PwC's Health Research Institute Identifies the Top 10 Health Industry Issues for 2014

Consumers tell HRI they do not believe expensive medical treatment means better quality, and that their use of mobile devices for healthcare applications is growing rapidly.

Full press release below.

SOURCE:  PwC Health Research Institute

NEW YORK, Dec. 11, 2013 /PRNewswire/ -- Implementation of the Affordable Care Act (ACA) is only one of the factors forcing a rapid reshaping of the $2.8 trillion U.S. healthcare industry in 2014 according toPwC's Health Research Institute (HRI). In its annual report on the Top Health Industry Issues for 2014 , released today, PwC's HRI identifies the top 10 issues facing the U.S. health sector this year, including the need to adjust to empowered consumers, rapid innovation, and increasing competition from non-traditional players. The report includes the results of a survey of 1,000 U.S. consumers and interviews with health industry leaders that provide insights into the emerging new health economy.

The report notes that much of the health industry has accepted that reform is here to stay – and forward-looking executives are making decisions based on a post-ACA landscape that has altered the provision of insurance and the delivery of care.

According to HRI, 10 issues stand out as the top focus for the health industry in the year ahead:

• Price transparency is growing as purchasers – consumers and employers – are demanding and receiving more information on cost and quality
• Employers are exploring new health insurance options through private exchanges
• New regulation aims to eliminate counterfeit medications in the drug supply chain
• States are turning to managed care to help contain Medicaid long-term care costs
• All healthcare companies need to rethink their roles and business models in the new health economy
• Healthcare companies will need to change their rules on innovation — embrace "fail fast" approaches
• Social, mobile, analytics, and cloud technologies are driving new health industry business models
• Corporate venture capital is picking up the slack as traditional venture funding slows for pharmaceutical start-ups
• Technology is redefining the healthcare job market
• Drugmakers must rethink their clinical trial research methods, embracing alternative approaches

"While health insurance exchange implementation is driving headlines today – in reality the next 12 months will be marked by how well the industry addresses a range of core business challenges.  Our annual Top Issues report identifies the main concerns facing the health industry in 2014," said Kelly Barnes, PwC's U.S. health industries leader. "Businesses must address rapid innovation and competition from non-traditional players, but above all they must respond to empowered consumers as customer-centric transformation sweeps healthcare."

Recognizing the increased role of the consumer, HRI polled 1,000 individuals to identify the top concerns driving healthcare customers' choices. Key findings for 2014 include:

• Price-sensitive consumers are distinguishing high-quality care from high-cost care. Sixty-five percent of consumers do not believe expensive medical treatment means better quality.
• Providers and consumers are increasingly adopting mobile health technologies – more than one-quarter of consumers use mobile apps to schedule healthcare appointments, up from 16 percent a year ago.
• A skeptical public is wary of new entrants in health insurance. Only one in 10 consumers surveyed indicated they were very likely to buy insurance from a new start-up and only fifteen percent said they were very likely to purchase a health plan run by a hospital or health system.
• Twenty-seven percent of consumers indicated they strongly prefer that employers offer a choice of three to five health plans compared to 14 percent who strongly preferred to be offered a single plan.  

Additional details on the top 10 business issues that HRI identified include:

1.  Picking up the pace of price transparency

Purchasers are demanding more information about the prices that providers charge and the government is giving it to them. Earlier this year, CMS released a trove of hospital pricing data for the first time showing significant variability in cost. Cost-conscious employers are making transparency a top factor in negotiations with health plans and providers. As more pricing information becomes public, how will consumers, employers, and insurers put the data to use and what does it mean for providers?

2.  Employers explore new options with private exchanges

More large employers are using private exchanges as a way to provide healthcare benefits to their workers. This trend will likely grow in 2014 as employers continue to explore strategies for holding down costs, shedding the administrative burden of providing coverage, and expanding plan choice for employees.

