Federal Funds Can — And Will — Be Used To Subsidize Federal Exchanges: Condor’s Unsurprising Predictions Dept.

July 23, 2014 - Leave a Response

Of course, the marginalia — the drafting oversight — ought to be corrected, and of course, the Supremes will likely issue an opinion to that effect. But the black letter law in almost all analogous situations is pretty clear: the IRS may interpret federal revenue and expenditure laws, and issue regulations reasonably implementing the will of our Congress. That it has done.

With the Fourth Circuit (upholding — with mostly Democrat appointees on the panel), and the DC Circuit (nullifying — in an all Bush 41 and 43 appointed panel) issuing directly contradictory opinions within hours of one another yesterday, I predict (unsurprisingly) the Supremes will have to take the case.

Also unsurprisingly, the Supremes will — I predict — take the Fourth Circuit’s opinion, nearly verbatim, as black letter law. The IRS plainly possesses the regulatory and rule-making power to make the laws of Congress work in what it sees as a reasonable way. Once a court concludes that “Congress’s intent in enacting [a specific provision] was not so clear as to foreclose any other interpretation“, then the IRS’s interpretation is to be given a wide berth.

The IRS has determined that it was an oversight in Congressional drafting, to suggest that federal money could not be used to fund subsidies for federal health exchange participants. And that determination is plainly a reasonable one — one which furthers Congress’s stated intent, in passing the ACA of 2010. Game — effectively over (but it will be late 2015, before the Supremes offer a published opinion, here).

A bit of the New York Times on it, this morning — do go read it all:

. . . .”You don’t need a fancy legal degree to understand that Congress intended for every eligible American to have access to tax credits that would lower their health care costs, regardless of whether it was state officials or federal officials who were running the marketplace,” said Josh Earnest, the White House press secretary. “I think that is a pretty clear intent of the congressional law. . . .”

[Fourth Circuit] Judge Gregory said, the administration’s position helps achieve “the broad policy goals” of the Affordable Care Act. “The economic framework supporting the act would crumble if the credits were unavailable on federal exchanges,” he said. . . .

In a concurring opinion, Judge Andre M. Davis, a senior judge on the appeals court, said the plaintiffs’ argument “would effectively destroy the statute.” It would, he said, “deny to millions of Americans desperately needed health insurance through a tortured, nonsensical construction” of the law. Judge Davis and the other judge on the panel, Stephanie D. Thacker, were appointed by Mr. Obama.

The health law authorized subsidies specifically for insurance bought “through an exchange established by the state.”
When the law was adopted, Mr. Obama and congressional Democrats assumed that states would set up their own exchanges. But many Republican governors and state legislators balked, and opposition to the law became a rallying cry for the party.

The lawsuit in Washington, championed by conservative and libertarian groups, was filed by people in states that use the federal exchange: Tennessee, Texas, Virginia and West Virginia. They objected to being required to buy insurance, even with subsidies to help defray the cost. . . .

I run — again — the graphic of that goof-in-chief, Ted Cruz (R), as he is among the named amici submitting briefs to overrule the IRS’s interpretation of this provision of the ACA of 2010. He is one lost soul. And what to make of Governors Perry and Haslam, among otehrs? They tell the poorest people in their state — as your leader, I will not allow you to receive federal funds, to defray 95 per cent of your health costs — and as your leader, I will provide almost no state coverage for you. There used to be a term for that, on fuedal Europe — it was aristocratic robber-king. And we know what the peasants’ next move was. Right? Right. But here in the colonies, beheadings are now frowned upon. So, vote these jokers — out of office. They have betrayed their own people. Just my $0.02.

Merck’s Idenix Cash Tender Offer Clears US Antitrust Review: Hart Scott Waiting Period Popped July 18, 2014

July 22, 2014 - Leave a Response

Still very-likely a Q3 2014 closing — on time, and on target, for this all cash offer for all the shares of Idenix.

From the as amended SEC tender-offer filing (formerly called a Williams Act filing, by old schoolers!), then — a bit:

. . . .At 11:59 p.m., Eastern time, on July 18, 2014, the waiting period applicable to the Offer and the Merger under the HSR Act expired. Accordingly, the condition of the Offer relating to the expiration or termination of the HSR Act waiting period has been satisfied. . . .

Just like that, the potential (and negotiating strategy) for a Gilead patent royalty payment on Sovaldi® — its multi-billion dollar titan Hep C drug (the most successful drug launch in history, even adjusted for inflation) is now. . . (as of the closing of the Idenix deal) pretty well consolidated into the very capable hands of Merck’s lawyer-chairman. Smart move.

[Preliminary] Merck Spent $1.33 Million On Lobbying, In Q2 2014 — $3.75 Million Through First Half Of 2014 — 50 Percent Off, Compared To 2013

July 22, 2014 - Leave a Response

I’ll update this when the final tally is in (likely later this week), but through 2 pm EDT today, Merck is at $1.33 million. Moreover, just as was true in the first quarter of 2014 — this year is running at about half of what the 2013 lobby spend levels were.

Merck had lobbying underway on (among other matters):

. . . .Alzheimer’s education (no specific bill); 340B (no specific bill); National Diabetes Clinical Care Commission Act (H.R. 1074, S. 539); Eliminating Disparities in Diabetes Prevention, Access and Care Act (H.R. 3322); Hepatitis C education (no specific bill); adult vaccine policies (no specific bill); medication adherence (no specific bill); DISARM (H.R. 4187). . . .

Comprehensive tax reform (no specific bill); transfer pricing of intangibles (no specific bill); territorial tax system (no specific bill); deferral of taxation of foreign earned income (no specific bill); tax base erosion (no specific bill); R&D tax credit (no specific bill). . . .

Non-interference in Medicare Part D (no specific bill); Medicaid-style rebates in Medicare Part D (no specific bill); Low Income Subsidy Copays in Part D (no specific bill); Independent Payment Advisory Board (S. 351, H.R. 351); sustainable growth rate (H.R. 4302). . . .

Trans-Pacific Partnership (no specific bill); biologic data exclusivity (no specific bill); trade promotion authority (no specific bill); treatment of intellectual property in India (no specific bill); Playing Fair on Trade and Innovation Act (HR 3167); additives in beef cattle (no specific bill); trade adjustment assistance (no specific bill); international trade barriers for beta-agonists (no specific bill). . . .

Deficit reduction (no specific bill); ADAP funding (no specific bill); omnibus appropriations; Patent reform (H.R. 3309, S. 1720 ); education on beta agonists (no specific bill). . . .

Now you know. More on the final numbers, soon.

Scholl Non-Americas Rights “Mystery”, Clarified: Thanks To A Commenter!

July 21, 2014 - Leave a Response

It is truly. . . a gift that so many smart, well-informed, long tenured insiders read this goofy little corner of the pharma/life sciences sector chronicle. Within minutes of my mentioning the Scholl/Reckitt deal, a commenter had provided the whole back-story.

I just couldn’t get to it until now, due to other responsibilities. [And, perhaps immodestly, I wanted to honor the commenter's effort, with a custom graphic. Check!] So, the Scholl ex-Americas shoe rights went out of Schering-Plough in the 1980s, per the commenter. Nice catch!

Specifically, per my truly-enlightened help: The Reckitt purchase was not recent. Bob Luciano, Chairman of SPG at the time, divested the Scholl business outside North America in 1987 to Seton Healthcare which became Seton Scholl Ltd and the SSL International. Schering-Plough later bought back a small piece of the international footcare (non shoe) business in Latin America and maybe another market. Reckitt bought SSL International in 2010. I had thought their Scholl international business and desire to globalize it might have been a significant driver in their chase of the Merck Consumer Care business at the higher prices. — /s/ Anonymous @ July 21, 2014 at 11:45 AM. . . .

That fills in all the gaps, nicely! Thanks so much. I had no idea — just started following SGP around 2007. From a July 2010 Wall Street Journal blog posting then — that Reckitt 2010 deal — acquiring SSL International PLC:

. . . .It’s no secret that consumer health care is hot, but Reckitt Benckiser Group PLC’s proposed £2.5 billion offer for SSL International PLC has just slapped a massive 18.6x Ebitda multiple on the sector. . . .

So, now you know. Thanks Anon.! G’night, all.

Did I Miss A Beat, Here? Scholls (Non-US) Rights Belonged To Reckitt Benckiser? Who Knew?!

July 21, 2014 - Leave a Response

Back in November of 2009, I suggested that rumors about Dr. Scholl’s going to Reckitt seemed. . . unlikely.

Apparently, at some point recently, Reckitt acquired the non-Americas rights to the brand. Now Reckitt is selling those same rights on, to a private equity buyer. So, either I missed a step (an intervening sale — in 2009 to 2013 timeframe), or this is a new transfer. No matter, Reuters has it all, this morning.

