The availability of point of care antibody testing—also known as serological testing—may provide a feasible roadmap for getting people back to work safely following the COVID-19 crisis, according to an editorial published in the journal Contemporary Clinical Trials Communications.

“You can’t stop the economy forever,” asserted Governor Cuomo in a recent news conference, according to STAT. “So we have to start to think about, does everyone stay out of work? Should young people go back to work sooner? Can we test for those who had the virus, resolved, and are now immune, and can they start to go back to work?”

Regardless of whether they already have immunity to the virus, millions of Americans may try to return to work, potentially undoing all the benefits of the shutdown, suggests the editorial. 

Antibody testing, the authors argue, could clarify a person’s status quickly in real-time and reveal whether they have been exposed to COVID-19. Accordingly, a person who mounts an IgG positive response (suggesting the presence of immunoglobulin G antibodies) would most likely now be immune to the virus and an IgM positive result would point to the process of developing immunity in someone who more recently became infected.

“Unlike the PCR tests (a measure of virus material), the immediate results and unconstrained supply of antibody tests could fundamentally change the way we manage this epidemic,” says Robert Jackson, MD, a co-author of the paper. “And from an economic perspective, it could lead to a tractable path for people to return to work. Collecting the data and tracking individuals longitudinally, in order to confirm the hypothesis, will be necessary.”

And barring any HIPAA concerns, the authors propose that persons with positive antibody tests during periods of social distancing could get a bracelet, which indicates that they are immune-protected and can return to work. Those without a bracelet would still be asked to practice social-distancing and not yet resume their normal activities. But this approach could potentially get at least some portion of the economy back running again, suggests the authors.

According to the authors, the antibody tests are cheap, easy to administer, and could be made available at every hospital.

“Broad testing is in society’s best interest,” says Alex Karnal, a co-author of the editorial. “Until we make serological tests available in a robust way, it’s as if we are flying a plane without navigation.”

Authors of the editorial, titled, “Let’s Get Americans Back to Work Again,” are: Alex Karnal, Partner and Managing Director; Robert Jackson, MD, Partner and Chief Science Officer; and Joe Pearlberg, MD, PhD, Vice President of Scientific Affairs, all at Deerfield; and Amitabh Chandra, PhD, McCance Family Professor at Harvard Business School and Weiner Professor at the Harvard Kennedy School.

China is one of the world’s largest and fastest growing economic powers. In 2017, the World Bank reported that Chinese patent filings outnumbered those from any other country in the world. Chinese residential patent filings (i.e., filings by a resident owner or a resident applicant) accounted for 58 percent of worldwide residential patent filings. China has tripled its intellectual property (IP) revenues over the last two years, but this still only accounts for around 1.5 percent of global receipts [1]. The low revenue reflects the lack of confidence that U.S. and European firms have in the fairness of the Chinese legal system, which they accuse of bribery and political influence. Chinese firms are also mistrustful of the U.S. legal system and often decide not to file for patent protection outside of China. Whether due to the vastly different legal systems or cultural differences, there is a persistent mutual mistrust between China and much of the Western world when it comes to IP protection.

As our economy becomes increasingly global, businesses face challenges as they try to protect their intellectual property assets in different countries. Two universities, Berkeley in the U.S. and Tsinghua in China, have tried to mitigate these difficulties by organizing a joint conference between China, the U.S., and other countries. On October 22, 2019, The Berkeley Center for Law and Technology hosted the 2nd Annual Berkeley-Tsinghua Transnational IP Litigation Conference. At the conference, the U.S. and Chinese judges openly debated the pros and the cons of their own and others’ litigation systems.

Chinese judges expressed distrust in the U.S. system of jury trials. Besides viewing the jury selection process as cumbersome and inefficient, they viewed juries as unsophisticated laypeople who are poorly suited to understanding complex technologies. Chinese judges fear that the quality of lawyering unduly influences the jurors: jurors are easily swayed by presentation quality, likability of experts, and general trial theatrics. “If we compare, [Chinese judges] are the directors in court, but in a jury system, lawyers and parties are directors of the system,” said Hsiung Sung-Mei of Taiwan’s IP court. The U.S. judges defended our system suggesting that the juries are capable of weighing evidence and rendering meaningful verdicts. They also suggested that the use of common people on the juries increases confidence in the legal system where common people often mistrust the lawyers.

The U.S. judges expressed concerns with the amount of influence a single person or a single report has on the outcome of a case in China. In contrast to jury trials, Chinese judges appoint and rely on a Technology Investigative Officer (TIO). An appointed TIO hears both sides and prepares a report for the court. While the U.S. rules of civil procedure allow the use of a court appointed expert, this device is rarely used. The Chinese judges believe an impartial third-party expert would be much more qualified to understand the nuances of each particular case rather than a group of jurors.

U.S. judges also questioned ex parte communications between parties and judges that are common under the Chinese system². China’s 2001 PRC Judges Law allows non-secret, “authorized” ex parte communications in their courts. Chinese judges feel that ex parte communications expedite proceedings and that judges are sophisticated jurists that are not unduly influenced by one party’s arguments. U.S. judges tend to look at this skeptically because U.S. rules explicitly prohibit most ex parte communication on the grounds that to allow one party to try to influence the judge without giving the other party the opportunity to respond undermines the fairness of judicial proceedings.

Another concern about the Chinese system is the perception that domestic bias and bribery are common. In rebuttal, Judge Hsiung pointed out that the Chinese patent system provides automatic appeals to the court of last resort. In addition, the cost of litigation in China is much cheaper than in the U.S., making it much more accessible. China views the high costs of U.S. litigation as a major obstacle to efficient dispute resolution. In contrast, the U.S. judges highlighted the transparency and impartiality of their own system. The International Trade Commission (ITC) is a common forum to litigate patent infringement against importers, and its proceedings are public and transparent. The fact that U.S. patent owners win only 58 percent of the cases in front of the ITC is used to indicate the lack of domestic bias.

