Thursday report

David Ermer–CDC, CMS, FDA, Federal employment benefits, Generative AI, Medical / Rx research, Medicare, Obesity, Rx coverage, U.S. Healthcare–

Simplicity is a virtue.

In recognition of Juneteenth, a Friday report will not be posted tomorrow. The FEHBlog will return on Saturday with the latest Cybersecurity Saturday post.

From Washington, DC.

  • Healthcare Dive reports,
    • The CMS is recalculating 2026 Medicare Advantage stars for insurers after the agency lost a court case over its methodology.
    • Only plans that see their stars increase will have their ratings updated and be able to resubmit bids for next year, regulators said in a memo to plans Wednesday. It could be a major boon for insurers, given the stars are linked to lucrative bonuses and competitive advantages in the privatized Medicare program.
    • Still, the recalculation basically results in no change in average star ratings for other insurers besides Clover Health, which brought the lawsuit against the CMS, according to TD Cowen analysts. Some insurers may choose to sue over the approach.
  • STAT News relates,
    • “Making good on its threat, Eli Lilly has begun eliminating mandated price breaks to a few dozen hospitals that participate in a federal drug discount program after failing to receive comprehensive claims data.
    • “The move comes after the company warned earlier this month it would take such a step as part of a policy announced in January in order to reduce what it calls duplicate discounts paid to the hospitals. Trade groups representing hospitals, however, argue the move is unlawful and want Congress to intervene.
    • “At the time, Lilly maintained that more than 2,300 hospitals had complied with its demand, but some larger hospitals systems around the U.S. refused to do so, despite recent follow-up letters regarding the policy, which went into effect Feb. 1. Up to 1,000 had so far not complied, and Lilly indicated it was pressing about 50 larger hospitals to provide data.
    • “A Lilly spokesperson declined to say how many hospitals are now being denied the mandated discounts but sent us a statement saying, “Lilly is collecting claims data to stop the rampant fraud, waste, and abuse in the 340B program that is harming employers, state and federal governments, and patients.”
  • The American Hospital Association News tells us,
    • “The Health Resources and Services Administration Maternal and Child Health Bureau has announced grant opportunities available supporting maternal and child health initiatives. The Maternal Produce Prescription Program, or MP3, will provide grants for the development and implementation of community-based produce prescription programs and related nutrition education for maternal populations at risk of poor health outcomes due to nutrition insecurity and other health-related factors. Grants are also available for the Regional Pediatric Prevention Network, which will provide funding to hospitals working on advancing pediatric emergency and disaster preparedness locally, regionally and nationally, including for children with special healthcare needs and behavioral health concerns, children living in poverty, and children in rural, remote and tribal areas. The network will include at least 10 children’s hospitals, or their university pediatric partners, as well as community partners. The application deadline is July 17 for the MP3 and RPPN programs. 
    • “Funding is also available for the Maternal Health Emergency Management Training program, which seeks to increase capacity and improve the quality of care provided by clinicians and first responders who encounter pregnant and postpartum women in nondelivery and/or low-resource clinical settings. The deadline to apply for the MHEMT program is July 20.” 
  • Federal News Network inteviews Tammy Flanagan about the Federal Employees Group Insurance Program.
  • JAMA discusses original research concerning the Inflation Reduction Act.
    • “Question  How did prescription drug use change after the Inflation Reduction Act implemented annual out-of-pocket spending caps in Medicare starting in 2024?
    • “Findings  In this cohort study using a difference-in-differences framework of 3053 medications covering 92.9% of gross Medicare Part D spending in 2023, prescriptions for medications paid by Medicare increased after the out-of-pocket cap was implemented in 2024 compared with those paid by commercial insurance; this change was most pronounced among the highest-cost medications, with a 22.7% increase in 2024-2025.
    • “Meaning  Results of this study suggest that implementing annual out-of-pocket caps in Medicare was associated with higher use of medications and that the policy improved Medicare-insured patients’ access to costly medications.”
  • Fierce Pharma notes,
    • “Before Indian drugmaker Aurobindo can complete its acquisition of Pennsylvania generics specialist Lannet, it will have to divest four drugs from the proposed $250 million buyout to resolve anticompetitive concerns, the Federal Trade Commission said.
    • “Aurobindo’s acquisition of Lannett would combine two of a limited number of competitors in the markets for four different generic pharmaceutical products that provide critical relief for patients,” the FTC wrote of its proposed consent order (PDF).
    • “The U.S. regulator has specified that Aurobindo must sell the products to New Jersey generics maker Quagen Pharmaceuticals.”