3.  Pharmaceutical supply chain security: Combating counterfeit drugs

A new federal law – the Drug Quality and Security Act – is aimed at eliminating counterfeit medications in the drug supply chain. The law imposes a tight timetable on implementing the first step toward a nationwide "track and trace" system to document the journey of prescribed medications from manufacturer to patient. Drug makers will be required to begin tracking prescribed drugs in large bundles or "lots" starting in 2015. And in 2017, the industry must begin assigning serial numbers to individual "saleable units" of every prescribed product sold in the U.S. PwC estimates that the program will cost drugmakers $10 million to $50 million per manufacturer.

4.  Medicaid's march toward managed long-term care

States are struggling to contain rising Medicaid costs in the face of an aging baby boom population that has not saved enough for health costs in retirement. Demographic and economic trends point toward many years of rising long-term care costs. States are looking to a familiar tool – managed care - to help hold the line on long-term care spending. Ten years ago, only eight states had a Medicaid managed long-term care program; in 2014, that number is expected to climb to 26.

5.  Companies rethink their roles in the new health economy

In the new health economy, money will move differently as consumers exercise greater control over spending and more companies compete for a piece of the healthcare dollar. Competition from new entrants, incentives to take on more risk, pressures to reduce costs, and the growing influence of consumers are all forcing healthcare organizations to rethink who they are and what they offer. Many are striking new alliances, marrying their own healthcare experience with the likes of big box retailers, technology companies, and wellness companies to diversify their brands and gain an edge over their competitors. Others are forging ahead on their own by expanding beyond their core competencies. 

6.  A new mantra for healthcare innovation: fail fast, frequently, and frugally

Converging forces in 2014, including reduced government funding, will necessitate a new and leaner innovation model. Instead of fearing failure, organizations must embrace it. A discovery process focused on failing fast and frequently can help arrive at solutions in less time and with less cost. By fostering an innovative culture that brings more rigor to the process and views failure as a means to an end, companies can achieve high-impact innovations in less time and at lower cost.

7.  Social, mobile, analytics, and cloud technologies prime health industry for new business models

A single ecosystem of mobile sensors, devices and apps are enabling us to track everything from steps we walk to the calories we consume. Although separately these tools are not new, they are now being used to improve the practice of medicine and coordination of care. Instead of prescribing drugs, providers are prescribing exercise regimens and using data to keep patients on track to meet health goals. In 2014, the trend has the potential to fundamentally alter how health organizations interact with patients and one another to deliver care and manage health while keeping costs down.

8.  Corporate venture capital picks up the slack

As traditional venture firms pull away from funding life sciences start-ups, corporate capital will pick up the slack in 2014. With many corporations cash rich – but R&D poor – new venture funds may be a solution for stagnating innovation. New and unusual marriages are occurring between corporate cash and traditional venture capital, injecting not only money, but fresh innovative thinking and industry insights. Start-ups can benefit from a steady stream of funding that can last throughout the development phase and draw upon corporate expertise to help commercialize products.

9.  Technology is redefining the healthcare job market

With millions of new customers, the rise of quality-based payments, and more discerning consumers, healthcare organizations require new workforce capabilities that stretch beyond traditional clinical roles into more convenient, consumer-focused technologies.  Healthcare organizations need to use technology to extend care and build a workforce that is skilled at engaging digitally with patients.

10.  A new lens on clinical trials

In 2014, as the pharmaceutical industry comes under increasing pressure to replenish its product pipeline faster and with fewer dollars, drugmakers must re-think their research methods. Precision medicine and the continued focus on specialty products are giving rise to new clinical trial designs, such as non-randomized studies. These changes will present new challenges for drugmakers as they work to ensure the integrity of their data, recruit appropriate patients, and determine product pricing. New technologies, such as virtual clinical trials, may offer a solution. According to HRI, nearly 70 percent of consumers surveyed agree that biomedical research is an important economic growth engine, but they are unsure of their role.

