Another U.S. biotech caught up in China scrutiny

Leaders of a House panel say they have uncovered an American subsidiary for the controversial Chinese company BGI.

There's a lot going on in the bipartisan letter that a House China-oversight committee wrote to Defense Secretary Lloyd Austin asking him to place several companies on the military's blacklist. The letter describes a web of companies connected to BGI, which already is on the Defense Department's list of Chinese military companies.

Among them is a company called Innomics, which the lawmakers say BGI is attempting to set up in Kentucky and Massachusetts to avoid regulatory scrutiny. Innomics is nearly 20-years-old, according to its website, John Wilkerson reports. The company did not immediately respond to questions about the letter.

The letter makes no mention of WuXi AppTec, a Chinese company that U.S. biotechs often use for research and manufacturing and that also is in the congressional crosshairs. But the letter is part of a drum beat of actions aimed at reducing the U.S.' reliance of Chinese biotechs, including WuXi. Last week, Reuters reported that WuXi had transferred U.S. intellectual property to Beijing without consent.

digital d-escapades

D* pics for diagnosis**

No, really. A company called HeHealth claims that their AI model can detect a range of sexually-transmitted diseases from a single snapshot of one's genitals. For now, with the regulatory gray area around digital health apps, it's flying under the FDA's radar, insisting it's a "lifestyle product," not a medical device, Lizzy Lawrence reports.

But the service quickly drew ire from patient advocates, doctors, and privacy experts for its lax protections against minors using the app or people taking nonconsensual pictures. Among those valid criticisms lies another basic question: who says that the app, and its underlying algorithm, even works?

But the FDA's power is relatively limited. The agency authority to actively regulate digital health products wasn't even codified until 2016. And when the FDA announced its intentions to regulate more products known as "clinical decision support" tools in 2022, it met fierce resistance from industry. More from Lizzy.

over at fda

A digital depression fix? Maybe

Speaking of digital apps and the FDA: The agency cleared Otsuka Pharmaceutical's digital treatment for major depressive disorder, marking a first for the space and potentially millions of people on medication who are still experiencing depression.

But that landmark comes amid many questions about whether such digital therapeutics deliver their advertised results — and whether they can gain traction with clinicians, insurers, and patients, Mario Aguilar writes. Prescription digital therapeutics have yet to see a blockbuster success, and several companies have gone out of business trying to create one.

Digital treatments have been a tricky space, as have mental health studies. Experts all agreed that the product's effect — a roughly 2-point drop in reported depression from people using the program — was modest at best, Mario writes. Yet they are divided on what that means for its value. More here.

the bottom line

$99,999,999.99

Health care costs are running off the page, literally.

Medicare is adding room for two more digits in the system that hospitals and doctors use to file claims. It can now accommodate prices just a penny shy of $100 million, John Wilkerson reports.

The need for more room is not hypothetical. In 2022, Medicare had to explain how to bill for a procedure that cost more than the allotted space in the claims processing system. Providers had to break up the cost of administering a new cancer treatment, then submit multiple claims.

cyber strategy

Checking in with Change

UnitedHealth Group, parent group of the company targeted in a cyberattack that froze millions of health care payments, is slated for at least one congressional hearing this month and the prospect of more federal and Capitol Hill scrutiny. UnitedHealth CEO Andrew Witty will appear before the Senate Finance Committee on Apr. 30, but over in the House, Oversight and Accountability member Jamie Raskin has also asked for answers by Apr. 8 on how this happened and whether the group did enough to ward off attacks on Change Healthcare.

The Biden administration is asking for more than $1 billion in next year's budget to incentivize hospitals to beef up their cybersecurity, but there hasn't been much agreement on Capitol Hill about what else to do (or frankly, funding that).

Many of the proposed initiatives focus on either helping hospitals meet cybersecurity standards or penalizing them if they suffer a cyberattack. But it's not yet clear what will take hold in Washington, as Mohana Ravindranath reports. Experts tell her that it'll depend on the upcoming election, how fast federal regulators can get their act together, and the amount of lobbying pressure health trade groups exert to ensure they're not penalized for being attacked.

Meanwhile, UnitedHealth is separately mulling the acquisition of a network of physician practices through another arm, Optum, the latest in its quest for growth. Experts tell Tara Bannow it's a complicated venture that could see the conglomerate getting more involved in hospitals' business operations.

2024 watch

Choose your fighter: 2024

Robert F. Kennedy Jr. announced Monday that he's made his way onto the ballot in his fifth state, North Carolina. While the independent candidate still has a long uphill battle against Biden and Trump, 22% of voters polled in December said he'd be their pick.

The N.C. ballot news comes days after RFK Jr. announced Silicon Valley veteran and pharmaceutical industry skeptic Nicole Shanahan as his running-mate, indicating that vaccine safety issues won't abate in the months ahead.

"Pharmaceutical medicine has its place, but no single safety study can assess the cumulative impact of one prescription on top of another prescription, and one shot on top of another shot on top of another shot, throughout the course of childhood," Shanahan said in her announcement speech. She also told Newsweek that she attributes her daughter's autism to "environmental toxins."

On the GOP ticket, President Trump hasn't picked a running mate yet, though K Street widely expects Sen. Tim Scott to be his front-runner, followed by South Dakota Gov. Kristi Noem. As a senator, Scott has promised to repeal the ACA and bring back high-risk insurance pools.

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