From the Food and Drug Administration front,

  • The Wall Street Journal reports,
    • “A Food and Drug Administration advisory committee voted that the benefits of a seasonal flu vaccine from Moderna MRNA outweigh its risks, part of the agency’s review of a potential new treatment.
    • “Moderna said Thursday the FDA’s Vaccines and Related Biological Products Advisory Committee voted unanimously that the benefits of the vaccine, mRNA-1010, exceed the risks for the prevention of flu in adults 50 through 64 years old, and in adults 65 years of age and older.
    • “The FDA plans to consider the committee’s recommendations as part of its ongoing review of Moderna’s biologics license application for mRNA-1010, the company said. Advisory committee recommendations are nonbinding, and the FDA is responsible for making final approval.”
  • Fierce Pharma relates,
    • “With FDA acceptance of its application, Roche has moved a step closer to gaining a thumbs up for its potential combination treatment of Polivy and subcutaneous Lunsumiofor adults with relapsed or refractory large B-cell lymphoma (LBCL), including diffuse large B-cell lymphoma (DLBCL), after at least one prior line of systemic therapy.
    • “The U.S. regulator says it’s aiming to decide whether to approve the application by Feb. 9, 2027.
    • “The application is backed by results from a phase 3 study, which showed that after a median follow-up of 23 months, the Lunsumio and Polivy combination demonstrated a 59% reduction in risk of disease progression or death compared to Rituxan plus the chemotherapies gemcitabine and oxaliplatin.”
  • Per an HHS news release,
    • “The U.S. Department of Health and Human Services, through the U.S. Food and Drug Administration (FDA), announced today that it is requesting updates to the prescribing information for testosterone replacement therapy products following a comprehensive review of new clinical data and existing scientific evidence.
    • “The proposed changes would:
      • “Remove the limitation of use stating that the safety and effectiveness of testosterone replacement therapy in men with age-related hypogonadism have not been established.
      • “Update information related to prostate cancer risk.
      • “Revise warnings regarding benign prostatic hyperplasia, also known as enlarged prostate.
    • “During Men’s Health Month, we are putting science back at the center of men’s healthcare,” said HHS Secretary Robert F. Kennedy, Jr. “By updating testosterone therapy labels to reflect current evidence, we are giving patients and physicians clearer information, supporting informed medical decisions, and improving care for millions of American men.”
  • Cardiovascular Business informs us,
    • “More than 11,000 bottles of a popular blood pressure medication have been recalled due to a failed test. The voluntary recall was initiated on June 5, according to key details provided by the U.S. Food and Drug Administration (FDA).
    • “This recall includes 11,460 bottles of Chlorthalidone Tablets manufactured by India-based Inventia Healthcare Limitedand distributed by New Jersey-based Rising Pharma Holdings. Chlorthalidone is a diuretic or “water pill” used to treat hypertension and reduce excess fluid caused by heart, kidney or liver disease. 
    • “These drugs have been recalled due to “failed dissolution specifications.” This means tablets tested by a regulatory body did not break down correctly, creating a risk of the drug being less effective than intended.
    • “The recalled bottles include either 100 or 1,000 of these tablets. They all have an expiration date of April 2027.
    • “Click here for additional details about this recall from the FDA. The incident has not yet been classified as a Class I or II recall.”