The list is informed by HRI research and the input of PwC's Health Industries professionals who work with hospitals, physician groups, pharmaceutical and medical device companies and employers. In the fall of 2013 HRI also conducted a poll of 1,000 U.S. consumers on a range of healthcare topics covered in the report. The report provides further analysis of the top issues for 2014 and outlines implications for key stakeholders. For the full report, videos with industry experts and graphics illustrating each issue, visit:www.pwc.com/us/tophealthissues.

About PwC's Health Research Institute (HRI)PwC's Health Research Institute (www.pwc.com/hri) provides new intelligence, perspectives, and analysis on trends affecting health-related industries. The Health Research Institute helps executive decision makers navigate change through primary research and collaborative exchange. Our views are shaped by a network of professionals with executive and day-to-day experience in the health industry. HRI research is not sponsored by businesses, government, or other institutions.

About PwC's Health Industries GroupPwC's Health Industries Group (www.pwc.com/us/healthindustries) is a leading advisor to public and private organizations across the health industries, including healthcare providers, pharmaceuticals, health and life sciences, payers, employers, academic institutions and non-health organizations with significant presence in the health market. Follow PwC Health Industries at @PwCHealth.

About PwC USPwC US helps organizations and individuals create the value they're looking for. We're a member of the PwC network of firms in 157 countries with more than 184,000 people. We're committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/US. Gain customized access to our insights by downloading our thought leadership app: PwC's 365™ Advancing business thinking every day

Learn more about PwC by following us online: @PwC_LLP, YouTube, LinkedIn, Facebook and Google +.

© 2013 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC US refers to the US member firm, and PwC may refer to either the PwC network of firms or the US member firm. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

SOURCE PwC Health Research Institute

CONTACT: Tony Herrling / Danielle Pieri, Brainerd Communicators, Inc., herrling@braincomm.com / pieri@braincomm.com, (212) 986-6667; Mason Burnham, PwC US, mason.burnham@us.pwc.com, (914) 263-8716

Web Site: http://www.pwc.com/US 

Funding News: Sutro Biopharma Secures $26M in Series D

Sutro Biopharma closes $26 Million financing; expands development of novel Immuno-oncology products. The firm is developing a new generation of antibody drug conjugate therapeutics and bifunctional antibody-based therapeutics for targeted cancer therapies. Full Press Release Follows. SOURCE: Sutro Biopharma  SAN FRANCISCO, Dec. 11, 2013 /PRNewswire/ -- Sutro Biopharma today announced that the company has secured $26 million in a Series D financing. The additional financing will fund the expansion of Sutro's proprietary immuno-oncology product pipeline.  Sutro is developing a new generation of protein therapeutics, including next-generation antibody drug conjugates and bispecific antibodies, utilizing the company's cell-free protein synthesis technology. The financing closed in December 2013 and was led by Sutro's existing investors: Alta Partners, Amgen Ventures, Celgene Corporation, Lilly Ventures, Skyline Ventures and SV Life Sciences. Sutro has raised over $90 million since its founding in 2003. "Our ability to accelerate the development of our immuno-oncology portfolio is now in hand. This successful financing further demonstrates the enthusiasm of our investors in Sutro and is a tremendous validation of our emerging product pipeline together with our broad technology platform. Sutro is an emerging leader in the rapid development of novel and differentiated products targeting immuno-oncology pathways," said William Newell, chief executive officer of Sutro Biopharma. "We will continue to advance candidates that leverage the immune system's natural ability to fight cancer, with the goal of establishing next generation immuno-oncology products that will transform cancer therapy for physicians and patients."   About Sutro Biopharma Sutro Biopharma, located in South San Francisco, is developing a new generation of antibody drug conjugate therapeutics and bifunctional antibody-based therapeutics for targeted cancer therapies. These therapeutics will significantly extend the clinical impact of current oncology therapeutic approaches and are beyond what can be envisioned with current, cell-based expression technologies. Sutro's biochemical synthesis technology, which underpins these therapeutics, allows the rapid and systematic exploration of many protein drug variants to identify drug candidates. Once the product candidates are identified, production can be rapidly and predictably scaled up to commercial levels. Sutro has established a Good Manufacturing Practice (cGMP) facility for the production of clinical supplies of materials using its biochemical protein synthesis platform. Sutro has formed multiple partnerships with biopharma companies utilizing its technology, including a collaboration with Celgene Corporation to design and develop novel antibody drug conjugates and bispecific antibodies as well as to manufacture a proprietary Celgene antibody. For more information, visit www.sutrobio.com. Media Contact: Martina Schwarzkopf, Ph.D. Russo Partners (212) 845-4292 (347) 591-8785 (mobile) martina.schwarzkopf@russopartnersllc.com SOURCE Sutro Biopharma Web Site: http://www.sutrobio.com

