Where’s the evidence? Healthcare unicorns lack the proof and credibility of peer-reviewed studies.

Another sign that too many healthcare unicorns are decoupled from the rock-solid fundamental reality–that they work. Healthcare unicorns–those startups valued over $1 bn–are unicorns because they have patents, processes, or a line of business that has immense potential to be profitable. The standard in healthcare, unlike other tech, is the peer-reviewed study. Is this process or device effective based upon the study? Does this drug looks like it will work? Is this study validating, encouraging? Peer-reviewed research takes place before a drug or device goes into clinical trials — a precursor. It ensures a certain level of disclosure, validation, and transparency at an early stage.

Instead, these unicorns largely rely on ‘stealth research’–a term coined by Dr. John P.A. Ioannidis, the co-director of the Meta-Research Innovation Center at Stanford University (METRICS). He summed it up in his latest peer-reviewed paper, “Stealth research: lack of peer-reviewed evidence from healthcare unicorns” (co-authored with Ioana A. Cristea and Eli M. Cahan), published in the European Journal of Clinical Investigation 28 Jan: 

In 2014, one of us (JPAI) wrote a viewpoint article coining the term “stealth research” for touted biomedical innovation happening outside the peer-reviewed literature in a confusing mix of “possibly brilliant ideas, aggressive corporate announcements, and mass media hype.”

The term ‘stealth research’ was prompted to the author by the practices of Theranos–ironically, a company that started and was funded in the Stanford nexus. By the time Dr. Ioannidis’ viewpoint paper was published in JAMA in Feb 2015, Theranos had ballooned to a $9 bn valuation. His paper was the first to question Theranos’ science–and Theranos aggressively pushed back against Dr. Ioannidis, including their general counsel attempting to convince the author to recant his own writing. Three years later, we know the outcome.

This latest study concludes that there is a real dearth of peer-reviewed research among healthcare unicorns–and that it’s detrimental. It measured whether these unicorns published peer-reviewed articles and whether they publish highly-cited (in other publications) articles; compared them against companies with lower valuations; and whether founders or board members themselves impacted the scientific literature through their own citations.

The meta-study looked at 18 current and 29 exited healthcare unicorns. Highlights:

  • Two companies–23andMe and Adaptive Biotechnologies published almost half of all unicorn papers–196 combined
  • Three unicorns (Outcome Health, GuaHao and Oscar Health) had no published papers, and two more (Clover Health, Zocdoc) had published just one
  • Seven of the exited unicorns had zero to one papers
  • In fact, ‘there was a negative, non-statistically significant association between company valuation and number of published or highly-cited papers’

As our Readers know, Outcome Health had a little problem around artificially inflated advertising placement wrapped in health ed and placed in doctors’ offices [TTA 29 Jan 18]. Oscar and Clover Health are insurers. Zocdoc…well, we know their business model is to get as many doctors to sign up in their scheduling app and pay as much as possible. But it’s the drug and device companies that are especially worrisome in a stealth research model. The paper points out among other examples StemCentrx, bought for $10.2 bn in 2016 by AbbVie for its Rova T targeted antibody drug for cancer treatment, was halted at Phase III because it was not effective. Acerta Pharma, also focused on cancer treatments, was bought by AstraZeneca for $7.3 bn; two years ago, AstraZeneca had to withdraw the Acerta data and admit that Acerta falsified preclinical data for its drug.

The conclusions are that healthcare unicorns contribute minimally to relevant, high-impact published research, and that greater scrutiny by the scientific community through peer-reviewed research is needed to ensure credibility for the underlying work by these startups. “There is no need for numerous papers. Discrete pivotal, high-impact articles would suffice.”

This Editor returns to #5 on Rock Health’s Bubble Meter: high valuations decoupled from fundamentals. Based on this, the lack of publishing represents risk–to investors and to patients who would benefit from better vetted treatments. To these companies, however, the risk is in having their technology or researched poached–as well as the investment in time and money research represents.

The study authors point out several ways to minimize the risk, including collaborating with academic centers in research, validation without disclosing all technical details, secure patents, and contributing their technology to other research. A higher-risk way is to “withhold significant publications until successful validation from agencies such as the Food and Drug Administration (FDA) or the European Medicines Agency (EMA)” but usually investors won’t wait that long. ‘Stealth Research’ paper, TechCrunch review Hat tip to David Albert, MD, of AliveCor via Twitter

CVS’ bid for Aetna–will it happen, and kick off a trend? (updated)

We have scant facts about the reported bid of US drugstore giant CVS to purchase insurance giant Aetna for a tidy sum of $200 per share, or $66 billion plus. This may have been in development for weeks or months, but wisely the sides are keeping mum. According to FOX Business, “an Aetna spokesperson declined to chime in on the reports, saying the company doesn’t “comment on rumors or speculation” and to Drug Store News, a CVS Health spokesperson did the same. Aetna’s current market cap is $53 billion, so it’s a great deal for shareholders if it does happen.

Both parties have sound reasons to consider a merger:

  • CVS, like all retailers, is suffering from the Amazon Effect at its retail stores
  • Retail mergers are done with the Walgreens Boots AllianceRite Aid merger going through considerable difficulties until approved last month
  • The US DOJ and Congress has signaled its disapproval of any major payer merger (see the dragged-out drama of Aetna-Humana)
  • It has reportedly had problems with its pharmacy benefit management (PBM) arm from insurers like Optum (United HealthCare), and only last week announced that it was forming a PBM with another giant, Anthem, called IngenioRx (which to Forbes is a reason why this merger won’t happen–this Editor calls it ‘hedging one’s bets’ or ‘leverage’)
  • Aetna was hard hit by the (un)Affordable Care Act (ACA), and in May announced its complete exit from individual care plans by next year. Losses were $700 million between 2014 and 2016, with over $200 million in 2017 estimated (and this is prior to the Trump Administration’s ending of subsidies).
  • It’s a neat redesign of the payer/provider system. This would create an end-to-end system: insurance coverage from Aetna, CVS’ Minute Clinics delivering care onsite, integrated PBM, retail delivery of care, pharmaceuticals, and medical supplies–plus relationships with many hospital providers (see list here)–this Editor is the first to note this CVS relationship with providers.

We will be in for more regulatory drama, of course–and plenty of competitor reaction. Can we look forward to others such as:

  • Walgreens Boots with Anthem or Cigna (currently at each others’ throats in Delaware court
  • Other specialized, Medicare Advantage/Medicare/Medicaid networks such as Humana or WellCare?
  • Will supermarkets, also big retail pharmacy providers, get into the act? Publix, Wegmans, Shop Rite or Ahold (Stop & Shop, Giant) buying regionals or specialty insurers like the above, a Blue or two, Oscar, Clover, Bright Health….or seeking alliances?
  • And then, there’s Amazon and Whole Foods….no pharmacy in-house at Whole Foods, but talk about a delivery system?

Also Chicago Tribune, MedCityNews.

UPDATED. In seeking an update for the Anthem-Cigna ‘Who Shot John’ court action about breakup fees (there isn’t yet), this Editor came across a must-read analysis in Health Affairs 

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