From the judicial front,

  • Healthcare Dive reports,
    • “Pharmacy benefit managers want to make sure that an Illinois law creating drug pricing transparency and reforming health benefits administration doesn’t apply to them.
    • “On Tuesday, powerful PBM lobby the Pharmaceutical Care Management Association filed a complaint in federal court against the Illinois Department of Insurance, arguing that the Prescription Drug Affordability Act signed into law last summer clashes with federal oversight of employee benefit plans and that PBMs should be carved out from its provisions.”
  • Beckers Hospital Review relates,
    • “A federal judge has denied The Leapfrog Group’s attempt to reverse a ruling that found its hospital safety grades violated Florida consumer protection law, and separately put a $10.5 million fee dispute on hold, pending appeal.
    • “On June 17, U.S. District Judge Donald Middlebrooks rejected Leapfrog’s motion to reconsider his March 6 ruling, which found the organization violated Florida’s Deceptive and Unfair Trade Practices Act by penalizing hospitals that declined to participate in its voluntary survey with artificially low safety grades.”
  • The Wall Street Journal informs us,
    • “Luigi Mangione’s defense team said Thursday they no longer intended to present a psychiatric defense at his coming New York state-court murder trial, abruptly reversing course after a judge made public the unusual strategy a day earlier.
    • ‘In a single-sentence letter to the presiding judge, the lawyers wrote that, at this time, they were withdrawing a defense in which Mangione would have argued he killed UnitedHealthcare Chief Executive Brian Thompson due to an emotional disturbance.
    • “Mangione’s defense team and a spokesman for the Manhattan district attorney’s office declined to comment.”

From the public health and medical / Rx research front,

  • STAT News reports,
    • “While infant formula in the U.S. has a good overall safety record, the stakes are incredibly high if something goes wrong. Food safety experts who spoke with STAT say they want regulators and the industry to take even stronger measures to prevent disease outbreaks that put babies’ lives at risk. And they want consumers to be wary of marketing from newer, high-end formula companies like ByHeart and Nara that position their products as safer than other options.
    • “I think a lot of parents can be confused and think that if they spend more money on a formula, it’s safer,” said Steven Abrams, a professor of pediatrics at Dell Medical School at the University of Texas at Austin. In fact, formulas are remarkably similar to one another because they’re required to use a blend of 30 ingredients necessary to give babies the nutrition they need. All formulas are also subject to annual FDA inspections and requirements to test for the pathogens salmonella and Cronobacter.
    • “Of designations like organic, GMO-free, or added probiotics and prebiotics, Abrams said, there’s no evidence that such features “have the slightest health effect on babies.”
    • “Nara and ByHeart were both manufacturers “claiming to produce a healthier type of infant formula because they were using whole milk,” said Frank Yiannas, a former deputy commissioner for food policy and response at the FDA. The fact that both brands have been linked with infant botulism, he said, suggests that “reformulating powdered infant formula should be done with extreme due diligence and caution.”
  • and
    • “If you’re an older adult, getting vaccinated against shingles could lower your risk of developing dementia.
    • “A new study found that elderly nursing home residents who received at least one dose of the shingles vaccine known as Shingrix, the only shot of its kind available in the United States, were 24 percent less likely to develop dementia over a four-year period compared to those who were not vaccinated, according to results published this week in the peer-reviewed journal Annals of Internal Medicine.
    • The research adds to the growing body of evidence showing a connection between the viral infection and cognitive decline.
    • “The fact that this is a super high-risk population for dementia and we’re still seeing a potential benefit is really remarkable and important evidence for this population,” said Kaleen Hayes, the study’s lead author and an assistant professor at Brown University who studies the use of medications for chronic conditions in older adults.”
  • and
    • “Fentanyl is by far the biggest opioid killer in the U.S. With more than a quarter of a million deaths since 2021 and about 200 fatalities a day, fentanyl is one of the country’s most urgent public health crises. But drug experts warn that nitazenes can be even more potent and are being mixed with fentanyl and other substances, creating increasingly lethal combinations.
    • “We’re always concerned about fentanyl being mixed in with other drugs — cocaine, meth, heroin,” said Frank Tarentino, associate chief of operations for the DEA’s northeast region. “You add nitazenes to that and it makes it exponentially more dangerous and frightening for drug law enforcement, parents, caregivers, educators, and the young.”
    • “Data obtained from the DEA’s National Forensic Laboratory Information System (NFLIS) show reports of confirmed seizures from nitazenes rising sharply — from 43 positive tests in 2019 to almost 2,000 in 2024 (the most recent year for which data are available). By March this year, more than 8,000 nitazene reports had been recorded since 2019. But experts said that not all laboratories can test for nitazenes — which come in many forms including powders, pills, and sprays — and many don’t feed into the NFLIS system, meaning these numbers are almost certainly an underestimate.” * * *
    • “Nitazenes are predominantly sold online, both on the clear web and dark web, and are often laced into other substances to increase their potency. Experts say this puts unsuspecting users seeking more common drugs, such as oxycodone, fentanyl, or stimulants like cocaine, at risk of fatal overdoses.”
  • The Washington Post tells us “7 unexpected takeaways from the newest research on cannabis and brain effects.”
    • “Whether it’s used in adolescence, midlife or older age may make a big difference.”
  • The American Medical Association lets us know “What doctors want patients to know about summer skin safety.”
    • “Too much sun exposure can have damaging effects on skin, but following proper precautions can help. Follow these summer sun safety tips.”
  • Health Day points out,
    • “Pregnant women are exposed to dozens of common chemicals linked to early delivery and low birth weight, according to a new study.
    • “Researchers tested urine samples from more than 5,000 women who gave birth between 2000 and 2021, and compared the findings with pregnancy outcomes.
    • “They screened for 113 chemicals commonly found in food, water, air pollution, personal care products, fragrances and other household items.
    • “On average, the tests detected 45 chemicals in each sample, with as many as 64 found in some participants.
    • “Among them were phthalates used to make plastics more flexible, as well as some newer plasticizers.
    • “Some of these compounds were consistently associated with earlier delivery and lower birth weight, according to the results.” * * *
    • “The researchers are calling on governments and companies to do more to reduce harmful chemicals in everyday products and ensure new ones are safe.”
  • MedPage Today informs us,
    • “In a cohort study, U.S. women logging at least 2 hours a week of resistance training had a 20% lower risk of incident major cardiovascular disease (CVD) over nearly 15 years.
    • “The benefit of resistance training persisted even if women also engaged in aerobic activity and limited sedentary time.
    • “A lower risk of major CVD could also be observed in those who reached ≥1 hour of weekly resistance training and were consistent about it over the years.”

