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A new vision for US health care

It’s not exactly what he’s best known for, but Alexander Hamilton helped develop the first national, compulsory health insurance policy in the world:…

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It’s not exactly what he’s best known for, but Alexander Hamilton helped develop the first national, compulsory health insurance policy in the world: a 1798 taxpayer-financed plan Congress approved to cover sick and disabled seamen. 

Credit: ©Porter Gifford Photography

It’s not exactly what he’s best known for, but Alexander Hamilton helped develop the first national, compulsory health insurance policy in the world: a 1798 taxpayer-financed plan Congress approved to cover sick and disabled seamen. 

“The interests of humanity are concerned in it,” Hamilton wrote. 

And they still are, as MIT Professor Amy Finkelstein notes in a new book. The U.S. has repeatedly tried to provide medical care for those who need it and cannot afford it. These efforts may have started with Hamilton, but they have continued through modern times, with policies that have mandated emergency-room care for all, and have extended insurance to those with certain serious illnesses.  

Then again, no policy has fully addressed the needs of the U.S. population. About 30 million U.S. citizens lack health insurance. Even for the insured, costs routinely exceed a plan’s benefits. Americans have $140 billion in unpaid medical debt, more than all other personal debt combined, and three-fifths of it is incurred by people with health insurance. 

That’s why Finkelstein is calling for a total overhaul of the U.S. health insurance system, in a new book with economist Liran Einav of Stanford University, “We’ve Got You Covered: Rebooting American Health Care,” published by Portfolio. In it, the scholars envision an approach with one layer of free and automatic health insurance for everyone, and another layer of private insurance for those seeking additional care amenities.  

“In the U.S., we have always had a commitment to do something when people are ill, so we might as well do it effectively and efficiently,” says Finkelstein, the John and Jennie S. MacDonald Professor in MIT’s Department of Economics. “I don’t think anyone would argue we have a wonderful, well-functioning health care system.”

Patchwork programs

Finkelstein has won the John Bates Clark Medal and received a MacArthur fellowship for empirical studies of health insurance and health care — including work on Medicaid and Medicare, the financial impact of being hospitalized, geographic variation in medical costs, and more. Finkelstein and Einav are also co-authors, with Ray Fisman, of the 2023 book, “Risky Business,” about the insurance industry.

Through two decades of intensive research, Finkelstein and Einav have also never advocated for specific health care policies — until now.

“We feel we do have something to say to the wider public about the problems, and also about the solution,” Finkelstein says. “We emphasize the problems of the insured, not only the uninsured.”

Indeed, around 150 million Americans rely on private employer-provided insurance. Yet they risk losing that insurance if they lose or change their job. Those with public health insurance, like Medicaid, face nearly the opposite problem. If a family member earns enough money to lift a household above the poverty line, they can lose eligibility. The net result: About one in four Americans under the age of 65 will be uninsured at some point in the next two years.

Many of them will actually be eligible for free or heavily discounted coverage. About 18 million Americans who are eligible for public health insurance remain unenrolled due to a lack of information and complicated signup procedures. And even Medicare, the workhorse public insurance program for many seniors, has out-of-pocket expenses with no cap. A quarter of people on Medicare spend a quarter of their income on health care. 

Some reforms have brought better coverage to more people. As the scholars note, the Affordable Care Act of 2010 (which MIT economist Jonathan Gruber helped develop) has allowed 10 million formerly uninsured Americans to gain coverage. But it didn’t change the risk of losing insurance coverage or of incurring large medical debt due to highly incomplete coverage.

The book contends the U.S. has used a long series of piecemeal policies to try to fix problems with health coverage in the U.S. One long-standing approach has been to create disease-specific care subsides, starting with a 1972 law extending Medicare to everyone with end-stage kidney disease. More recently, similar programs have been passed to cover patients with tuberculosis, breast and cervical cancer, sickle cell anemia, ALS, HIV/AIDS, and Covid-19. 

Finkelstein and Einav are skeptical of this approach, however, due to its patchwork nature. Passing separate laws for different illnesses will always leave holes in coverage. Why not just automatically include everyone? 

“When you think about covering all the gaps, that’s what universal basic coverage is,” Finkelstein says. 

Land of the free

As “We’ve Got You Covered” notes, the current U.S. approach to health insurance is hardly etched in concrete: Employer-provided health care really only dates to the 1950s. And, the authors emphasize, the way the U.S. keeps instituting policies to make basic care available to anyone — open emergency rooms, subsidies for severe disease treatments — is telling us that the country has a bottom-line expectation of providing humane care when most needed. 

