The Biggest stories of 2015

France attacksDecember 31, 2015- by Steven E. Greer, MD

2015 was the year of ISIS. The radical jihadist group started the year with an attack in France, then followed it up monthly with numerous other attention-seeking stunts, such as mass beheadings of Christians in Egypt. It all culminated in an attack on U.S. soil in December in San Bernardino, California.

Russia was also a troublemaker, with Vladimir Putin expanding his aggression from the invasions of the Ukraine and Crimea to putting Russian planes and troops in Syria. His real goal was to prop of the failing regime of al-Assad, but he claimed to be in Syria to fight ISIS.

In financial news, the collapse of the price for oil, down to $30 per barrel, is causing the strong dollar, hurting Russia and Saudi Arabia, while helping out the American consumer. As the economy remained strong, the Federal Reserve raised interest rates for the time in almost a decade. In Europe, the risk that Greece would default and trigger more countries to become insolvent was finally addressed, and Greece seems to be no longer a problem. Elsewhere, the stock markets in China imploded and Iran is poised to see an economic recovery due to the deal championed by President Obama to have Iran limit its efforts to develop a nuclear weapons in exchange for the lifting of crippling sanctions.

In healthcare news, the price gouging by generic and orphan drug makers came to a critical mass causing the senate to investigate many companies, with Valeant Pharmaceuticals being the lead target. The new life-saving cures for Hepatitis C drugs, such as Sovaldi, were singled out the most by congress.

As the year ended, a new poster child for price gouging emerged in the form of Martin Shkreli. A failed hedge fund manager who started a bogus “drug company” called Turing Pharmaceutical, he jacked up the price of HIV drug Daraprim by 5000%. He was arrested in December by federal prosecutors for running a Ponzi scheme.

It was the biggest year for M&A in history, and the healthcare sector was not excluded. The Fed’s zero-interest rate policy fueled much of the activity.

To counter the high drug costs mentioned above, PBM’s merged to gain more leverage on the drug makers. CVS acquired Omnicare, and UnitedHealth acquired Catamaran’s PBM business. Drug retailers also bulked up, with Walgreens planning to merge with Rite Aide.

Hospital mergers became a concern to regulators. The FTC is investigating some, fearing that their pricing power would lead to even greater inflation. Likewise, mega-mergers of the insurers, such as the UnitedHealth and Cigna deal, might be blocked by the FTC.

The inflation in healthcare costs is threatening the very existence of Obamacare. The average increase in premiums for the ACA exchange plans was 7.5%, causing many individuals to drop out after only one year of coverage. UnitedHealth threatened to stop participating in the exchanges, which would lead to other insures leaving as well.

Few new therapies made the list of “biggest Stories” for 2015. In medical devices, TAVR took off with the launch of Sapien 3. In biotech, the launch of Zarxio, the first biosimilar, was a watershed moment, and the PCSK9 cholesterol lowering antibody drugs promised to be the next blockbusters.

Many of these same issues will dominate the news in 2016 as the presidential election cycle kicks into high gear. Look for congress and the executive branch to find clever ways to curb drug prices without actually allowing CMS to negotiate prices, for the PCSK9 drugs to be the next Hepatitis C drugs in terms of focus on drug costs, and for Obamacare to be dealt a major setback when insurers stop participating.

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