UnitedHealth Group shares climb as Buffett's Berkshire Hathaway discloses stake in the insurer
Berkshire Hathaway bought around 5 million shares of UnitedHealth last quarter, according to a regulatory filing. The stake was valued at about $1.57 billion.
Buffett plans to retire as CEO at the end of the year after six decades of building Berkshire Hathaway. Many investors comb through Berkshire's filings every quarter because they like to follow Buffett's moves.
The filing doesn't make clear who at Berkshire handled the investment. Besides Buffett, Ted Weschler and Todd Combs also pick stocks, but they generally handle smaller portfolios and Combs also serves as Geico's CEO.
Besides stocks, Berkshire owns dozens of companies in a variety of industries including Geico insurance, BNSF railroad, several major utilities and an assortment of manufacturing and retail companies. The Omaha, Nebraska-based company's holdings include many well-known brands like See's Candy and Dairy Queen.
UnitedHealth has been dealing with a series of difficulties. Last month the company said that it was cooperating with federal criminal and civil investigations involving its market-leading Medicare business.
The health care giant said at the time that it had contacted the Department of Justice after reviewing media reports about investigations into certain elements of its business.
Earlier this year, The Wall Street Journal said federal officials had launched a civil fraud investigation into how the company records diagnoses that lead to extra payments for its Medicare Advantage, or MA, plans. Those are privately run versions of the government's Medicare coverage program mostly for people ages 65 and over.
The company's UnitedHealthcare business covers more than 8 million people as the nation's largest provider of Medicare Advantage plans. The business has been under pressure in recent quarters due to rising care use and rate cuts.
The Journal said in February, citing anonymous sources, that the probe focused on billing practices in recent months.
The paper has since said that a federal criminal health care-fraud unit was investigating how the company used doctors and nurses to gather diagnoses that bolster payments.
UnitedHealth Group Inc. runs one of the nation's largest health insurance and pharmacy benefits management businesses. It also operates a growing Optum business that provides care and technology support.
UnitedHealth's stock has mostly shed value since December, when UnitedHealthcare CEO Brian Thompson was fatally shot in midtown Manhattan on his way to the company's annual investor meeting. A suspect, Luigi Mangione, has been charged in connection with the shooting.
In April, shares plunged some more after the company cut its forecast due to a spike in health care use. A month later, former CEO Andrew Witty resigned, and the company withdrew its forecast entirely, saying that medical costs from new Medicare Advantage members were higher than expected.
UnitedHealth's stock jumped more than 12% in premarket trading on Friday. Still, the stock has lost roughly half its value in the past year.
Chapman writes for the Associated Press.
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Gilbert Dryden probably only has enough medication to get him through the end of October, his mother, Madison, figures. Seven-month-old Gilbert has a rare genetic condition called Barth syndrome, one that can have dire consequences, like heart failure, extreme muscle weakness and a dramatically reduced life expectancy. Children who die early often don't see their fifth birthday. Two infant deaths were reported within the past week, according to the Barth Syndrome Foundation. What's been keeping Gilbert alive and functioning relatively well, according to his family, is an experimental drug called elamipretide, made by Stealth BioTherapeutics. Small studies have suggested it's safe and effective in treating the ultra-rare illness. Just 150 people in the U.S. have the condition. 'Our kids are dying. We have seen that this drug works,' said Kate McCurdy, a co-founder of the Barth Syndrome Foundation. 'This drug totally saves the lives of babies.' After a more than decade-long process to bring the drug to market, the treatment's approval has repeatedly hit roadblocks with the Food and Drug Administration. One setback occurred in the spring, when an FDA inspection found problems at a Stealth manufacturing facility. The problems weren't made public, but apparently weren't egregious enough to warrant regulatory action. The company said the issues have been resolved. In late May, after an advisory panel voted earlier (in October 2024) to recommend the therapy, the FDA declined to approve it. The agency didn't reveal why. An ultra-rare disease like Barth syndrome with an ultra-small population of patients who can be tested for clinical efficacy faces barriers for FDA drug approval. There aren't enough patients to do robust, randomized clinical trials, McCurdy said. 