“The reason why we have all these patches is that, hard as it is to believe, in the United States there is in fact a strong social norm, an unwritten social contract, that we don’t let people die in the streets,” Finkelstein says. “When people are in dire medical situations and don’t have resources, we inevitably as a society feel compelled to try to help them. The problems of the insured and the uninsured represent failures to achieve our commitments, not the lack of those commitments.”

To Finkelstein and Einav, then, the solution is to provide free, basic health care for everyone. No sign-up woes; enrollment would be automatic. No charges for basic care. No losing insurance if you leave your job. No falling off the public-insurance ranks if you climb above the poverty line. 

At the same time, they envision, the U.S. would have another layer of private health insurance, covering health care amenities — private hospital rooms, say, or other elective elements of medical care. “You can pay to upgrade,” Finkelstein says. 

That would not lead to the system of absolutely equal, universal care that some envision, but Finkelstein still believes it would improve the status quo.

“We have inequality in all aspects of our lives, and this is another,” Finkelstein says. “The key is to provide essential basic coverage.”

Could the U.S. afford a system of free, basic, automatic-enrollment health care? The book’s surprising answer is: Yes, absolutely. In the U.S., 18 percent of GDP is spent on health care. Half of that goes to public health care, and half on private care. As it happens, 9 percent of GDP is how much European countries spend on their public-care health systems. 

“We’re already paying for universal coverage in the United States, even though we’re not getting it,” Finkelstein says. “We’re already spending 9 percent of GDP on publicly financed health care. We certainly could do it at the same price tag as all these other countries.”

“We’ve Got You Covered” even comes out against modest co-pays (despite studies showing they reduce visits to doctors), finding them “in conflict with the rationale for universal coverage, namely, access to essential medical care without regard to [financial] need,” as Finkelstein says. 

Until the impossible becomes inevitable

If the Finkelstein-Einav health insurance system makes sense on the merits, though, does it have any chance of existing? 

“One thing that makes me, if not optimistic, then at least not unduly pessimistic, is that this is an argument that will and does appeal to people across the political spectrum,” Finkelstein contends. Expanding health insurance is usually associated with progressive politicians, but the book points to a series of conservatives who, even into the 21st century, have supported universal coverage.

Even if a change to a free system of basic care is not immediately in the offing, Finkelstein and Einav suggest in the book that their role, in writing “We’ve Got You Covered,” is something economist Milton Friedman suggested: Develop ideas and keep them in the public sphere until “the politically impossible becomes the politically inevitable.” 

And in the meantime, Finkelstein and Einav firmly suggest people take more seriously the way U.S. health care policy implicitly assumes we should help everyone. And for the same reasons Hamilton wanted to help seamen, namely, “to protect from want and misery” in their lives.

###

Written by Peter Dizikes, MIT News

Book: “We’ve Got You Covered: Rebooting American Health Care”

https://www.penguinrandomhouse.com/books/690632/weve-got-you-covered-by-liran-einav-and-amy-finkelstein/


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Glimpse Of Sanity: Dartmouth Returns Standardized Testing For Admission After Failed Experiment

Glimpse Of Sanity: Dartmouth Returns Standardized Testing For Admission After Failed Experiment

In response to the virus pandemic and nationwide…

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Glimpse Of Sanity: Dartmouth Returns Standardized Testing For Admission After Failed Experiment

In response to the virus pandemic and nationwide Black Lives Matter riots in the summer of 2020, some elite colleges and universities shredded testing requirements for admission. Several years later, the test-optional admission has yet to produce the promising results for racial and class-based equity that many woke academic institutions wished.

The failure of test-optional admission policies has forced Dartmouth College to reinstate standardized test scores for admission starting next year. This should never have been eliminated, as merit will always prevail. 

"Nearly four years later, having studied the role of testing in our admissions process as well as its value as a predictor of student success at Dartmouth, we are removing the extended pause and reactivating the standardized testing requirement for undergraduate admission, effective with the Class of 2029," Dartmouth wrote in a press release Monday morning. 

"For Dartmouth, the evidence supporting our reactivation of a required testing policy is clear. Our bottom line is simple: we believe a standardized testing requirement will improve—not detract from—our ability to bring the most promising and diverse students to our campus," the elite college said. 

Who would've thought eliminating standardized tests for admission because a fringe minority said they were instruments of racism and a biased system was ever a good idea? 

Also, it doesn't take a rocket scientist to figure this out. More from Dartmouth, who commissioned the research: 

They also found that test scores represent an especially valuable tool to identify high-achieving applicants from low and middle-income backgrounds; who are first-generation college-bound; as well as students from urban and rural backgrounds.