From the U.S. healthcare business and artificial intelligence report,

  • The American Hospital Association News reports,
    • “Hospital and health system leaders gathered June 17 and 18 in Washington, D.C., for U.S. News & World Report’s Healthcare of Tomorrow Conference, focusing on the future of healthcare delivery. AHA Chair-elect Bill Gassen, president and CEO of Sanford Health in Sioux Falls, S.D., participated in a panel titled “Reimagining Healthcare: The Hospital and Health System of Tomorrow.” The session included discussion on challenges and opportunities shaping the future of hospitals and health systems, and involved topics such as artificial intelligence and digital transformation, care delivery models, community partnerships and sustainable financial performance.  
    • “When I think about the future of health care, I believe success will be defined by how well organizations can connect care across settings, specialties and communities to better serve patients,” said Gassen. “The organizations that will be best positioned for the future are those that can combine deep local relationships and community trust with the capabilities needed to deliver increasingly complex care, invest in innovation, develop the workforce and keep care accessible and affordable over the long term.” Former AHA Board Member Warner Thomas, president and CEO of Sutter Health, and Redonda Miller, M.D., president and CEO of The Johns Hopkins Hospital, also participated on the panel.” 
  • Kaufmann Hall relates,
    • The latest issue [April 2026] of the National Hospital Flash Report covers these and other key performance metrics.
    • Key Takeaways:
      • Hospital performance remains under pressure in 2026. Mixed performance on key volume indicators, staffing challenges, and expense growth continue to pressure hospital operations, reinforcing the need for focused prioritization and strategic planning.
      • Expense growth continues to outpace inflation. Drug and labor expense remains a key contributor to expense growth, driven by both cost and utilization as the population ages, underscoring the importance of strategic spend management across the board.
      • Payer mix continues to erode. Year-over-year climbs in bad debt and charity care reflect broader shifts in payer mix, shifts in coverage, and growth in uninsured populations, requiring hospitals to proactively adapt and manage long-term revenue risks.
    • To view more insights on trends affecting hospitals and steps you can consider taking to address them, download the latest issue of the National Hospital Flash Report.
  • Beckers Hospital Review ranks 81 health systems by annual revenue and identifies four hospital closures that have happened in 2026.
  • Bloomberg tells us,
    • “Johnson & Johnson has no plans to enter the booming obesity market, opting instead to focus on diseases such as cancer, Chief Executive Officer Joaquin Duato said in an interview for an upcoming episode of The David Rubenstein Show: Peer to Peer Conversations.
    • “The comments set J&J apart from many of its rivals trying to develop or acquire obesity medicines following blockbuster weight-loss drugs from Eli Lilly & Co. and Novo Nordisk A/S.“
  • Fierce Pharma informs us,
    • “What’s been Novo Nordisk’s secret weapon to turn the tables on Eli Lilly and win the current market battle over their oral GLP-1 obesity drugs? Name recognition.
    • “That’s according to Jim Hickey, an analyst with Spherix Global Insights, who has studied the competition by surveying 50 primary care physicians (PCPs) and 50 endocrinologists in the United States, as well as writing monthly reports on the uptake of the drugs, both of which debuted on the market earlier this year. 
    • “It’s interesting to see how strongly Novo Nordisk has come out of the gate,” Hickey said in an interview with Fierce. “It’s a very strong launch from what we can see. That lines up with the data Novo Nordisk has shared. I think a big difference between the two really comes down to familiarity. We see the familiarity ratings for the Wegovy pill as being much stronger than what we can see for Foundayo.”