'It is virtually impossible to conduct trials that yield data that are conclusive beyond a reasonable doubt. Statistically, you just can't do that,' she said. Weeks later and following a meeting between Needham, Massachusetts-based Stealth and the FDA in late June, the real bombshell came: The company said the agency informed Stealth on Aug. 4 that it would need to resubmit a new drug application — for the third time. It could use a special pathway called 'accelerated approval' in that submission, but the manufacturing issue would extend the timeline to review elamipretide for at least another six months, according to the company. Stealth said that no additional clinical data or safety data was requested. But without any course correction in the process, the private company could run out of money. The delay is devastating to families like the Drydens. 'When we heard this news, we immediately went to the fridge to count how many vials we have left, because that's how long we have this medication. That's the only guarantee we have right now that Gilbert is not going to die,' said Madison Dryden, 35, of Aurora, Colorado. 'It's the highest level of desperation.' On Monday, Stealth announced that it did submit its third application for approval of elamipretide — asking for an accelerated pathway under a significantly tighter timeline than what the agency initially recommended. What is Barth syndrome? Madison Dryden and her husband, Andrew, weren't sure what was wrong with Gilbert in the hours and days after his Christmas Eve birth in 2024. 'His heart function was so low. He was so sick, his body and his feet were purple, his hands were purple,' Dryden said. 'He couldn't eat.' Gilbert was admitted to the neonatal intensive care unit and received lifesaving care as doctors urgently tried to figure out a diagnosis. Within a matter of days, Dryden said, Gilbert was airlifted to Children's Hospital Colorado with a heart that was struggling to adequately pump blood. The underlying cause was soon revealed: Barth syndrome. The disease impairs cells' mitochondria, which are kind of like tiny batteries that generate energy for cells to function correctly. The chromosomal disorder almost exclusively affects boys. Roughly 85% of early deaths occur before age 5. Those who survive longer are usually given heart medications and may need a heart transplant. Kids with Barth syndrome often rely on drugs like beta blockers and ACE inhibitors to keep their hearts functioning as well as possible. Gilbert was fortunate, at least initially. He found a lifeline through access to the treatment from Stealth. Elamipretide, a daily injection, works by helping to repair the damaged mitochondria. In clinical trials, like the one the Drydens participated in, patients showed a 45% improvement in muscle strength and a 40% improvement in heart function, according to the drugmaker. Most participants have safely remained on the drug for over eight years. In October 2024, an advisory committee to the FDA voted 10-6 in support of the therapy, paving the way for the agency to clear the first drug to treat Barth syndrome. The FDA isn't required to follow the advisory committee's guidance, but it almost always does. A spokesman for the Department of Health and Human Services, which oversees the FDA, wrote in an email that the 'FDA did carefully consider the advice of the advisory committee members, including their rationale for their vote. While there is often a high rate of agreement between FDA and advisory committee recommendations,' the spokesman said, 'there is not always concordance.' 'Compelling medical need' for approval After the advisory committee's recommendation, the FDA's rejection was unexpected. 'It is a small sample size,' said a former FDA official who was involved in the drug approval process. The person asked not to be identified in order to speak freely. But the former official was quick to point out that given the advisory committee recommendation for approval, the 'incredibly compelling medical need' of those living with Barth syndrome and the small sample of individuals who seemed to have benefited from the treatment, it certainly appeared that elamipretide was going to make it across the finish line. A lack of continuity in leadership, however, may have added to the already difficult challenge of guiding the treatment through the final hurdles, the former official said. The FDA has seen many top officials leave the agency in recent months. 'Those who have taken over are not as familiar, or perhaps it'd be more appropriate to say they're inexperienced with how one does drug approvals, how one drives things forward, and they're also somewhat fearful of the current environment,' the former official said. 'And I think that's led to an adverse outcome for some of these rare disease products.' 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