NantHealth/Soon-Shiong ch. 2: pay for play research at University of Utah?

Stat has returned to digging in the NantHealth/Dr Patrick Soon-Shiong garden to see if any more bones turn up. The writer examined the $12 million donation to the University of Utah and confirmed the POLITICO assertion that most of it ($10 million) went right back to NantHealth through a contract arrangement to pay for genetic sequencing of blood, tissue, and tumor samples. In this article are snippets of emails dating back to 2014 that indicated that even though NantHealth was at the time of the deal not yet capable of performing the work, they were specified along with the Utah Genome Project as one of the two teams to do the genome analytics. NantHealth by their own admission delayed for a few months when due in 2015 as they were not yet ready. The deal with Utah also gave NantHealth access to anonymized genetic and health data on hundreds of patients, specifically disease traits in families, their medical conditions, and relationships, if any, to others providing samples for analysis. This would have been of value not only to GPS Cancer but also to yet another Soon-Shiong company, GPS Heritage, which assesses a patient’s risk of inherited and rare diseases.

Pay for Play, which is what marketing types like your Editor call arrangements like this, removes any objectivity from this research. This is in addition to the donation arrangements, which present all sorts of taxation implications.

Regrettably, instead of trying to clear things up or being upfront about this business arrangement, Dr Soon-Shiong has chosen to make this a War of the Tweets, accusing Stat and POLITICO of bias, and to hide behind a now long-ago meeting with President Trump. (Sorry, Doctor, POTUS has other things on his mind like North Korea, ISIS and the American Economy–and he tweets more skillfully than you.) Everyone knows that finding treatments and cures for cancer is noble work, but there is also the appearance of cutting corners and a general air of dubiousness around the whole NantHealth enterprise. Mr Market is having its say as well in the share price. By the way, NantHealth lost $184 million in 2016Stat, Healthcare IT News.

Read Chapter 1, ‘Another Theranos on boil?’, here.

Another Theranos on boil? Patrick Soon-Shiong’s companies and the NantHealth Foundation (update)

Billionaire Patrick Soon-Shiong‘s drive to take down cancer through vaccines, genomics, software, and related health tech is one of the key missions of his NantHealth group and also the Foundation. Both fund research efforts such as Cancer Breakthroughs 2020, which is supported by former Vice President Joseph Biden. Reportedly, the well-wired Dr Soon-Shiong wooed President Trump for a role in his new Administration, one that has not materialized. In February, we noted his appearance at HIMSS17 promoting his cancer vaccine which was approved by FDA to advance to later clinical trials, and also unveiled Nant AI and the Nant Cloud–but also an article published in Stat that gazed through the NantHealth veil and found little to compliment, including the trademark infringement suit brought by the MD Anderson Cancer Center in Texas.

Apparent self-dealing among various NantHealth companies and investors, which started to be unwrapped in Stat, is now further investigated in a long POLITICO article. The report looks at transactions among the Chan Soon-Shiong NantHealth Foundation, the NantHealth companies, and other non-profits controlled by Dr Soon-Shiong, then at charitable donations to universities and hospitals that in turn support his research and other companies. Three citations in the article will attract the Reader’s notice (Editor’s emphasis):

Of the nearly $59.6 million in foundation expenditures between its founding in 2010 and 2015, the most recent year for which records are available, over 70 percent have gone to Soon-Shiong-affiliated not-for-profits and for-profits, along with entities that do business with his for-profit firms.

The foundation contributed $3 million out of a total of $12 million donated by Soon-Shiong-controlled entities to a University of Utah program to map the genomes of 1,000 state residents. University officials say they let Soon-Shiong’s entities write the grant specifications. The specifications gave a major advantage to his for-profit firms, which got the $10 million gene-mapping contract.

Soon-Shiong-controlled charities gave a total of $15 million — including $10 million from the NantHealth Foundation — to a fund that benefited Phoenix Children’s Hospital, which concluded a pair of deals with Soon-Shiong’s for-profit companies for many millions of dollars.