Although the Berkeley-Tsinghua Transnational IP Litigation Conference did not solve any disputes or change legal systems, the debates did provide a platform to air grievances and genuinely learn the rationale behind other legal systems. The hope is that sincere debate and increased understanding will help alleviate the persistent mistrust between China and the Western world when it comes to IP protection.

[1] Calculated from the authorized use of the proprietary rights associated with patents, trademarks, copyrights, industrial processes and designs including trade secrets, and franchises. Brian Cassidy, ANALYSIS: Chinese IP Filing Surge Clouds U.S. Receipt Prospects, Bloomberg Law News (Oct. 27, 2019).

[2] https://www.chinalawtranslate.com/en/blog-post-on-ex-parte-communications/

“The Doctor Will See You Now…In Your Home.”

After well over a century during which the majority of care delivery shifted from the home to hospitals, clinics, and nursing homes, we are increasingly witnessing a gradual reversal of this trend. Fueled by a combination of new technology, the rising cost of care in other settings, and personal preferences for the relative convenience and safety of the home, many would argue that this deinstitutionalization of care is long overdue.

Telehealth

While the adoption curve for telehealth has been less compelling than many health care futurists anticipated, a growing percentage of Americans—now at 8 percent—have tried telehealth at least once, and an even larger percentage has expressed openness to considering it in the future. And while millennials have tried telehealth at almost 3 times the rate of the general population, its potential impact on improving quality and reducing cost may be even greater for seniors, who leverage telehealth for different purposes, such as assistance with medication adherence.

Remote Monitoring

From digital glucometers, scales, pulse oximeters, and blood pressure cuffs to Alexa devices with health care focused “skills,” a range of technologies has made it possible to better manage a number of chronic conditions in the home, including diabetes, congestive heart failure, and hypertension. Efforts to titrate medications for diabetes and hypertension that previously took weeks can be achieved, at times, in days, because of the much greater volume and frequency of data that can be collected with digitally enabled devices combined with telehealth, enabling clinicians to titrate these medicines much more efficiently than the “start at this dose, and see me back in a week” approach.
Recently, United Health Care announced the acquisition of Vivify, a remote monitoring company that leases to providers tablets connected to Bluetooth enabled devices that allow them to monitor and intervene as patients’ health conditions evolve in the home. Given the massive number of care delivery assets that it has accumulated—from primary care practices to hospitalist groups to ambulatory surgical centers, United clearly sees a wide range of use cases for leveraging remote monitoring as yet another tool to move more care out of the hospital “box” as a cost control and quality improvement mechanism.

New Payment Models

For commercially insured patients, a number of companies have taken pages from the historic doctor house call model and combined them with GPS-enabled routing protocols, compact, next generation house call kits (which can include a range of diagnostic and lab collection equipment), and clinicians trained to provide a “white glove” level of primary care and urgent care service in the home.

For patients insured by Medicare Advantage plans, a broader range of companies have expanded to provide home-based primary care or to wrap a range of services around patients’ existing primary care relationships. Some individuals served by these plans are relatively healthy, but seek the convenience of home-based care, similar to the commercial population. There is also a subset of socially and medically complex, high-cost patients covered by Medicare Advantage and Medicaid managed care plans who receive their care in the home in part because it may be challenging for them to leave the home for physical, psychological, or economic reasons. Home-based care models have been shown to improve quality and reduce costs for these patients by reducing ED visits, hospitalizations, and hospital readmissions. Given their efficacy in this regard, these companies have contracted with health plans and risk-bearing provider organizations to receive incentive or shared-savings payments that hold them accountable for their performance at reducing or slowing the growth in the total cost of care while meeting pre-defined quality metrics.

Hospital At Home

Leveraging a combination of telehealth, remote monitoring tools, and in home clinicians (ranging from nurses to physicians, depending on the model), some investor-backed companies and academic institutions are taking the shift in the site of care to the home to its inevitable end-state—the delivery of hospital level care in the home. These companies work with providers and plans to provide care for common conditions like community acquired pneumonia, mild to moderate congestive heart failure, urinary tract infections, and cellulitis that are low-margin DRGs for busy hospitals. In exchange, these hospitals have the ability to care for sicker patients who actually need inpatient or intensive care enough to warrant the higher costs and associated risks of being temporarily housed inside of the hospital “box,” such as opportunistic infections. Hospital at home has been deployed at scale in some European countries for over a decade, and while the uptake has been much slower in the U.S., there is clearly growing interest and momentum in this space and a recognition that it simply has to be one of the features of a future-state health system.

Conclusion

Even if the broader shift to urgent and acute care in the home follows a similarly slow rate of adoption to the one that has been observed in telehealth, over the next 10-15 years, technology-enabled care in the home will become fully mainstream, and the idea of going to clinics or the hospital for many forms of routine care will seem outdated, if not absurd. This shift will force some tough choices, particularly at smaller, community hospitals that may find it challenging to stay afloat without the volume that has sustained the capital-intensive boxes that are modern hospitals. While it may seem counter-intuitive, the shift to the home actually has the potential to create access issues for more complex care where an inpatient stay is required in areas where the reimbursement is not adjusted sufficiently to enable community hospitals that are too big to qualify for critical access hospital status and financing to survive. Overcoming these and other unintended consequences of the shift to the home will require focus and attention, but the positive impact on quality, cost, and the patient experience cannot be understated.

Dr. Harris is a partner on the health care services and technology teams at Deerfield.
 