All the colleges and universities that quickly adopted test-optional admissions in 2020 experienced a surge in applications. Perhaps the push for test-optional was under the guise of woke equality but was nothing more than protecting the bottom line for these institutions. 

A glimpse of sanity returns to woke schools: Admit qualified kids. Next up is corporate America and all tiers of the US government. 

Tyler Durden Mon, 02/05/2024 - 17:20

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Four burning questions about the future of the $16.5B Novo-Catalent deal

To build or to buy? That’s a classic question for pharma boardrooms, and Novo Nordisk is going with both.
Beyond spending billions of dollars to expand…

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To build or to buy? That’s a classic question for pharma boardrooms, and Novo Nordisk is going with both.

Beyond spending billions of dollars to expand its own production capacity for its weight loss drugs, the Danish drugmaker said Monday it will pay $11 billion to acquire three manufacturing plants from Catalent. It’s part of a broader $16.5 billion deal with Novo Holdings, the investment arm of the pharma’s parent group, which agreed to acquire the contract manufacturer and take it private.

It’s a big deal for all parties, with potential ripple effects across the biotech ecosystem. Here’s a look at some of the most pressing questions to watch after Monday’s announcement.

Why did Novo do this?

Novo Holdings isn’t the most obvious buyer for Catalent, particularly after last year’s on-and-off M&A interest from the serial acquirer Danaher. But the deal could benefit both Novo Holdings and Novo Nordisk.

Novo Nordisk’s biggest challenge has been simply making enough of the weight loss drug Wegovy and diabetes therapy Ozempic. On last week’s earnings call, Novo Nordisk CEO Lars Fruergaard Jørgensen said the company isn’t constrained by capital in its efforts to boost manufacturing. Rather, the main challenge is the limited amount of capabilities out there, he said.

“Most pharmaceutical companies in the world would be shopping among the same manufacturers,” he said. “There’s not an unlimited amount of machinery and people to build it.”

While Novo was already one of Catalent’s major customers, the manufacturer has been hamstrung by its own balance sheet. With roughly $5 billion in debt on its books, it’s had to juggle paying down debt with sufficiently investing in its facilities. That’s been particularly challenging in keeping pace with soaring demand for GLP-1 drugs.

Novo, on the other hand, has the balance sheet to funnel as much money as needed into the plants in Italy, Belgium, and Indiana. It’s also struggled to make enough of its popular GLP-1 drugs to meet their soaring demand, with documented shortages of both Ozempic and Wegovy.

The impact won’t be immediate. The parties expect the deal to close near the end of 2024. Novo Nordisk said it expects the three new sites to “gradually increase Novo Nordisk’s filling capacity from 2026 and onwards.”

As for the rest of Catalent — nearly 50 other sites employing thousands of workers — Novo Holdings will take control. The group previously acquired Altasciences in 2021 and Ritedose in 2022, so the Catalent deal builds on a core investing interest in biopharma services, Novo Holdings CEO Kasim Kutay told Endpoints News.

Kasim Kutay

When asked about possible site closures or layoffs, Kutay said the team hasn’t thought about that.

“That’s not our track record. Our track record is to invest in quality businesses and help them grow,” he said. “There’s always stuff to do with any asset you own, but we haven’t bought this company to do some of the stuff you’re talking about.”

What does it mean for Catalent’s customers? 

Until the deal closes, Catalent will operate as a standalone business. After it closes, Novo Nordisk said it will honor its customer obligations at the three sites, a spokesperson said. But they didn’t answer a question about what happens when those contracts expire.

The wrinkle is the long-term future of the three plants that Novo Nordisk is paying for. Those sites don’t exclusively pump out Wegovy, but that could be the logical long-term aim for the Danish drugmaker.

The ideal scenario is that pricing and timelines remain the same for customers, said Nicole Paulk, CEO of the gene therapy startup Siren Biotechnology.

Nicole Paulk

“The name of the group that you’re going to send your check to is now going to be Novo Holdings instead of Catalent, but otherwise everything remains the same,” Paulk told Endpoints. “That’s the best-case scenario.”

In a worst case, Paulk said she feared the new owners could wind up closing sites or laying off Catalent groups. That could create some uncertainty for customers looking for a long-term manufacturing partner.

Are shareholders and regulators happy? 

The pandemic was a wild ride for Catalent’s stock, with shares surging from about $40 to $140 and then crashing back to earth. The $63.50 share price for the takeover is a happy ending depending on the investor.

On that point, the investing giant Elliott Investment Management is satisfied. Marc Steinberg, a partner at Elliott, called the agreement “an outstanding outcome” that “clearly maximizes value for Catalent stockholders” in a statement.