It’s dizzying, certainly by design. If true, it appears that Dr Soon-Shiong’s favorite charities happen to be his own businesses, which raise all sorts of ethical and legal questions. The investigation also calls into question not only these dealings but also the Foundation’s tax-exempt and additional special status as a medical research organization. Will the IRS come calling? How Washington’s favorite cancer fighter helps himself    Also Healthcare IT News, which delightfully called them ‘funding indiscretions’.

Updated. A canary in the coal mine is the NantHealth (NASDAQ: NH) share price, which has crashed from a 52-week high of $21 to a current value of $4.32. To clarify, it has been in precipitous decline since January, and not just from this report. There is trouble in Culver City. A quick look over at Yahoo!Finance news items now reveal a brace of law firms offering class action lawsuits to shareholders who believe they have suffered losses due to “materially false and misleading statements”, now updated for the above information.

Pharma company ‘breaks the Internet’ with Kim K, gets FDA testy

But it may break them…well, give them a fracture. Or a good hard marketing lesson. Specialty pharma Duchesnay thought it had hit the jackpot with negotiating a promotional spokeswoman endorsement from pregnant celebrity Kim Kardashian of its morning sickness drug Diclegis. The Kardashian Marketing Machine cranked up. Kim (and mom Kris Jenner) took to Instagram, Facebook and Twitter in late July with (scripted) singing of Diclegis’ praises to their tens of millions of followers. The Instagram posts linked to an ‘important safety page’ a/k/a The Disclaimers. That wasn’t near enough for the Federal Drug Administration (FDA) which governs the acceptable marketing of all drugs in the US. On August 7th a tartly worded letter arrived at Duchesnay’s Pennsylvania HQ cited multiple violations of marketing regulations, notably risk information, and told Duchesnay to cease these communications immediately or withdraw the drug, which would be highly unlikely as it is successful. They also were require to provide “corrective messages” to the “violative materials”.

Our takeaway:

* Duchesnay reaped a bounty of free media (see below), on top of the (undoubtedly expensive) Kardashian endorsement. Yes, they did pay the cost of a FDA nastygram and a legal response, and the warning will live on in their file. However, a lot of target-age women now know Diclegis and others know about the relatively obscure Duchesnay.

* This was a calculated marketing risk that tested the boundaries of social media and celebrity endorsement. (more…)

Hackermania running wild, 2015 edition

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Do we need the Hulkster Running Wild against Hacking? It’s so heartwarming to see the mainstream press catch up to what your Editors have been whinging on for the past few years: that healthcare data is the Emperor With No Clothes. Here we have Reuters and the New York Times with a case of the vapors, seeking a fainting couch. Reuters dubs 2015 ‘The year of the healthcare hack’. The FBI is investigating the AnthemHealth breach, while their counterparts UnitedHealth, Cigna and Aetna are in full, breathless damage control mode. The Times at least delves into the possibility that it was at least partially instigated by China and the People’s Liberation Army (PLA) unit that trolls for intellectual property.

Our Readers, savvy to your Editors’ warnings since at least 2010, were aware that the drumbeat accelerated this past summer. (more…)

Politico: massive hacking of health records imminent

Politico is a website (and if you’re in Foggy Bottom-ville, a magazine) much beloved by the ‘inside government’ crowd and the media ‘chattering classes’. With some aspirations to be like Private Eye but without the leavening sharp satire, the fact that they’ve turned their attention to–gasp!–the potential hackathon that is health records is amazing. They mention all the right sources: Ponemon, HIMSS, the American Medical Association, BitSight, AHIMA. In fact, the article itself may be a leading indicator that the governmental classes might actually do something about it. This Editor applauds Politico for jumping on our battered Conestoga wagon with the other Grizzled Pioneers. We’ve only been whinging on about data breaches and security since 2010 and their researchers could benefit from our back file.

And speaking of 2010, the Department of Health & Human Services (HHS) is doing its part to close the budget deficit by collecting data breach fines–$10 million in the past year. A goodly chunk will be coming from New York-Presbyterian Hospital/Columbia University Medical Center: $4.8 million for a 6,800 person breach (iHealthBeat) where sensitive records showed up online, readily available to search engines. And yes, we covered this back on 29 Sept 2010 when breaches were new and hushed up. Politico: Big cyber hack of health records is ‘only a matter of time’

Oddly, there is nary a mention of Healthcare.gov.