugbee from PESP. "Publicly traded insurers have gotten a lot of the scrutiny from reporters [and] lawmakers, but private equity firms have operated and continue to operate in this ecosystem."

The number of private equity deals in the Medicare Advantage ecosystem tapered off in 2022 and 2023, the report said, but experts attributed that more to high interest rates, not a lack of appetite.

Some of the drop-off might also be investors re-evaluating what's most profitable in MA. Amid Medicare reining in bonuses and changing how it pays MA plans — which has big insurers in a tizzy, as our colleague Bob Herman noted in yesterday's Health Care Inc. newsletter — "the biggest challenge is always going to be changing reimbursement methods: What qualifies for bonuses and then how much those bonuses are," Greg Hagood, president of SOLIC Capital, told STAT's Brittany Trang.

in the courts

First Opinion: 'Outrageous' patient argument against Gilead

Can patients sue companies that they believe slow-walked better treatments? That's what a California court has allowed, for now, riling at least one legal expert who says it could have broad implications for pharmaceutical companies' research and development strategies.

The case centers around Gilead's development of two HIV treatments, known as TDF and TAF. The former was one of the first approved treatments on the market in 2001, but came with serious potential side effects like skeletal and kidney damage. The company also had early data on the similar TAF drug, but no definitive evidence of its effectiveness yet. It eventually applied for FDA approval and the first TAF version hit the market in 2015.

Patients allege that Gilead purposely did not develop TAF earlier to protect its TDF profits. And now, an appellate court is letting that suit proceed. However, "the fact that the court has accepted this premise is outrageous," Daniel Troy, a managing director at Berkeley Research Group and former lawyer for GSK and the FDA, writes in an op-ed. Ultimately, he argues, it could threaten companies' appetite for high-risk research because patients could "second-guess" the process with the benefit of hindsight. Read more from Daniel.

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What we're reading

Former U.S. surgeons general: The U.S. should ban menthol cigarettes, STAT
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Post-Roe v. Wade, more patients rely on early prenatal testing as states toughen abortion laws, The AP
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Should Illinois become 11th state to adopt 'right-to-die' legislation?, The Chicago Sun-Times