New Study: LT Use of Heartburn, Ulcer Meds Linked to Vit B12 Deficiency

Long-term use of common heartburn and ulcer medications linked to Vitamin B12 deficiency, according to a new study published online in the Journal of the American Medical Association. Left untreated, vitamin B12 deficiency can increase the risk of dementia, nerve damage, anemia, and other medical complications, some of which may be irreversible.

Full Press Release Below.

SOURCE: Kaiser Permanente

Long-term Use of Common Heartburn and Ulcer Medications Linked to Vitamin B12 Deficiency

OAKLAND, Calif., Dec. 10, 2013 /PRNewswire/ -- Long-term use of commonly prescribed heartburn and ulcer medications is linked to a higher risk of vitamin B12 deficiency, according to a new study published online in the Journal of the American Medical Association.

Left untreated, vitamin B12 deficiency can increase the risk of dementia, nerve damage, anemia, and other medical complications, some of which may be irreversible. Stomach acid aids in vitamin B12 absorption; suppressing the acids can lead to the health-threatening vitamin deficiency.

Researchers examined the electronic health records (including diagnoses, pharmacy orders and laboratory results) of 25,956 adult Kaiser Permanente patients diagnosed with vitamin B12 deficiency inNorthern California between January 1997 and June 2011, and compared them with 184,199 patients without B12 deficiency during the same time period.

This is the first large, population-based study linking vitamin B12 deficiency to acid-suppressing medications, which are among the most commonly used pharmaceuticals in the United States. In 2012, about 15 million people received 157 million prescriptions for a class of anti-acid medications known as proton pump inhibitors (PPIs).

"Patients who took PPI medications for more than two years had a 65 percent increase in their risk of B12 deficiency," said Douglas A. Corley, MD, PhD, a gastroenterologist and research scientist with the Kaiser Permanente Division of Research. "Higher doses also were associated with an increased risk, compared with lower doses. Kaiser Permanente's electronic health records allowed us to look at what happens in the real world for these commonly used medications."

While PPIs and a related class of anti-acid medications called histamine-2-receptor agonists, known as H2RAs, are usually prescribed by physicians, some are widely available over the counter without a prescription.

Among the 25,956 patients who had vitamin B12 deficiency, 12 percent used PPIs for at least two years, compared with 7.2 percent of the control patients. The impact of taking any daily dosage of H2RA medications was less pronounced but also significant: 4.2 percent of patients with B12 deficiency used these medications versus 3.2 percent of control patients.

"This research raises the question of whether people who are taking acid-depressing medications long term should be screened for vitamin B12 deficiency," Dr. Corley said. "It's a relatively simple blood test, and vitamin supplements are an effective way of managing the vitamin deficiency, if it is found."                                                          

Kaiser Permanente can conduct transformational health research such as this study in part because it has the largest private patient-centered electronic health system in the world. The organization's electronic health record system, Kaiser Permanente HealthConnect®, securely connects 9.1 million patients to 16,000 physicians in almost 600 medical offices and 38 hospitals. It also connects Kaiser Permanente's research scientists to one of the most extensive collections of longitudinal medical data available, facilitating studies and important medical discoveries that shape the future of health and care delivery for patients and the medical community.