Of course, the US — and rest of the Americas — rights will belong to Bayer, as agreed this spring. Per Reuters, then:

. . . .German private equity firm Aurelius said on Monday it is buying Reckitt Benckiser’s Scholl shoe business in its efforts to expand internationally, betting on the brand’s growth potential.

Under the agreement, Aurelius would acquire the international rights for the Scholl footwear business, excluding North and South America.

The rights to that business in the Americas will go to German drugmaker Bayer as part of its $14 billion purchase of Merck & Co’s consumer health business.

Aside from the Scholl shoe business, which is known for its focus on comfort, Reckitt Benckiser has a Scholl-branded footcare business that includes insoles and blister bandages. . . .

The cash Merck got for these legacy Schering-Plough Scholls lines is simply fantastic. Top dollar. Really a coup for Mr. Frazier, at those high valuations. So. . . Onward!

So — That Smallpox Story? Not So Uncommon, It Would Seem: NYT

July 20, 2014 - Leave a Response

Last Friday night, we talked about extremely dangerous smallpox vials — forgotten for a half-century, and apparently left entirely unsecured — in a cardboard shoe-box.

If we are to believe The New York Times – and there is really no reason not to — the occurence is not as isolated as we might hope. In fact (stoking some of our worst fears), it turns out that some scientists around the globe are actively researching ways to make such deadly viruses. . . even more communicable. And these are not crazed military “weaponizing” researchers — in labs in North Korea, or Putin’s Russia. No, these are ostensibly respectable researchers whose mission it is to figure out how, and why, a given viral strain might mutate into a global killer and be easily transmitted in open air. Or on open waterways. Truly creepy stuff. Do go read it all but here is a bit:

. . . .The recent mistakes at federal labs have opened the door to a much broader criticism of the risks posed by the expanding research into risky pathogens, especially the efforts to create dangerous strains of flu not currently circulating, or to manipulate already deadly flu viruses to make them more contagious.

Researchers who conduct that work, sometimes labeled “gain of function” research, say its purpose is, in part, to help scientists recognize changes in natural viruses that may help predict which ones are becoming more deadly or more contagious. But it provoked a public outcry in 2011 because of fears that a lab accident might release the altered viruses and start a lethal pandemic.

The studies were halted for about a year while governments and research organizations tried to develop safety rules, but the work has since resumed in several laboratories. . . .

What do you think? Is “gain of function” — even in truly lethal viral loads — something we ought to be studying? Is the risk of a mishap worth the benefit of some future possible insight — that might help us eradicate such an outbreak? I am willing to be convinced, but I lean toward shutting this research down. We do know that weaponizing research is very likely underway in some nefarious labs in North Korea.

Will this competing research provide the defense, should such a weapon be used in the wild? I am puzzled, and more than a little concerned by the whole idea of it. You?

NEJM Formally Publishes Tredaptive Results We Reported In December of 2012 — “Niacin Clanks” Chronicles

July 18, 2014 - Leave a Response

Truthfully, this scarcely qualifies as news. But it has been a slow summer dog’s week around Whitehouse Station. These results were first released, on a top line basis, in December of 2012. And we covered them. But the message is clear: Niacin plus laropiprant is probably a dead letter — and often exhibits a side-effect profile that should not be considered an acceptable risk. [Additional March 2013 vintage background here.] To be sure, it has taken a while — for Merck’s science speakers to come around to this plainly majority view. But it is definitive, now (even if the possibility of infections hadn’t been seen — the lack of outcomes benefit should be the end, all by itself).

From the Monthly Prescribing Reference, then — a bit:

. . . .Extended-release niacin with laropiprant does not reduce the risk of major vascular events in adults with vascular disease; and extended-release niacin may be associated with increased risk of certain serious adverse events, according to research published in the July 17 issue of the New England Journal of Medicine. . . .

“The findings concerning certain serious adverse infectious events associated with niacin have not been previously reported,” Anderson and colleagues write. . . .

Go find a summer adventure this weekend — I certainly intend to!

UPDATE: Google Gets A Highly Credible Partner — In Novartis/Alcon — To Develop Its Glucose Monitoring Contact Lenses

July 15, 2014 - Leave a Response

Back around Rev. Dr. Martin Luther King Day 2014, we highlighted a then-nascent Google-hardware project. Well, those folks at Google don’t just sit around — on good ideas.

Overnight, we learn that Novartis has signed on to help bring the concept to market. [Recall that Novaris now owns Alcon, here.] The current iteration will continuosly monitor sugar levels in tear-flow. Later versions may well adjust the contacts’ optics, via microelectric charges, to sharpen the focus of diabetes patients’ vision — in near real time, via bluetooth, based on the sugar readings. Amazing. Via the British Globe and Mail online, then:

. . . .Swiss drugmaker Novartis has struck an agreement with Google to develop “smart” contact lenses that would help diabetics track their blood glucose levels or restore the eye’s ability to focus.

The device for diabetics would measure glucose in tear fluid and send the data wirelessly to a mobile device, Novartis said. The technology is potentially life-changing for many diabetics, who prick their fingers as many as 10 times daily to check their body’s production of the sugar. . . .

Yes, the future arrives — right now. Is MRL up to the accelerating challenges — of eye-blinking innovation — and complex partnerships — all in one? We shall see.

As Predicted Right Here, Zilmax® Not To Return To US Market Until 2015 (At The Earliest).

July 14, 2014 - Leave a Response

It would seem that — as I predicted, in March and April of 2014 — Merck will NOT be able to reintroduce zilpaterol before 2015, in the US. It further seems that Tyson and Cargill have repeatedly indicated they won’t buy (from the feedlots) the supposed 250,000 head of cattle which were to be fed Zilmax® — as part of the reintroduction study. But candidly, that was pretty clear, even last Fall. [More background here.]

From tonight’s online Wall Street Journal, then — do go read it all:

. . . .Merck has delayed plans to begin its field evaluation because of continued unease among Cargill Inc., JBS SA, Tyson and other meatpackers about animal welfare, as well as some packers’ reluctance to try to market the beef that would be produced during the research, according to people familiar with the matter.

Merck confirmed the study has encountered setbacks. “This has become more time-intensive than we anticipated,” said David Yates, a Merck manager who helped design the planned study. He declined to discuss details of negotiations with meatpackers, but said: “We continue to work on the process to make sure we have alignment with all parties.”

The research requires the support of feedlot operators, which fatten cattle for slaughter, and the meatpackers that buy and process them into steaks and ground beef. The three-largest U.S. beef processors — Tyson Foods Inc., Brazil-based JBS and Cargill — account for about 60% of total production, according to industry estimates. JBS also operates one of the world’s largest feedlot operations in the U.S.

Mr. Yates declined to specify a new target time period to begin testing Zilmax on cattle. . . .

While the brand sold about $156 million in 2012 — its last full year on-market in the US — I’d not expect anything like that, should it come back in the US, in 2015. Even at double that — or $300 million — it would remain definitively immaterial to Mother Merck. So it may well be that Merck will concede this market to Lilly (via its Elanco Optaflexx® brands) — as the clear No. 1 leader, in the US space, now.

O/T Mondays: What Might Have Become, Of Roger Ebert — Had He Taken Frost’s “Path Less Traveled”?

July 14, 2014 - Leave a Response

A flick I saw over the weekend (actually, a documentary on the quiet, peaceful end — to Roger Ebert’s life, back in 2013) has put me in mind of “paths less traveled“. . . . some 50 years on, now.

If you don’t yet know what happened in Birmingham, Alabama, on an early Sunday morning, at the 13th Street Baptist Church — in mid September 1963 — do go find out. Or watch Spike Lee’s “4 Little Girls“.

. . . .[Roger Ebert: ] The children of Birmingham did not really die in the State of Alabama, however, because Alabama is a state of mind, and in the minds of the [white] men who rule Alabama, those children had never lived. . . .

The governor [of Alabama], whose demented attempt to prove himself a white man, has ended in the demonstration that he may not wholly be a man at all, deserves not even pity. His life is his own to live, and his nights are his to sleep, if he can. . . .

And it happened in Alabama to children we did not know and would never have known. But because they died, it happened to us. And the blood is on our hands, because every one of us owed to those children a future. . . .

Their blood is on so many hands, that history will weep in the telling. . . . And it is not new blood. It is old, so very old. . . . It clings and waits, and in its turn, it kills again. . . .

Now click the image, at right — to read the rest of what a then only 20 year old Roger Ebert (as Editor in Chief of the Daily Illini) was thinking, of it all.

His artistic and rhetorical reach here is. . . astonishing. Oh my.

What might have been. . . . not that he didn’t lead an amazing life, as it was.

Just. . . what if he had focused on politics. . . or civil rights, as a principal avocation? What if? Here is the full PDF of that day’s paper (see page 8).

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