According to the FT, GSK bought out Novartis 36.5% stake in their consumer health joint venture partnership for $13B. That move brings to GSK – sole ownership of products such as OTC tooth paste Sensodyne while enabling GSK to strengthen its consumer health division within its three main revenue drivers.
GSK’s consumer health division make up approximately 25% of sales while the Pharma drug discovery arm make up 50% of sales. The other 25% of sales comes from vaccines.
The company was originally set to acquire Pfizer’s Consumer Health arm for a similar price in a diversification strategy that would have given it the OTC brand – Advil.
Pfizer’s consumer health arm remains on sale.
We have all heard the news by now of the Aetna and CVS Health $69B merger. What remains to be seen is the disruptive element. It’s business as usual. Or perhaps – economy of scale?
There was already a tie up as far back as 8 years ago. According to a 2010 WSJ article, Aetna contracted out long-term administration of its pharmacy-benefit business to CVS Caremark Corp in a 12-year agreement that offered prescription-drug discounts to some 10 million members.
As part of the arrangement for that deal, Aetna transferred 800 of its own PBM employees to CVS Caremark and retained 1,000 PBM employees. For such a tightly integrated deal, and the present day opportunity in drug costs, it was only a matter of time that the two companies merged.
Other opportunities in the merger is the ability for narrow networks in the benefit design. CVS minute clinics offering expanded/concierge options to Aetna self insured customers (large employers).
It is no longer a secret that these two firms are merging. Considering that their main competitors already have pharmacy benefit managers (PBM)- United – Optum Rx, Humana (it’s own PBM), and Aetna (CVS Caremark), it makes sense.
According to Fierce Pharma, the industry continue to speculate about Amazon’s intentions in the drug business. Besides its recent partnership with J.P. Morgan and Berkshire Hathaway to explore care plans with their employee population, what is clear is that creating a more efficient medicines supply chain is in its sights.
Digital health company, Clover which offers insurance to seniors in New Jersey, and now to parts of Georgia, Pennsylvania and Texas posted a $22M loss in 2017.
The company serving the lucrative and stable Medicare Advantage market made revenue of $267M that year according to Bloomberg
It only takes a quick reading of the chart from the Kaiser Family Foundation below to note why this market is lucrative. The Medicare Advantage market is now 33% of Medicare – that’s 19 million people served from just 7 million people in 1999. Average premiums are $36 per person.
With almost 50% of the market dominated by United Health and Humana per Figure 6 KFF,
Clover has some work to do. On the immediate list for the firm include focusing on it’s sickest customers – to drive down ER costs/use, getting it’s Medicare Stars Rating up towards the perfect ‘5’ score and negotiating narrow-er networks.
Uber is going into healthcare and for them that means transporting patient back to their homes from the hospital. They are going after the “missed appointments” market.
Regarding their B2B business model, according to TechCrunch, Uber Health charges healthcare organization customers only for the cost of individual rides, which are at par with what those rides would cost via the consumer app. Access to a dashboard and the reporting tools are included free for the health care organization.
Apparently, Uber there are already over 100 healthcare organizations on the platform. As the company has an API for providers to build the service into their existing patient management software, it opens up opportunities for integrated digital health ecosystem partnerships with other firms.
According to Bloomberg, after Roche acquired Austrian app, MySugr for $75M last June, the firm has been busy integrating it into it’s operations. Insurance payers increasingly are re-evaluating unit costs and margins and are thus cutting prices. Blood-sugar monitoring equipment looks like a safe bet to start. Chief Executive Officer Schwan notes – Payers have switched from simply reimbursing some strips to measure glucose, to value based model’.