In addition to Dr. Corley, co-authors of the study were Jameson R. Lam, MPH, Jennifer L. Schneider, MPH, and Wei Zhao, MPH, all of the Kaiser Permanente Division of Research in Oakland, Calif.

About the Kaiser Permanente Division of Research

The Kaiser Permanente Division of Research conducts, publishes and disseminates epidemiologic and health services research to improve the health and medical care of Kaiser Permanente members and society at large. It seeks to understand the determinants of illness and well-being, and to improve the quality and cost-effectiveness of health care. Currently, DOR's 550-plus staff is working on more than 250 epidemiological and health services research projects. For more information, visit www.dor.kaiser.org and follow us @KPDOR.

About Kaiser Permanente

Kaiser Permanente is committed to helping shape the future of health care. We are recognized as one of America's leading health care providers and not-for-profit health plans. Founded in 1945, our mission is to provide high-quality, affordable health care services and to improve the health of our members and the communities we serve. We currently serve 9.1 million members in eight states and the District of Columbia. Care for members and patients is focused on their total health and guided by their personal physicians, specialists and team of caregivers. Our expert and caring medical teams are empowered and supported by industry-leading technology advances and tools for health promotion, disease prevention, state-of-the-art care delivery and world-class chronic disease management. Kaiser Permanente is dedicated to care innovations, clinical research, health education and the support of community health. For more information, go to kp.org/share.

For more information, contact:
Cyrus Hedayati, chedayati@golinharris.com, 415-318-4377
Janet Byron, janet.l.byron@kp.org, 510-891-3115

SOURCE Kaiser Permanente

Web Site: http://www.kaiserpermanente.org 

PMDA | Japan Approves Jarvik 2000 Heart

Full Press Release Follows.

SOURCE: Jarvik Heart, Inc.

NEW YORK, Dec. 5, 2013 /PRNewswire/ -- JARVIK HEART, Inc., a privately-held company that develops and manufactures cardiac assist devices, announced that the Japanese Pharmaceuticals and Medical Devices Agency (PMDA) has granted approval to the Shonin (or pre-market approval) application submitted by Century Medical, Inc., (CMI) for the Jarvik 2000 Heart, a small Left Ventricular Assist Device (LVAD) implanted inside the natural heart. CMI is the exclusive distributor of the Jarvik 2000 in Japan. Shonin approval was granted on November 22, 2013, following the PMDA's review of data on Japanese and U.S. clinical trials with the device. In Japan, where there is an extended waiting time for donors, patients have been supported long term by the Jarvik 2000, for up to four years, and then have been successfully transplanted  once a donor heart has become available.

The Jarvik 2000, manufactured in New York by Jarvik Heart, Inc., is the smallest LVAD approved for long-term use in Japan. At only 30cc volume and 90 grams (about the size of a C-cell battery), the Jarvik 2000 can support the hearts of patients only 4' 6" tall and weighing less than 85 lbs. Yet the same blood pump can also support large patients more than 6' 2" tall and weighing more than 225 lbs. For smaller patients, the pump is operated at slower speeds; for larger patients, it is operated at higher speeds.

In Europe, the Jarvik 2000 Heart has CE mark approval. In the U.S., Jarvik Heart has completed a 150-patient Pivotal Trial for Bridge to Transplant. A randomized trial (with comparison to the HeartMate II) for long-term use is currently in progress. More than 300 patients will be evaluated for survival two years after implant and for absence of infection at three years. 

More than 600 patients at dozens of hospitals in twelve countries have been treated for severe heart failure with the Jarvik 2000. Many patients have been transplanted or supported long term with an excellent quality of life. Today (Dec. 5th), a patient in France celebrates his eighth year of active life supported by the Jarvik 2000. The very first patient to receive the Jarvik 2000 as a bridge to a transplant is doing well thirteen years after implantation of her donor heart.