Elliott helped kick off a strategic review last August that culminated in the sale agreement. Compared to Catalent’s stock price before that review started, the deal pays a nearly 40% premium.

Alessandro Maselli

But this is hardly a victory lap for CEO Alessandro Maselli, who took over in July 2022 when Catalent’s stock price was north of $100. Novo’s takeover is a tacit acknowledgment that Maselli could never fully right the ship, as operational problems plagued the company throughout 2023 while it was limited by its debt.

Additional regulatory filings in the next few weeks could give insight into just how competitive the sale process was. William Blair analysts said they don’t expect a competing bidder “given the organic investments already being pursued at other leading CDMOs and the breadth and scale of Catalent’s operations.”

The Blair analysts also noted the companies likely “expect to spend some time educating relevant government agencies” about the deal, given the lengthy closing timeline. Given Novo Nordisk’s ascent — it’s now one of Europe’s most valuable companies — paired with the limited number of large contract manufacturers, antitrust regulators could be interested in taking a close look.

Are Catalent’s problems finally a thing of the past?

Catalent ran into a mix of financial and operational problems over the past year that played no small part in attracting the interest of an activist like Elliott.

Now with a deal in place, how quickly can Novo rectify those problems? Some of the challenges were driven by the demands of being a publicly traded company, like failing to meet investors’ revenue expectations or even filing earnings reports on time.

But Catalent also struggled with its business at times, with a range of manufacturing delays, inspection reports and occasionally writing down acquisitions that didn’t pan out. Novo’s deep pockets will go a long way to a turnaround, but only the future will tell if all these issues are fixed.

Kutay said his team is excited by the opportunity and was satisfied with the due diligence it did on the company.

“We believe we’re buying a strong company with a good management team and good prospects,” Kutay said. “If that wasn’t the case, I don’t think we’d be here.”

Amber Tong and Reynald Castañeda contributed reporting.

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Petrina Kamya, Ph.D., Head of AI Platforms at Insilico Medicine, presents at BIO CEO & Investor Conference

Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb….

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Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb. 26-27 at the New York Marriott Marquis in New York City. Dr. Kamya will speak as part of the panel “AI within Biopharma: Separating Value from Hype,” on Feb. 27, 1pm ET along with Michael Nally, CEO of Generate: Biomedicines and Liz Schwarzbach, PhD, CBO of BigHat Biosciences.

Credit: Insilico Medicine

Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb. 26-27 at the New York Marriott Marquis in New York City. Dr. Kamya will speak as part of the panel “AI within Biopharma: Separating Value from Hype,” on Feb. 27, 1pm ET along with Michael Nally, CEO of Generate: Biomedicines and Liz Schwarzbach, PhD, CBO of BigHat Biosciences.

The session will look at how the latest artificial intelligence (AI) tools – including generative AI and large language models – are currently being used to advance the discovery and design of new drugs, and which technologies are still in development. 

The BIO CEO & Investor Conference brings together over 1,000 attendees and more than 700 companies across industry and institutional investment to discuss the future investment landscape of biotechnology. Sessions focus on topics such as therapeutic advancements, market outlook, and policy priorities.

Insilico Medicine is a leading, clinical stage AI-driven drug discovery company that has raised over $400m in investments since it was founded in 2014. Dr. Kamya leads the development of the Company’s end-to-end generative AI platform, Pharma.AI from Insilico’s AI R&D Center in Montreal. Using modern machine learning techniques in the context of chemistry and biology, the platform has driven the discovery and design of 30+ new therapies, with five in clinical stages – for cancer, fibrosis, inflammatory bowel disease (IBD), and COVID-19. The Company’s lead drug, for the chronic, rare lung condition idiopathic pulmonary fibrosis, is the first AI-designed drug for an AI-discovered target to reach Phase II clinical trials with patients. Nine of the top 20 pharmaceutical companies have used Insilico’s AI platform to advance their programs, and the Company has a number of major strategic licensing deals around its AI-designed therapeutic assets, including with Sanofi, Exelixis and Menarini. 

 

About Insilico Medicine

Insilico Medicine, a global clinical stage biotechnology company powered by generative AI, is connecting biology, chemistry, and clinical trials analysis using next-generation AI systems. The company has developed AI platforms that utilize deep generative models, reinforcement learning, transformers, and other modern machine learning techniques for novel target discovery and the generation of novel molecular structures with desired properties. Insilico Medicine is developing breakthrough solutions to discover and develop innovative drugs for cancer, fibrosis, immunity, central nervous system diseases, infectious diseases, autoimmune diseases, and aging-related diseases. www.insilico.com 


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