Dispensed: Pharma middlemen get their day in the hot seat, life at Flatiron Health a year after acquisition, and almost $1 billion invested in clinical trial startups

CVS Caremark President and CVS Health Executive Vice President Derica Rice, center, flanked by Cigna Corporation Executive Vice President and Chief Clinical Officer Steve Miller, left, and Humana Healthcare Services Segment President William Fleming, right, testifies before the Senate Finance Committee on Capitol Hill in Washington, Tuesday, April 9, 2019, during a hearing to explore the high cost of prescription drugs.CVS Caremark President and CVS Health Executive Vice President Derica Rice, center, flanked by Cigna Corporation Executive Vice President and Chief Clinical Officer Steve Miller, left, and Humana Healthcare Services Segment President William Fleming, right, testifies before the Senate Finance Committee on Capitol Hill in Washington, Tuesday, April 9, 2019, during a hearing to explore the high cost of prescription drugs.AP Photo/Susan Walsh

Hello,

Well, it's official: Bristol-Myers Squibb and Celgene are likely going to form the megamerger of their dreams, after shareholders approved the $74 billion union.

Before heading into the weekend on that note, I wanted to leave you with a recap of all the news that kept Business Insider's healthcare team busy this week (tune in next week for some big pieces we've been working on for a while!).

We kept a close eye on Capitol Hill this week, where pharmacy benefit managers and drugmakers alike faced lines of questioning from Congress.

Here's a recap of what all went down in the Senate hearing with PBMs, which involved a lot of downplaying of rebates and shifting blame back on drug companies.

Congress grilled little-known middlemen over the high cost of prescription drugs. Here's how they defended themselves.

  • In February, Congress brought in a group of pharmaceutical CEOs and executives from seven companies to testify about the high price of prescription drugs.
  • On Tuesday, Congress kept the conversation going, this time grilling pharmacy benefit managers, the little-known middlemen responsible for negotiating drug prices.
  • During the hearing executives from the PBMs owned by companies including Humana, Cigna, and UnitedHealth Group made their cases as to why they shouldn't be to blame for the high price of prescription drugs.

Relatedly, Democratic Senator Ron Wyden of Oregon followed up with drugmakers after the February hearing, asking them whether they'd commit to lowering their prices if the proposed rule to get rid of rebates in Medicare goes through. Not surprisingly, there were caveats that the drugmakers leaned on, Emma Court reports.

Senators asked 7 big drugmakers to lower their prices. None of them gave a straight answer.

  • US drug prices are higher than anywhere else in the world. Congress has been trying to figure out who's to blame, but there has been a lot of finger pointing.
  • The Trump administration has proposed a change that would target shadowy middlemen called pharmacy-benefit managers (PBMs).
  • But drug companies have been left largely unscathed. When senators pressed drug companies if they would commit to lowering prices, they were evasive.
  • Senator Ron Wyden of Oregon is calling for Congress to take action. "In case there was any doubt, Big Pharma is not about to start self-policing their pricing practices," he said on Monday.

Between that and the insulin hearing the next day, I'll be curious to see what actions Congress decides to adopt going forward to keep a lid on drug prices.

This week, I popped over to Flatiron Health's offices to talk to the company's CEO Nat Turner about life at the company a year after Roche acquired it for $1.9 billion.

He tells me not much has changed day-to-day at Flatiron Health, something he's surprised to say.

Nat Turner Flatiron HealthHollis Johnson/Business Insider

A CEO who sold his company for $1.9 billion in 2018 shares his advice for other founders who want to stay on after an acquisition

We caught up on what it's like to have a boss now, the company's growing pains that come with a transition, and expanding a team to 1,000 people by the end of 2019. I also had him share some advice he'd give to other founders looking to stay on post-acquisition.

Speaking of the intersection of health and tech, Emma reported on why Morgan Stanley thinks the healthcare industry should be taking Apple very seriously.

Forget Amazon and Google. Apple could bring in $300 billion a year in healthcare, Morgan Stanley says

  • Apple has been getting into healthcare for years, from the iPhone to the Apple Watch and more.
  • Investors are too focused on healthcare efforts from other tech companies like Amazon and aren't taking Apple's opportunity seriously enough, a new Morgan Stanley report says.
  • The tech giant could build an App Store-like model for healthcare, potentially bringing in $15 billion to $313 billion in revenue by 2027, Morgan Stanley estimates. Read on to find out how.

Emma also has a deep dive into what you need to know about all the funding flowing into clinical trial startups.

Creating a new drug takes a decade and costs a fortune. Investors have poured almost $1 billion into startups trying to change that.

  • Developing an innovative new medicine is a long and expensive slog.
  • Upending that process is the goal of a wave of new startups. Investors have put just under $1 billion into the area over the last five years, according to an analysis done by PitchBook for Business Insider.
  • These new companies are putting data and technology at the center of their approaches, but the sorry state of the two in healthcare could undermine the whole enterprise.

With that, I'll let you head into your weekend with the knowledge that Kate McKinnon and Jennifer Lawrence will both be playing Elizabeth Holmes in TV and film adaptations. I know we're all probably burnt out on Theranos content, but I have to say, I'm pretty curious to see how those two acting forces take on the role in their respective projects.

Tips? Dream casting choices for other roles in the Theranos saga? You can find me at lramsey@businessinsider.com and the entire team at healthcare@businessinsider.com.

- Lydia

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