Current medical news and unique business news for anyone who cares about the healthcare industry.
State of the Union recap. As promised, President Obama only briefly touched on healthcare during the State of the Union. However, the talk includes some big announcements, including word that the president will embrace tort reform and cut some of the additional reporting required in the healthcare reform law. But there was both skepticism and resistance over Obama’s tort reform pledge.
You can read reaction — or subtle lack of a response — from the usual suspects: PhRMA, AMA and BIO.
Missteps in Health IT investing. A breakdown on healthcare venture capital investing, with a telling statement on Health IT.
Because of this trend, healthcare investors have become like hunters on the African safari, stalking fewer “big game” deals with bigger “elephant gun”-sized investment minimums and exit requirements. One reason that this has been possible is that certain segments of healthcare – the pharma market, for example, at a CAGR of 10.1% – have expanded even faster than VC fund size.
Healthcare IT, however, is less like the African safari and more like the Amazon rain forest – a dense ecosystem filled with a huge number of small animals. The market isn’t suited to produce elephant-sized absolute returns – it is suited to have a high volume of smaller companies that produce more frequent and smaller returns than device or biotech.
Thus, you get the problem of the elephant gun in the rain forest: firms and funds are structured for fewer and larger investments to yield large absolute returns in markets like devices and biotech, but the healthcare IT market is suited for more numerous investments that yield high relative returns but relatively small absolute returns.
New FDA guidance for pharma. The U.S. Food and Drug Administration has revised its guidance on process validation and the changes “could be huge.”
Best cities for hospital care. HealthGrades released its list of the 50 best cities for hospital care. West Palm Beach, Florida, was first, followed in order by Brownsville, Texas; Dayton, Ohio; Minneapolis-St. Paul, Minnesota; and Tucson, Arizona.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Defending Kenneth Frazier. The failure of vorapaxar is not the fault of Merck’s CEO.
Dealflow and more. Amgen acquired BioVex for $1 billion; brain therapy device company Nexstim raised $15.4 million; protein-based biotech Promosome raised $4.1 million; medical genetics company RainDance Technologies raised $37.5 million; telehealth business Teladoc raised $4 million.
A proposal to redesign medical data. Wired’s Executive Editor Thomas Goetz urges creating a way to use medical data to empower people to change their behavior.