Jarvik Heart, Inc. is also developing a miniature Jarvik 2000 for use in infants. This work is supported by the National Heart, Lung, and Blood Institute (NHLBI) under the PumpKIN program (Pumps for Kids, Infants, and Neonates). Initiation of a multicenter clinical trial is planned for 2014.

For more information, please visit jarvikheart.com and cmi.co.jp.

SOURCE Jarvik Heart, Inc.

CONTACT: Dr. Mary Blinder, (212) 397-3911 extension 30, mblinder@jarvikheart.com

Web Site: http://www.jarvikheart.com 

M&A News: PharmAthene Announces Termination Of Merger Agreement

PharmAthene Announces Termination Of Merger Agreement With Theraclone Sciences

Full Press Release Below.

SOURCE: PharmAthene, Inc

ANNAPOLIS, Md., Dec. 2, 2013 /PRNewswire/ -- PharmAthene, Inc. (NYSE MKT: PIP) announced today that it has terminated its definitive merger agreement with Theraclone Sciences, Inc. with consent from Theraclone. The agreement provided for the merger of a wholly-owned subsidiary of PharmAthene into Theraclone in an all-stock, merger-of-equals transaction. Accordingly, PharmAthene has cancelled the Special Meeting of Stockholders scheduled for December 3, 2013 and will pay Theraclone a $1 milliontermination fee.

Eric Richman, PharmAthene's President and Chief Executive Officer noted, "I would like to thank the employees and management of PharmAthene and Theraclone who have worked diligently on this transaction over the past several months. We at PharmAthene will continue to seek to identify opportunities to maximize value for our stockholders."

About PharmAthene
PharmAthene is a leading biodefense company engaged in the development and commercialization of next generation medical countermeasures against biological and chemical threats. PharmAthene's current biodefense portfolio includes the following product candidates:

• SparVax^® - a next generation recombinant protective (rPA) anthrax vaccine
• rBChE bioscavenger - a medical countermeasure for nerve agent poisoning by organophosphorous compounds, including nerve gases and pesticides
• Valortim^® - a fully human monoclonal antibody for the prevention and treatment of anthrax infection

In addition, in May 2013, the Delaware Supreme Court issued its ruling on the appeal in our litigation with SIGA Technologies, affirming the Court of Chancery's finding that SIGA was liable for breach of contract, reversing its finding of promissory estoppel, and remanding the case back to the Court of Chancery to reconsider the appropriate remedy and award of attorney's fees and expert witness costs in light of the Supreme Court's opinion. For more information about PharmAthene, please visit www.PharmAthene.com.

Forward-Looking Statements
Except for the historical information presented herein, matters discussed may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Statements that are not historical facts, including statements preceded by, followed by, or that include the words "will," "hopeful," "designed," "expect," "objective" or similar statements are forward-looking statements. PharmAthene disclaims any intent or obligation to update these forward-looking statements, except as required by law. Forward-looking statements include known and unknown risks and uncertainties, including, among others, the impact of the termination of the merger agreement between Pharmathene and Theraclone, including litigation previously announced relating to the proposed merger the Company's need for and ability to obtain additional financing; risk associated with the reliability of the results of the studies relating to human safety and possible adverse effects resulting from the administration of the Company's product candidates; unexpected funding delays and/or reductions or elimination of U.S. government funding for one or more of the Company's development programs; the award of government contracts to competitors; unforeseen safety issues; unexpected determinations that these product candidates prove not to be effective or capable of being marketed as products; as well as risks detailed from time to time in PharmAthene's annual report on Form 10-K and quarterly reports on Form 10-Q under the caption "Risk Factors" and in its other reports filed with the SEC. Copies of PharmAthene's public disclosure filings are available from its investor relations department and our website under the investor relations tab atwww.PharmAthene.com.
SOURCE PharmAthene, Inc.

CONTACT: Stacey Jurchison, PharmAthene, Inc., Phone: (410) 269-2610, Stacey.Jurchison@PharmAthene.com

Web Site: http://www.pharmathene.com