Precision medicine holds the promise of providing patients with therapies that target the biological mechanism contributing to a particular individual’s disease. Historically, the approach to developing novel medicines has lacked the ability to optimize therapy based on specific factors resulting in an individual patient’s disease state.

Although many drugs have been approved on the basis of clinical trials run in all patients with a disease, some patients enrolled in those trials have had a strong treatment effect while others had minimal to no effect due to biological diversity. With the advent of next generation sequencing (NGS), we now have the ability to understand the diversity of pathways and patient subsets that make up the broader diseased population. This affords the ability to develop therapies for a given patient that targets their specific genetic alteration.

Cancer has been a leading beneficiary of these advances. From a research perspective, biologists can now use next generation sequencing to identify mutations present in patient tumors. Many of these new insights have allowed researchers to further our understanding of cancer biology, although this is only the beginning to the development of targeted therapeutics. In addition to the identification of a novel mutation, researchers and clinicians must advance the science into clinical practice by validating the target through clinical trials in the relevant subset of patients.

This path to clinical validation runs counter to traditional drug development which typically require large trials to prove a drug is effective. With many patient subsets (or mutations) that might exist within a given cancer, it is typically not feasible to run large clinical trials. Yet, despite these challenges, a fundamental understanding of the biology and administration of appropriately targeted therapies has proven adequate by regulators to approve novel drugs. This has resulted in a rapid time to approval, bringing novel therapies to market in record time.

While NGS continues to hold tremendous promise toward the goal of precision medicine, there are a number of practical and technological challenges that currently limit broad applicability. Given the size of the human genome, there is a tremendous amount of data generated per sample of tissue. With existing sequencing technologies, performing whole genome sequencing can take 2-3 weeks due to the processing and interpretation of data. This is a challenge in the clinical setting since patients presenting with cancer may not tolerate a significant delay between diagnosis and therapy.

Additionally, while the cost of whole genome sequencing has come down over time, it can exceed thousands of dollars per sample making it prohibitive to adopt for all patients due to sheer cost. We anticipate that competition and improvement in technology will improve both the speed of a test result and cost thereby making it more accessible to the masses.

NGS also has technical limitations that limit broad clinical applicability. Genomic data derived from NGS technologies are descriptive and static representing a snapshot of the genetic mutations in a small sample of tissue. With cancer being a constantly mutating disease, it is important to keep up with the evolving genetic composition to optimize therapy over time. Additionally, a mutation in one tissue sample may not reflect the broad array of mutations present throughout the entire tumor.

A number of emerging technologies appear to have the potential to address these limitations. Liquid biopsy technologies can identify circulating genetic information, are non-invasive, and can provide a near real-time result, thereby holding the promise of a valuable monitoring and treatment optimization tool. There are also a host of functional genetic and cellular technologies that provide more detailed information as to which mutations are most importantly related to the process contributing to a given patient’s cancer. With the improvements of existing NGS technologies and introduction of novel technologies that can supplement our understanding of cancer biology, we are moving closer to the promise of precision medicine for all patients. Continued investment in the space holds the promise of making these technologies ubiquitous, low cost, and increasingly informative. Moreover, the speed at which novel biological insights can be tested and validated in the clinical setting are likely to increase rapidly as our knowledge of the underlying biology increases.

When a company enters litigation, it must select litigation counsel. The management of the company would usually call its peers and ask about past experiences, review counsels’ fields of technical expertise, evaluate their success rates, and then invite a handful of law firms to make a pitch. The invited attorneys would propose a case strategy and predict their probability of success. The management would then select a counsel based on the presentations given and their personal impressions.

Ex Parte is a start-up formed about two years ago that is trying to change appellate counsel selection for patent cases.[1] The company collects data for every appellate case since 2004 and combines it with a database of all practicing lawyers. It then uses a proprietary algorithm to identify a lawyer with the highest probability of success for a specific case. When Ex Parte analyzed the recent appeal by 10X Genomics, the company predicted that an average lawyer would have a nine percent probability of winning the case but hiring one particular litigator would increase the probability of success to 25 percent.

The attorney recommended to 10X Genomics by Ex Parte expressed concerns over the ethical implications of this analysis. For one, the lawyer no longer did patent appeals. Also, according to the American Bar Association’s model rules for professional responsibility, lawyers should not create an “unjustified expectation” of a future result based on their part performance.[2] But this is what Ex Parte may be doing – creating expectations of future performance based on past statistics.

In the U.S., the work of Ex Parte is protected by First Amendment rights and companies are not restricted in using its predictions to choose a litigation counsel. However, if a lawyer were to project his own probability of success based on his past record, that would be considered unethical. France has a law completely banning software companies from providing legal and judicial analytics.[3]

Additional concerns revolve over the ability of the software to account for specific facts of the case and the quality of data available from law firm websites. In the case with 10X Genomics, Ex Parte recommended a lawyer who no longer practiced patent appeals because the law firm website had not been updated with his current status. Ex Parte’s information may also interfere with the client’s relationship with counsel, where the software analysis of the probability of success in a case contradicts the counsel’s.

Also, “the law of small numbers” cautions that percentages may appear greatly superior or inferior based on small data sets – the appellate practice is so small that most lawyers only get a few cases in their lifetime. In the example of 10X Genomics, the counsel recommended by Ex Parte had litigated 34 cases, of which 20 were identified as patent appeal cases. The Court of Appeals for the Federal Circuit, which is the sole appellate court for patent appeals, has heard more than 4,000 patent cases since 2004.

