Potential Medicaid Cuts Threaten Maternal Healthcare
In this week's edition of InnovationRx, we look at the impact of Medicaid cuts, a $400 million obesity bet, a study of bias in clinical AI, Amgen's AI hire from Nike, and more. To get it in your inbox, subscribe here.
Looming Medicaid cuts could hurt maternal health.
The House of Representatives and the Senate both agreed to a budget framework over the weekend. The framework calls for spending cuts to pay for tax cuts that disproportionately go to the rich and funds to prevent rising deficits while also increasing spending for Trump's deportations and other policy priorities. It's widely expected that Medicaid, which provides health insurance to people with low incomes, will be significantly impacted–up to $880 billion over the next 10 years, about a 29% cut.
Some of those cuts involve potential changes to Medicaid work requirements, which could remove insurance coverage from as many as five million people. That's likely to mean less revenue for hospitals, particularly in rural areas, where about 19% of patients are on Medicaid. Family caregivers and long-term care for elderly Americans are also likely to be hit.
Another area where Medicaid cuts threaten harm is maternal healthcare. The combination of Medicaid budget cuts, as well as those made to health services by DOGE, could particularly harm the health of women and children. Medicaid pays for more than 40% of all births in the country and covers more than one in four women aged 15 to 49.
Andrea Ippolito, Founder of Simplifed, a startup that provides telehealth support for pregnancy and postpartum care, told Forbes that cuts to Medicaid would not only immediately impact the health of women and children, but also cost the healthcare system more in the long run. 'If we don't serve them, that's just going to lead to folks showing up in the ER, to hospitalizations. It's going to cause significant strain on the system and those costs will increase.'
Ippolito also noted that many maternal health outcomes have gotten worse over the past decade, including mood disorders and gestational diabetes, and that cuts to Medicaid may exacerbate this. 'One of the major drivers of this is because many folks aren't attending that six-week postpartum visit or in general accessing postpartum care,' she said. 'We need to improve access to care to improve health outcomes and ultimately be able to contain costs.'
Kailera CEO Ron Renaud
In the summer of 2023, Dr. Amir Zamani, a 42-year-old Johns Hopkins–trained physician who is a partner on Bain Capital's life sciences team in Boston, was obsessed with obesity drugs. Novo Nordisk's Ozempic was taking America by storm, and Eli Lilly was nearing FDA approval for Zepbound. He'd spent months digging through reams of data from dozens of companies when he struck gold in an unexpected place: the portfolio of Jiangsu Hengrui Pharmaceuticals, one of China's biggest pharmaceutical companies. 'It was like, 'Wait a second, they're ahead of everybody else who's not Novo or Lilly,' ' Zamani told Forbes.
Results from Phase II clinical trials in China ultimately showed 59% of participants lost 20% or more of their body weight on an eight-milligram dose of the drug in 36 weeks, and side effects were mild. If those results hold, the drug could be especially useful for severely obese patients who need to lose more weight than they can on currently available medications.
It used to be that Chinese drug development was largely about creating 'me too' drugs for the local market. But over the past 10 years, with Beijing focused on building a native biotech industry, U.S.-trained Chinese scientists returned home and started innovating instead of mimicking. American outfits have spent $8.1 billion on upfront payments for Chinese drugs between 2020 and 2024, compared to $536 million in the preceding five years, according to biopharma deals database DealForma.
Zamani partnered with Atlas Venture and RTW Investments, and the three firms invested $400 million to spin up Kailera Therapeutics in October, launching with a license for the four Hengrui therapies and a plan to shepherd them to market. To run Kailera, the investors hired an all-star: Ron Renaud, a 56-year-old former biotech stock analyst with a nearly unequaled track record of building biotech startups and then selling them for big profits.
Read more here.
Last week, the FDA approved the combination of Opdivo and Yervoy, developed by Bristol Myers Squibb, for both liver cancers and colorectal cancers that can't be treated surgically or have spread to other parts of the body. The two drugs work together to block different mechanisms that prevent tumors from being recognized by the immune system, which helps the body fight them off. In clinical trials, the combination therapy reduced disease progression or death in colorectal cancer patients by 79% compared to chemotherapy. In liver cancer, the risk of death was reduced by 21% compared to the current standard of care.
When Dr. David Reese, Amgen's first chief technology officer, set about hiring a head of artificial intelligence last year, he looked at people who'd worked in consumer products, finance and other areas. He ended up finding one in shoes. Last August, he brought on Sean Bruich, who'd spent the past 11 years of his career working at Nike, as senior vice president for AI and data, a move that might seem almost laughably incongruous.
Like both its peer Big Pharma companies and smaller biotech startups, Thousand Oaks, California-based Amgen is counting on AI to both speed up the process of drug discovery and make its operations more efficient. But most of the best data scientists aren't working in healthcare–at least not yet. 'Most of the talent [in AI] lies outside biopharma, not within it,' Reese told Forbes.
Medtech company Science Corp., founded by Neuralink cofounder Max Hodak, has raised a $104 million investment round led by Khosla Ventures, according to Bloomberg. The company is developing a variety of technologies related to the brain, including brain-computer interfaces. It also has developed a retinal implant for treating blindness related to diseases such as macular degeneration that helped restore visual acuity in a recent clinical trial of 38 patients.
Medical large language models make decisions based on socioeconomic factors, not just medical necessity, according to a new study published in Nature Medicine. The study's researchers presented identical clinical symptoms to AI models, but supplied it each time with different demographic information about the patient. They found that the AI models suggested better care for white, wealthy patients–and more basic care for all others. The researchers also found that the models suggested mental health assessments for Black or LGBTQ patients much more often than was clinically indicated. The model's care recommendations were 'not supported by clinical reasoning or guidelines, suggesting that they may reflect model-driven bias, which could eventually lead to health disparities rather than acceptable clinical variation,' the researchers wrote.
Attovia Therapeutics raised $90 million led by Deep Track Capital to do early-stage clinical trials for its treatments for chronic pruritis (itchiness) and atopic dermatitis. The deal, which puts total funding at $255 million, is the San Carlos, California-based company's third in just two years. Before the latest round, venture capital database Pitchbook pegged its valuation at $280 million; Attovia declined to comment. Founder Tao Fu, a one-time consultant at McKinsey, was previously president of Zai Lab, a $3.4 billion (market cap) biopharma company based in the U.S. and China.
Inside federal health agencies, workers confront chaos and questions about how the NIH and other parts of HHS can continue to function.
Mehmet Oz has laid out some of his vision for his tenure as head of Center of Medicare and Medicaid Services.
The deep cuts to HHS threaten the integrity of the agency's information technology and datasets.
Ksenia Petrova worked in a Harvard lab to reverse aging after fleeing her native Russia. ICE jailed her eight weeks for a minor customs declaration infraction.
Closure of CDC's hepatitis lab leaves the country with no good way to measure the scale of the disease and imperils responses to it.
Researchers at the University of California, Davis developed an LSD analogue that has the potential to treat schizophrenia without causing hallucinations.
The FDA warns that fake Ozempic is in the U.S. supply chain after seizing hundreds of counterfeit injections.
Will Trump's retaliatory cuts on Harvard affect Boston's university-affiliaited hospitals? The government says no, and the head of Mass General Brigham believes they shouldn't.
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