  • Fierce Healthcare points out,
    • “Lantern and Marathon Health are joining forces to launch an integrated model that brings together primary and specialty care, a key concern for employers as costs rise.
    • “The partnership combines Marathon’s advanced primary care model with Lantern’s specialty care platform, simplifying the patient care journey, better managing costs and reducing unnecessary procedures. Marathon clients that do not currently work with Lantern can purchase its services through Marathon, making the process easier for employers, too.
    • “The two initially collaborated on a pilot program with early adopters, focused on orthopedic care, and found between a 37% and 100% increase in referrals to Lantern. Referrals from Marathon led to a 47% increase in either completed or averted surgical procedures, the companies said.”
  • Per BioPharma Dive,
    • “Biogen plans to buy startup RayThera to gain access to a portfolio of immunology drug candidates, including one slated to enter the clinic in the third quarter. 
    • “Founded in 2023, RayThera says its mission is to develop safer, more effective therapies for immunological diseases. But the company has said little publicly about what it’s doing. RayThera’s website doesn’t detail what it’s been working on, instead touting the company’s “nimble and adaptable approach” and containing a pipeline page with three prospects listed only as “anti-inflammatory.”
    • “The deal with Biogen is also rather opaque, per a statement released Wednesday. RayThera investors will get an undisclosed upfront payment and could reap as much as $1 billion if unspecified clinical and regulatory goals are met.”
  • and
    • “An emerging area of drug development got more crowded Wednesday, with the debut of a biotechnology startup trying to create new migraine prevention therapies.
    • “Vedana Therapeutics formed in response to an earlier class of migraine-thwarting medicines that first hit the market toward the end of the last decade. These medicines inhibit specific proteins, “CGRPs,” that play a key role in migraines by transmitting pain signals, widening blood vessels and triggering inflammation in the tissues around the brain. While effective for many, a large portion of patients — more than half, by some estimates — don’t respond to, or stop taking, CGRP-blocking therapies.”
  • McKinsey & Co. discusses “The health system CEO imperative: Turning AI’s promise into performance.”
  • The Wall Street Journal reports,
    • “The clash over AI doctors has begun, and its front line is in Utah.
    • “It started with technology from the startup Doctronic. The state launched a project in January that will allow the service to renew prescriptions for patients. The hope is it will improve medication access.
    • “Any Utah adult can log in to get a refill on cholesterol medications or antidepressants, among other prescriptions. When fully implemented, the project will break new ground by letting an artificial-intelligence product, acting on its own, perform this job typically done by physicians.
    • “Doctors aren’t happy about it.
    • “People can have life and death reactions to medications,” said Dr. Alan Smith, a family physician who chairs the Utah medical board but said he wasn’t speaking for the group. “And then I worry about liability. Who is actually liable for problems that may occur because of a refill of a medication?”
    • “Most of the state’s medical licensing board, including Smith, signed a letter calling for the project to be suspended on safety grounds. They said Doctronic’s tool hasn’t been vetted enough, and prescribing can create risks because drugs cause side effects or might not be appropriate to continue. The Utah Medical Association said it agreed with the letter.
    • “State officials overseeing the pilot program said that the medical board has no authority over the project but that they will consult with it.
    • “The debate over AI doctors extends far beyond Utah’s borders.” 

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