With computers infiltrating almost every aspect of our lives, the use of computer-assisted legal analytics is only expected to increase with time. With new technology comes the need to evaluate new ethical considerations. On one hand, making predictions about future success based on past legal achievements may be considered borderline unethical by the legal community. On the other hand, it can be argued that a company such as Ex Parte merely provides additional information and another viewpoint for clients with which to make informed decisions. Litigations are sometimes driven by unfounded beliefs in the strengths of a company’s position, and data from Ex Parte may inject rationality into corporate decision-making and facilitate settlements.

In addition to companies that are entering litigation, Ex Parte’s services are also retained by law firms seeking better marketing positions and financial firms that fund litigation. With litigation being a $100 billion a year industry, any attempt to help quantify outcomes is an understandable goal. The question is whether and where the lines should be drawn for an ethical balancing act.

[1] Roy Strom, “The algorithm will hire your patent lawyer now,” Bloomberg Law, 8/1/2019.

[2] ABA’s Model Rules of Professional Conduct, Rule 7.1.

[3] Sam Skolnik, “France’s judicial analytics ban unlikely to catch on in the U.S.,” Bloomberg Law, 6/5/2019.

English mathematician Alan Turing introduced the concept of a thinking computer in a paper in 1950, and American computer scientist John McCarthy coined the term “artificial intelligence” (or AI) during the Dartmouth Conference in 1956[1]. For a while, the idea of thinking machines was confined to the realms of science fiction, but recent gains in computational power and data access have made AI the most disruptive technology of the 21 century. The influence of AI has permeated numerous historically human activities, including farming, manufacturing, commerce, transport, medical care, rescue, and education[2]. AI is capable of analyzing ever-growing volumes of data in ever-shortening times, and has also become capable of generating creative ideas. The Creativity Machine, developed by Stephen Thaler in 1994, was the first known machine that generated an invention resulting in the US Patent No. 5,852,815[3]. The Invention Machine created by John Koza in 1995 created an invention described in US Patent No. 6,847,851. Thaler and Koza named themselves the inventors and did not disclose the involvement of AI to the Patent Office.

The American patent law system was praised by Abraham Lincoln as one of the three great advances in world history[4].However, the system is facing significant conceptual challenges with the advancement of artificial intelligence. Under current legal system, patents are granted to inventors who contributed to the conception of the invention. Conception is defined as a “formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention,” a clearly human-centric concept[5]. The Federal Circuit has repeatedly ruled that to be deemed to “perform this mental act, inventors must be natural persons and cannot be corporations or sovereigns”[6].

So, who is the inventor when the creative idea is produced by artificial intelligence? Under the current legal framework, it is not the programmer because (s)he did not conceive the creative idea produced by the computer and may not even know the problem posed to the computer by the user. It is not the user, who also did not personally come up with a solution. Accordingly, under the current legal framework there can be no patent for an invention generated by AI because no “natural persons” conceived the invention.

In some fields, expensive developments do not happen without patent protection. The prospects of obtaining lucrative license agreements or a competitive advantage provide strong economic incentives to innovate and to patent inventions. The goal of the patent system is to provide these economic incentives, and there is ample evidence that the U.S. patent system has been working as intended. The rise of AI will force us to reevaluate our definitions and criteria for patentability in the near future.

Despite the uncertain future of patentability of AI-generated inventions, many firms are invested heavily in the development of AI systems. As of March 3, 2019, there were at least 127 start-up companies focused on application of AI in drug discovery[7]. Sanofi signed a $300 million dollar deal with Exscientia. The VC firm Andreessen Horowitz launched a $450 million dollar fund focused on applications of AI in drug discovery. Recognizing the insufficiency of the current legal system in addressing AI, the United States Patent and Trademark Office held a meeting on “Artificial Intelligence: Intellectual Property Policy Considerations” on January 31, 2019. Possible considerations include changing the law to allow listing AI as the inventor or listing no inventors on the face of the patent, or changes to the law of obviousness. While no solutions were developed at the meeting, the growing recognition of the issue is the first step to developing new laws to meet the challenges created by advances in technology.

[1]   Exec. Office of the President Nat’l Sci. and Tech. Council Comm. on Tech., Preparing for the Future of Artificial Intelligence (2016.)

[2]   European Parliament resolution of 16 February 2017

[3]   Ryan Abbott, “I Think, Therefore I Invent: Creative Computers and the Future of Patent Law”, B.C.L. Rev. 57(4), 1079 (2016)

[4]   Abraham Lincoln, “Second Lecture on Discoveries and Inventions” at the Phi Alpha Society of Illinois College at Jacksonville (February 11, 1859), https://www.thenewatlantis.com/publications/second-lecture-on-discoveries-and-inventions

[5]   Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1376 (1986).

[6]   University of Utah v. Max-Planck-Gesellschaft Zur Forderung Der Wissenschaften EV, 734 F.3d 1315, 1323 (Fed. Cir. 2013); see also Beech Aircraft Corp. V. Edo Crop., 990 F.2d 1237, 1248 (Fed. Cir. 1993) (“[O]nly natural persons can be ‘inventors.’”); New Idea Farm. Equip. Corp. v. Sperry Corp., 916 F.2d 1561, 1566 n.4 (Fed. Cir. 1990) (“people conceive, not companies”).

[7]   https://blog.benchsci.com/startups-using-artificial-intelligence-in-drug-discovery

They came from far and near, all with similar purpose and ambition.

These women were a force to be reckoned with, including highly skilled strategic thinkers in the life science and healthcare sectors, from R&D to commercialization, operations, and regulatory affairs/compliance for both small and large cap companies.

Yet despite the high aptitude of this representative sample of female leaders, the stark reality is boards are only made up of 20% women.

The venue was the fourth annual meeting of Breaking into the Boardroom™ (BiB) held this past April. Deerfield, a co-founder, aims to change these statistics.

Speaker Jan Berger, MD, boiled the problem down to this when she addressed the crowd: “It used to be that the only diversity in the Boardroom was whether the male only members were sporting black, blue or grey socks.” Berger is president and chief executive officer of Health Intelligence Partners, a healthcare consultancy she founded.

The goal of BiB is to promote greater representation of female healthcare executives on boards within the public, private and non-profit sectors. Covering such topics as how to get a board seat, the role of governance, spectrum of board opportunities and legal and regulatory duties—the event lured 45 women from across the country, representing a broad cross section of experience from throughout the healthcare ecosystem.

Studies suggest that female-led companies are better run and bring greater returns[1], which begs the question why then are women still commercializing less and acquiring less venture capital when they do. On the upside, event speakers noted that men with daughters who have skin in the game tend to come around, suggesting their potential adaptability for change.

Among the reasons to account for the low number of female board members are a shrinking pool of candidates by the time the c-suite is reached with an upside down male to female ratio. In addition, stereotypes, unawareness, and unconscious bias amplify the problem, creating more barriers, said the presenters.

“We’re at the intersection of two industries—healthcare and finance—with bad statistics and must do better.”

Jim Flynn, Deerfield’s Managing Partner.

This issue may, in part, be reflected by other instructive statistics about women in the workplace, in general. According to Vicki Gaddy, Head of HR Strategy and Talent Acquisition at Deerfield, women tend to apply to jobs when they possess 100 percent of the skills required; men throw their hats in the ring when they have only 60 percent.

“The one lesson I learned too late was to advocate for myself.”

Conference attendee, Mariana Nacht, PhD, chief scientific officer of Vivid Biosciences and president of the board of WEST, Women in the Enterprise of Science and Technology, a non-profit focused on supporting women in STEM.

Approximately 60 percent of those surveyed who attended the event reported that they have been searching for a board seat between six months to one year. All respondents indicated an interest in being connected with a mentor who could advise them on best practices for securing a board seat, a majority of which also expressed wanting advice on how to negotiate salary.

And among the greatest challenges cited to securing a board seat were finding opportunities and a lack of experience, contacts, as well as the time needed to put into it.

As for feedback to an open-ended question in the survey, there was an interesting range of responses to this scenario:

Q: When a male board member exits the board meeting early to catch his son’s little league game, it’s respected. Historically, women haven’t received the same response. What could we do now to help inspire change and alter perceptions over the longterm?

All of the event’s speakers stressed the importance of networking and letting everyone know your interest: No one is going to come knocking at your door for doing a good job, advised the group.

Companies are looking for board members who can demonstrate value to their investors. It’s important to let people know you are looking for a board seat and to show a willingness to share your knowledge and experience by networking or participating on industry panels.

Deerfield Partner Adam Grossman, who participated in a BiB panel discussion on how to get a board seat.

Grossman added that anyone seeking a board seat should choose wisely. “Executives may be tempted to jump at any board seat. Your time is limited, make the most of what you have to give.”

Know your gifts and see how you might pair them up with an organization’s mission. Look outside of healthcare and think about how you could take your talents and apply them in a different industry where you could make a difference.

Presenter Bridget Duffy, MD, chief medical officer of Vocera

Speaker Claire Pomeroy, MD, president of the Albert & Mary Lasker Foundation, cautioned this should not be about getting a board seat, but focused on getting the right board seat.

“I’m not a rubberstamp kind of gal,” said Berger. “Ask yourself these questions: Am I going to learn something new? Can I make a difference? How do they handle conflicts and balance responsibility? Will I be compensated fairly? Look at the financials. Talk to the CFO. Look at Glassdoor.”

All in all, the speakers recommended doing one’s due diligence and sitting in as an observer before signing. One speaker decided not to commit after witnessing a fist fight at her sample board meeting.

“Anyone who’s going to join a board and think it’s easy, you need to be prepared for whatever comes your way,” said Berger who once had to skype at 3am from an African safari.

Pomeroy and other speakers suggest trying one’s hand at a non-profit board first. These are generally considered more flexible and less demanding compared to corporations that have year-round schedules. Though one speaker warned that one may be expected to contribute from his or her own pocket and to take a financial risk.

“Executive search firms will deliver the most diverse board candidates,” offered Pomeroy. Despite this view, representatives from Oxeon Partners, a healthcare executive search firm and co-founder of BiB, reported that men return calls much more frequently than women, who rarely do.

As for the best approach of newcomers to any board, Berger said, “Gently lean in, but listen closely and don’t speak until you get the rules of the road. Likewise, be thoughtful how you exit a board.”

Duffy emphasized the importance of women supporting other women, which she said is often not the case.

Pay it forward and backward. Replace female board members with females and recommend females for board seats. Break into other networks that are often male dominated, and do so under your terms.

Presenter Bridget Duffy, MD, chief medical officer of Vocera

Duffy continued, “not all networking has to happen fly fishing or on a golf course! Many male executives tell me they don’t know where to find top female talent – let’s be proactive and get out there and advocate and nominate each other. Let’s make a charter from this meeting: How Do We Mentor and Support the Next Generation, So That They Don’t Go Through What We Did.”

Breaking into the Boardroom is only one of several programs that Deerfield runs through which it is looking to make an impact. In addition to BiB, Deerfield also sponsors the Deerfield Fellows programs and plans to sponsor the Women in Science program.

To date, the Fellows program, for which only students who attend the gender and ethnically diverse CUNY system are eligible to apply, has engendered 9 fulltime associates at Deerfield.

CUNY students and alumni currently make up nearly 10 percent of Deerfield’s staff, including Fellows . “We pay them to learn about healthcare finance. This program increases the number of applicants and the best way said Flynn. “We could fight over a pool of scarce resources with all the other firms striving for diversity, or we could be proactive and increase the pool itself.”

The Women in Science program, slated to make its debut with an inaugural session this winter, will focus on female scientists and best practices toward commercializing their scientific discoveries.

“Bringing gender and ethnic diversity to the room will bring with it cognitive diversity. This will get you to the best results and answer,” says Leslie Henshaw, Deerfield Partner and BiB co-director.

“Providing voice to a diverse set of stakeholders introduces new ideas. And, in the case of healthcare, it could spark more inclusive and creative solutions to the intricate and complex set of issues associated with the industry’s intractable set of challenges.”

Leslie Henshaw, Deerfield Partner and BiB co-director.

Nacht says that she enjoyed this year’s BiB event but yearns for a time when it will no longer be needed.

[1]   https://www.ivyexec.com/career-advice/2017/women-led-companies-outperform-competitors/

While we wait to see which Trump administration drug pricing proposals may stick, some states have started to play the hand they have been dealt and formulate near term solutions to impact drug affordability on a more local level. Here we will take a closer look at the “Netflix model” that not one, but two states have implemented to make hepatitis C virus (HCV) drugs more affordable for Medicaid programs. Under such a model, a flat fee is paid for unlimited supply of drug in a defined population. Given the fragmented nature of state health Medicaid programs, it is too early to say if these might become standard nationwide, but these early initiatives are worth following to see if they gain wider traction either in HCV or therapeutic areas.

Historical barriers to HCV treatment among Medicaid and incarcerated patient populations

Though extremely potent direct acting antivirals (DAA) have been approved in the US since 2013, treatment has been out of reach for many infected individuals on Medicaid or who are incarcerated simply due to cost in light of ~$80,000 list price per treatment regimen. There had been a logistical component for the incarcerated population, where infected individuals were not always in jail or prison long enough to be treated, but this has become less of an issue as treatment duration has come down as drug potency across viral genotypes has risen. These simplified treatment regimens have also cut down on the manpower needed to treat making treatment logistically and economically more feasible in prison health centers. While 340B pricing (a mechanism for access to lower cost drugs available to certain hospitals) has been a route to more affordable drug costs for incarcerated patients in some states, this is only in a select few that have a prison system integrated into a university hospital that is otherwise already eligible for 340B pricing.

Louisiana leads

The state of Louisiana has led the charge to establish a Netflix model for drugs in that state. Around the beginning of John Bel Edwards’ term as governor of Louisiana that started in 2016, the Louisiana Department of Health received letters from both the Centers for Medicare and Medicaid Services and health advocates that bemoaned the availability of HCV drug treatment to Medicaid patients in that state. In 2017, only 388 of the total 35,000 HCV patients that depend on the state for healthcare were treated with Sovaldi[1]. In June of that year, the Department of Health, under Rebekah Gee, reached out to Dr. Peter Bach and team at Memorial Sloan Kettering Cancer Center’s Drug Pricing Lab, a think tank focused on drug pricing and health insurance coverage. Bach and company’s analysis of Louisiana’s predicament found the state would need to spend an estimated $760 million to treat all Medicaid patients in the state, when assuming an $80,000 per patient price tag, the rough list price of DAAs. Though Louisiana’s Medicaid budget is roughly half the state budget overall, the $760 million figure is larger than what the state spends on K-12 education, Veterans Affairs, and Corrections combined. Further complicating the healthcare investment is that Louisiana is required to produce a balanced state budget each year. According to Gee, the state reached out to DAA manufacturers directly to inquire about discounted pricing but were unable to negotiate better pricing through that route[2].

Louisiana then looked to emulate an approach taken by Australia for “lump sum remuneration” which that country instituted in 2015. Authorities negotiated a five-year arrangement for ~1bn Australian dollars for an unlimited volume of DAAs from suppliers. Australia has calculated they have been able to treat an additional 93,413 patients than initially projected without such an agreement[3].

Bach, along with Louisiana Senator Bill Cassidy and Mark Trusheim of MIT’s NEWDIGS, a drug pricing think tank, embraced the Australian effort and adapted a model for Louisiana’s use. Under the subscription model, Louisiana would commit to an annual capped spend in exchange for universal drug access for a specific patient population over a fixed period. Of note, Louisiana anticipated it might need a waiver from CMS to implement such a model, but learned it would instead be able to utilize aspects of the supplemental rebate program for Medicaid and the 340B program for the corrections population.

RFI to implementation

A request for information (RFI) was put forth in August 2018, which elicited comments from 13 stakeholders including providers, payers, and industry[4]. By January 2019, the state issued a request to choose a partner[5], followed by a March 2019 announcement that AbbVie, Merck, and Gilead Sciences, via its Asegua Therapeutics subsidiary, had submitted responses[6]. By the end of that month it had selected Gilead/Asegua, with expectations to have a contract in place by June 1 and an implementation date of July 1 this year[7].

All in all, this seems to be a fairly impressive three-year timeline from idea to execution. Shortly after the Louisiana news, the state of Washington announced it had selected AbbVie as the winning bidder of a similar subscription model effort that state is moving forward[8].

Other state initiatives to watch

Three states have gotten approval for State Plan Amendments (SPA) that enable Alternative Payment Models specifically for Medicaid prescription drugs in the form of outcome-based contracts with biopharma manufacturers. The SPAs allow for negotiated contracts for drug-specific outcomes measures around parameters such as adherence (patients taking medication on the frequency as prescribed, rather than skipping or missing doses) or reduced hospitalizations (drug regimens having kept patients out of the hospital). Michigan, Oklahoma, and Colorado’s efforts are all at various stages – Oklahoma’s initial one-year contract is scheduled to end in July 2019, with three separate contracts concluding soon after. Colorado and Michigan do not yet have contracts in place[9].

Surprise billing is another area where states are making headway. Surprise billing occurs in situations where a patient sees an out-of-network (OON) provider or facility, and his/her insurance only picks up a portion of tab given the OON status, leaving the patient with the remainder, known as balance billing. As of January 2019, nine states had enacted comprehensive protections, with another 16 having enacted some partial protections[10] against OON providers in emergency departments or in-network hospitals. The momentum has helped lead to proposals at the federal level, with multiple proposals already made in the current congressional session[11]. We await future initiatives at both the local and federal level.

[1]   https://www.npr.org/2018/07/19/630378124/louisianas-new-approach-to-treating-hepatitis-c

^[2]   https://www.healthaffairs.org/do/10.1377/hblog20190327.603623/full/

^[3]   https://www.nejm.org/doi/full/10.1056/NEJMp1813728

^[4]   http://ldh.la.gov/index.cfm/newsroom/detail/4749

[5]   http://ldh.la.gov/index.cfm/newsroom/detail/5020

[6]   http://ldh.la.gov/index.cfm/newsroom/detail/5072

[7]   http://ldh.la.gov/index.cfm/newsroom/detail/5097

[8]   https://www.hca.wa.gov/about-hca/health-care-authority-announces-abbvie-us-llc-apparently-successful-bidder-hepatitis-c

[9]   https://nashp.org/a-new-state-tool-to-manage-drug-costs-experts-share-insights-into-outcome-based-contracts-for-medicaid-pharmacy-claims/

[10]  https://www.commonwealthfund.org/blog/2019/state-efforts-protect-consumers-balance-billing

[11]  https://nashp.org/states-lead-on-surprise-medical-billing-protections-congress-poised-to-follow-2/

An invention is entitled to a patent if it satisfies several distinct requirements for patentability:

• The invention must be a “useful process, machine, manufacture, or composition of matter” (35 USC 101)
• It must be novel (35 USC 102)
• It must be not obvious (35 USC 103)
• It must be disclosed in sufficient detail to allow others to use the invention after the patent expires (35 USC 112)

Discoveries that are deemed to be abstract ideas or laws of nature are excluded from eligibility. 

The distinction between a discovery and an invention is not easy to draw, especially after a series of the recent Supreme Court and Federal Circuit decisions have comingled the distinct requirements for patentability.  The diagnostics industry particularly suffers from the muddled state of patent law.  In Mayo v. Prometheus, the Supreme Court invalidated a patent directed at dosing a patient, measuring a metabolite, and then titrating the dose of the medication.  The previously unknown correlation between the level of a metabolite and the required dose was viewed as an unpatentable law of nature combined with a known method for metabolite measurement.  In Association for Molecular Pathology v. Myriad Genetics, the Supreme Court invalidated patents for isolated pieces of DNA coding for previously unknown polypeptide sequences that determined the risk for developing breast cancer.  The correlation of the particular DNA sequence to cancer risk was again viewed as an unpatentable law of nature.  Then, in Ariosa Diagnostics v. Sequenom, the Federal Circuit invalidated a patent for testing fetal DNA using a sample of maternal blood.  The test eliminated the high risks associated with amniocentesis.  The court acknowledged that the test in its entirety was novel and useful.  However, the presence of the fetal DNA in maternal blood was deemed to be a law of nature combined with a routine detection technique.  The court felt bound by the Supreme Court’s earlier decisions and invalidated the patent.

In contrast, the Federal Circuit upheld the patent claim in Vanda Pharmaceuticals v. West-Ward Pharmaceuticals Int’l. The patent involved personalizing a patient’s dosing regimen based on the patient’s genotype.  The court deemed that a treatment based on diagnostics is eligible for protection, unlike the diagnostics themselves.  Many diagnostic companies now add a treatment step to diagnostic patent claims in an attempt to secure protection.  However, the reliance on this case is unfortunately misplaced.  Patent infringement requires proof that the infringer performed all the steps of the patented method.  Unlike pharmaceutical companies, diagnostic companies usually do not perform a treatment step, so proving infringement would be unlikely.

Some diagnostic companies such as those developing novel diagnostic hardware or sample processing protocols are not affected by these rulings.  However, many diagnostic companies rely on the discoveries of novel predictive correlations.  With no ability to patent correlations, the industry relies on trade secret protection.  The secrecy makes it more difficult to secure funding, validate discoveries, and gain broad acceptance.

In a series of public speeches last month, U.S. Patent and Trademark Office director Andrei Iancu recognized that the current law is difficult to interpret and apply because it mixes distinct legal concepts.  In his speech, Iancu asked, “How can a claim be novel enough to pass 102 and nonobvious enough to pass 103, yet lack an “inventive concept” and therefore fail 101? Or, how can a claim be concrete enough so that one of skill in the art can make it without undue experimentation, and pass 112, yet abstract enough to fail 101? How can something concrete be abstract?” “Overall, the key for our IP systems is for [patentability principles] to be reliable and predictable.”  “We must be clear, lest we perpetuate the current state. People should know up front. If nothing else, for the sake of a predictable ecosystem, let’s be transparent.”  Iancu recognized that a patent owner can attract investment capital only when the defensibility of the patent is clear.

Iancu has directed the USPTO to clarify and revise the guidelines for patent eligibility. However, the Patent Office cannot overrule the courts and will have to act within the margins of case interpretation.  Fortunately, these problems are being noticed by Congress.  On December 12, 2018, Sens. Chris Coons, D-Del., and Thom Tillis, R-N.C., sent invitations to companies, industry groups and intellectual property experts to discuss the need for legislative reform of patent eligibility standards.  These recent events offer the diagnostics industry hope for a clearer future.

In a past issue of this newsletter (September 2017) we took a broad look at the salient issues pertaining to the realm of biosimilars, including regulatory, legal, and commercial aspects of the debate. We refer readers here for an initial grounding if needed.  In the intervening time period, new developments have played out that highlight the significant barriers to commercial uptake that exist for these products.

Briefly, biosimilars are to biologics as branded drugs are to generics. However, both biologic drugs and biosimilars are by and large exceedingly more difficult to manufacture and thus bring to market as the production process is critical to the potency and release quality of these drugs within parameters established by the innovator product.  There are only yet 15 biosimilars approved in the US, and only five are actually commercially available, with the remainder being still blocked from the market due to patent exclusivity.  Contrast this to Europe, where 40 biosimilar products are approved.   

The cost of production for these products is not nearly at the level of generics. Take insulin, for example.  Insulin has a somewhat hybrid role in the US, as the first formulations were approved before the biologics approval pathway existed in the US, so its “biosimilars” are approved under what is known as the 505(b)2 pathway in the US, as opposed to the 351(k) pathway used by products whose innovator products are a true biologic (as determined by approval pathway). The market would seem ripe for a Lantus biosimilar, as the product has greater than $4bn in annual sales. Eli Lilly already has a biosimilar to Lantus on the US market, called Basaglar, which is annualizing greater than $600m through its first six quarters into launch.

Merck, through a collaboration with Samsung Bioepis had a tentatively approved biosimilar to Lantus from July 2017. However, a filing by Samsung Bioepis in October 2018 indicated Merck had cancelled development and commercialization contracts for the product. One analyst report cited the decision to pull out as being due to a review of the market environment and production costs of insulin biosimilars.  If a biosimilar as relatively “simple” as insulin can be difficult to manufacture at scale with attractive margins, then this certainly cannot bode well for more complex protein products to do the same. With Merck’s exit, only Mylan, in collaboration with Biocon, is developing another Lantus biosimilar. While district court litigation is ongoing, a launch for Mylan and Biocon’s product is expected in the 2020-2021 timeframe.

Similarly, Momenta recently announced it would be cutting its biosimilar efforts altogether, and simultaneously cutting half its staff while it refocuses on its non-biosimilar pipeline.

It’s a (rebate) trap

FDA Commissioner Scott Gottlieb further shed light on another major commercial obstacle for biosimilars, dubbed the rebate trap, in a March 2018 speech at the America’s Health Insurance Plans National Health Policy Conference[1]. The deep discounts offered on certain branded specialty drugs (often biologic), in the form of rebates and other payment or contractual mechanisms, in many instances can be upwards of 40% to attain preferred formulary positions from pharmacy benefit managers (PBMs) and health insurers. Often these negotiated discounts are volume-based, so the greater the utilization over competitive products, the greater the spread from the wholesale acquisition cost (WAC) to the net price to the plan, with PBMs and health insurers earning a percentage of the spread. Launched biosimilar products have generally been introduced to the market with roughly 15-20% discounts to the WAC of originator products, and thus are unable to displace the originator product. Biosimilars get stuck in a catch-22 situation, where they lack enough patient share for plans to consider moving them to a better formulary position but are hindered from getting more meaningful market share while they sit on a lower formulary tier. PBMs remain financially incentivized to limit the uptake of biosimilars to maintain the flow of rebate payments on originator products. Simply further discounting the biosimilar so that the WAC is on par with the net price of the originator is easier said than done for reasons noted earlier, namely that these drugs have turned out to be much costlier to develop and manufacturer than earlier predictions.

PBMs are attempting to move past the bad press they have received around the rebate trap and the general practice of collecting rebates. Express Scripts recently announced the launch of its Flex Formulary, which will consider authorized generics of branded drugs for inclusion on the formulary, in either a preferred or non-preferred position, and, importantly, discontinue coverage of the branded product. This could foreseeably open the door to more biosimilar adoption on this formulary.  The first products added to the Flex Formulary were Epclusa and Harvoni, two hepatitis C drugs made by Gilead Sciences. 

Humira in the hotseat

Gottlieb has gone so far as to suggest a competitive bidding scheme for biologics would be ideal[2], which is more akin to the experience in the EU. For example, Remicade sales have fallen over two-thirds in the three years since the introduction of its first biosimilar in the EU. Another closely watched drug is Humira, the world’s top-selling drug, as four biosimilars have just launched in the EU. One analyst report has said AbbVie, the maker of Humira, has won its first tender in Europe by offering an 80% discount off the price prior to the launch of biosimilars[3]. The deep discounting shows the extent to which the company is willing to go to hold onto market share.

Humira biosimilars in the US are still a pipedream, protected by a patent thicket the company has created with additional patents on formulations changes and extending life as new indications are approved. AbbVie has forged confidential legal settlements with several biosimilar makers, that will keep biosimilar copies of Humira at bay until 2023. In the meantime, AbbVie and Amgen are likely to continue to find themselves under increased scrutiny over the practice of repeated price increases for their top-selling drugs. A recent article cited nearly a 140% overall price increase for both of those drugs since January 2013[4]. Without biosimilar competition, and assuming continued price increases on par with recent history, both drug makers could see themselves in the hot seat in the court of public opinion.

[1] https://www.fda.gov/NewsEvents/Speeches/ucm599833.htm

[2] https://www.fda.gov/NewsEvents/Speeches/ucm613452.htm

[3] https://www.statnews.com/pharmalot/2018/11/01/abbvie-humira-biosimilars-prices/

[4] https://www.statnews.com/2018/11/14/humira-abbvie-amgen-enbrel-price-hikes-biosimilars/