Axios Vitals

A briefcase with a red cross on the front.
February 06, 2020

Good morning.

Today's word count is 671, or a 2-minute read.

1 big thing: Trump's latest boost for Medicare Advantage

President Trump with CMS Administrator Seema Verma
President Trump and CMS administrator Seema Verma. Photo: Alex Wong/Getty Images

The Trump administration yesterday announced more changes designed to make Medicare Advantage more appealing and to lower prescription drug costs for seniors.

Why it matters: Although the proposal mainly tinkers around the edges, it could have a meaningful impact on some seniors' pocketbooks while furthering the administration's commitment to Medicare Advantage, a cash cow for insurers.

Details: The proposal aims to create more transparency within Medicare's prescription drug benefit, and to enhance price competition.

  • Beginning in 2022, plans would be required to give beneficiaries tools to compare the out-of-pocket costs of different drugs, which would allow patients to know their drug costs ahead of time and to shop around for the cheapest medications.
  • The proposal also aims to create more price competition among specialty drugs, which tend to be the most expensive drugs on the market.

It also would allow all seniors with end-stage renal disease to enroll in Medicare Advantage, beginning in 2021.

  • Medicare Advantage beneficiaries this year are gaining access to telehealth benefits that aren't available to seniors enrolled in traditional fee-for-service Medicare, and the new proposal would build on these benefits.

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2. See no Bernie, hear no Bernie

Sen. Bernie Sanders still may eke out a win in Iowa, and is the consensus front-runner in New Hampshire.

  • But most venture capitalists investing in America's health care industry — the primary target of Bernie's ire — have shoved their heads so deep in the sand that they've found water, Axios' Dan Primack writes.

Why it matters: At some point, it could become a failure of fiduciary duty.

Health care accounts for over 20% of all U.S. venture activity.

  • A majority of that is in biotech/pharma, which last year saw 866 deals raise around $16.6 billion.
  • Investors view many of those deals as binary: Either the drug doesn't work, resulting in a total write-off, or it does work and the financial sky's the limit. Strike out or grand slam.
  • Sanders pledges to limit the upside, either by limiting drug prices under the current system or (if he gets Medicare for All) by establishing a single, centralized buyer.

Few health care VCs Dan spoke with are working on a Plan B in the event of their risk/reward models being made obsolete. Three main reasons:

  1. They don't believe Sanders will win.
  2. Even if he does win, they don't believe Sanders will get Medicare for All.
  3. If Sanders wins and implements his full plan, then it's such a revolutionary shift that there's not much health care VCs can do to counter it.

The bottom line: For now, health care venture's strategy is see no Bernie, hear no Bernie. We'll see how long that's viable.

3. States can test for coronavirus themselves

The Centers for Disease Control and Prevention has shipped the diagnostic test for the novel coronavirus to more than 100 public health labs nationwide, allowing states to test for coronavirus cases themselves and receive results quicker, Axios' Marisa Fernandez writes.

Why it matters: The FDA bypassed usual regulatory channels to distribute the test under an Emergency Use Authorization, which has been used in life-threatening situations like MERS, Ebola and the Zika virus.

  • Before, specimens from all over the country had to be shipped to Atlanta to have their suspected cases validated. 
  • "This continues to be an evolving situation and the ability to distribute this diagnostic test to qualified labs is a critical step forward in protecting the public health," FDA commissioner Stephen Hahn said.

4. The latest cancer breakthrough

An international collaboration of scientists announced yesterday they have mapped out the cancer genome and also developed a new method of "carbon dating" cancer tumors to determine what and when mutations occurred that led to a person's cancer, Axios' Eileen Drage O'Reilly reports.

Why it matters: This meta-analysis of the whole genome is the first building block of a knowledge base that the scientists hope will help clinicians determine the precise treatment needed by individual patients — assuming the costs of sequencing and running algorithm programs continue to decline.

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5. A big week for vaping

Two photos showing vaping executives in 2020 and tobacco executives in 1994.
Photos: Mandel Ngan/AFP via Getty Images/New York Times archives

On the left: Executives from Juul, Reynolds, NJOY, Fontem and Logic in a Congressional hearing Tuesday, answering questions about the millions of teenagers addicted to nicotine.

On the right: Big Tobacco executives in April 1994 testified they didn't believe that cigarettes were addictive, "but that they would rather their own children did not smoke," per NYT.

Between the lines: There are huge differences between the two events, but it's still striking that more than 25 years later, we're once again reckoning with nicotine's threat to children.

Catch up fast, thanks to Marisa: