TTA’s Blooming Spring 3: Masimo’s cyberattack takes it down, WW’s Chapter 11, Neuralink’s ALS success, UHG’s 1K bet on AI apps, NIH/CMS autism data project, a look at payer earnings, more!

May 9, 2025 | by

9 May 2025

This week’s drama was all about Masimo, developing literally as this Editor was writing. Their website outage was revealed to be from a cyberattack that took down nearly all their systems. Not good for a monitoring/tech company. But their good news was that they sold Sound United to Samsung–2/3rds off. The others deserving of more attention are Neuralink’s successful BCI implant in an ALS subject and UHG’s 1,000 app bet on AI. Not so dramatic: WeightWatchers’ prepackaged, quick bankruptcy, the NIH/CMS autism data project, and Amedisys divesting to salvage their UHG sale. 

Short takes: HHS forms NIH/CMS autism data project; Oscar Health beats Street w/Q1 $275M net; Centene’s $1.3B earnings; UHG has class action suit on earnings, 1K AI apps in production; Cedars-Sinai and Redesign Health partner on development; FDA, Lilly, Novo Nordisk win vs. compounders (Big step forward for autism research)

News roundup: WeightWatchers in 45-day prepackaged Ch. 11, Neuralink BCI successful in ALS subject, telehealth VR reduced TMD pain–study, AliveCor maxes up KardiaMobile 6L, TytoCare-Allina Health partnership, UHG-Amedisys divest some more (WW losing runway, a Neuralink win, Amedisys divesting to save their two-year-old UHG deal)

Breaking–Masimo Mystery SOLVED–cyberattack, website down for days, new websites up–and where’s the public explanations? Sound United sold. (Another cleanup on Aisle 10–the Sound United albatross flys off)

From last week: Cherry blossoms are starting to fall, much like Teladoc’s revenue for Q1 in our lead story. Can their acquisition of a small virtual mental health provider with insurance coverage help turn around BetterHelp? And what about their main business? Novo Nordisk would rather partner than fight with teleprescribers Hims & Hers, Ro, and LifeMD for GLP-1 Wegovy–will this be a trend? Commure adds to its ‘house that Jack built’ tech stack with a HealthTap partnership. And Masimo’s latest episode of its ongoing soap opera is that its former CEO (and major shareholder) is claiming ownership of shares as part of his severance–but they haven’t been granted and very much in dispute. (Irony alert: they’ve increased in value since his departure!)

This just in: Teladoc acquires UpLift for $30M, bolstering struggling BetterHelp telemental health; Q1 revenue down 3% (Can this telemental health be saved with one acquisition?)

News roundup: Hims, Ro, LifeMD and Novo Nordisk partner on Wegovy prescribing (updated); Commure partners with HealthTap for virtual care after hours; WebMD Ignite adds texting to member health ed; hellocare.ai raises $47M for virtual nursing  (When you can’t beat ’em in weight loss meds, join ’em. With a side of Commure’s interesting M.O. on acquisitions.)

Masimo updates: former CEO Kiani claims 13.2% ownership, and a review of the new management’s style (updated) (The soap opera continues)

Holding this over: The weekend read: why SPACs came, went, and failed in digital health–the Halle Tecco analysis/memorial service; why OpenAI is going to be a bad, bad business (Grab the cuppa and lunch for a good read and podcast. Updated–Also Tecco’s blog post on why she quit being an angel investor.) 

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Short takes: HHS forms NIH/CMS autism data project; Oscar Health beats Street w/Q1 $275M net; Centene’s $1.3B earnings; UHG has class action suit on earnings, 1K AI apps in production; Cedars-Sinai and Redesign Health partner on development; FDA, Lilly, Novo Nordisk win vs. compounders

May 8, 2025 | by

NIH, CMS to create autism data platform to enable research. The National Institutes of Health (NIH) and the Centers for Medicare & Medicaid Services (CMS), both under Health & Human Services (HHS), are partnering to enable NIH to build a real-world data platform. The purpose is to advance research around the root causes of autism spectrum disorder (ASD) that now affects 1 in 31 US children, according to HHS. The data gathered include claims data, electronic medical records, and consumer wearables focused on Medicare and Medicaid enrollees with a diagnosis of ASD. The first step establishes a data use agreement under CMS’ Research Data Disclosure Program.

Researchers will focus on autism diagnosis trends over time, health outcomes from specific medical and behavioral interventions, access to care and disparities by demographics and geography, plus the economic burden on families and healthcare systems.

The pilot program, intended to be a model for other conditions, will create a secure tech-enabled mechanism to enhance data sharing with timely, privacy and security compliant data exchange.  HHS release, FierceHealthcare

Payers, other than UnitedHealth, had an upbeat Q1.

  • Oscar Health, the feisty provider of ACA exchange individual and small group plans, notched a Q1 net income of $275 million with adjusted EBITDA of $329 million on revenue of $3 billion, up 42% from Q1 2024. Membership exceeded 2 million, up 41% from prior year. The ever-feisty CEO Mark Bertolini (center) railed on the earnings call against a shortened Federal enrollment period cutting off at 15 December versus January, as well as other enrollment changes. Oscar release, FierceHealthcare
  • Centene Corporation, one of the main rivals to UnitedHealth Group and a significant player in Medicaid state plans, had a decent Q1 turnaround with $1.3 billion in earnings and a  17% jump in premium and service revenues to $42.5 billion from $36.3 billion in Q1 2024. Their current membership versus Q1 prior year was down about 500,000 with the losses in Medicaid and traditional Medicare. They also increased their 2025 premium and service revenues guidance range by $6.0 billion to a range of $164.0 billion to $166.0 billion due to ACA exchange plans and Medicare Advantage (MA) revenue forecast performance. However, it’s projected by analysts that Centene will exit the Medicare Advantage market after this year in Alabama, Massachusetts, New Hampshire, New Mexico, Rhode Island and Vermont–about 3% of MA membership. CEO Sarah London criticized proposed cuts to Medicaid. Centene release, HealthcareFinance
  • UnitedHealth Group, after an anemic Q1 financial report driven by increased utilization and rising costs, cut its 2025 earnings per share (EPS) guidance by 12% to between $26 and $26.50 (Healthcare Dive). This just in: a shareholder group filed in Federal Court in the Southern District of New York on violations of securities laws affecting share price. It centers on the 2025 financial guidance provided prior to Brian Thompson’s assassination and how group CEO Andrew Witty did not account for: 1) the impact of that act but doubled down on the EPS forecast, 2) the increased scrutiny around the company for denials of claims even prior to the act, and 3) the general ill will generated as more information reached the general public. The affected group are those shareholders purchasing UHG stock between 3 December 2024 and 16 April 2025. Healthcare Dive, SDNY filing
  • Meanwhile, UHG has doubled down on AI development, totaling over 1,000 apps. According to a report in the Wall Street Journal, the company has these apps in production in their health delivery and pharmacy units, transcribing conversations from clinician visits, summarizing data, helping process claims, powering customer-facing chatbots, and in engineering to write software. According to chief digital and technology officer Sandeep Dadlani, half of the apps use generative AI and the remainder a more “traditional” form, without explanation of “traditional”. According to Dadlani in the article, “AI has a role to play in the claims evaluation process, but it will never be allowed to deny a claim”. Software, not necessarily AI powered but usually rules-based or using algorithms, ‘auto adjudicate’ 90% of UHG claims. UHG was sued in Federal Court as far back as 2023 in using an AI-powered application to evaluate and deny claims.

Redesign Health gets freshened up with a Cedars-Sinai partnership. Redesign Health is a combination funder and company builder which has launched over 60 healthcare-related companies, some clear successes such as Calibrate (weight loss) and Jasper Health (cancer care navigation), with others on the development curve such as Vault Health and Uptiv Health. They announced a partnership with the Cedars-Sinai health system in Los Angeles to add their clinical expertise and innovative research. Other strategic value additions through the new partnership are tapping into funding support, access to clinical environments within Cedars-Sinai’s network, and their dataset for validation of technologies and design. Redesign release

And in the pharma compounders versus Big Pharma war, the former have lost two battles. The compounder’s trade group, the Outsourcing Facilities Association (OFA), had separate lawsuits filed in Texas to force the FDA to reclassify both tirzepatide and semaglutide as still in shortage, which would permit compounding pharmacies to produce weight loss drugs with these active ingredients. The Texas judge found yesterday (7 May) for both FDA and Eli Lilly, the producer of Zepbound, that tirzepatide was no longer in shortage, which closed the door on the OFA. At the end of April, the same Federal judge ruled against the continued compounding of semaglutide, the active drug in Novo Nordisk’s Wegovy and Ozempic [TTA 27 Feb]. 22 May is the end date for the large compounding pharmacies for semaglutide, while smaller state-based compounders must cease immediately. Biospace 8 May, 25 April  Novo Nordisk’s new partnerships for Wegovy-based weight loss prescribing: TTA 1 May, 8 May

These just in: drug compounders sue FDA over semaglutide scarcity removal; Sycamore’s Walgreens buy plans begin to show

February 27, 2025 | by

What the telehealth prescribers can’t do, the compounders are. A major drug compounder association, the Outsourcing Facilities Association, along with member North American Custom Laboratories, LLC, both based in Texas, filed suit yesterday (24 February) against the FDA to vacate the final action removing semaglutide, the active ingredient in GLP-1 drugs, from the shortage list. The FDA announced that it was being removed from the shortage list effective April-May, after months of compounders legally creating semaglutide-based weight loss drugs as permitted during the shortage. This was certainly good news for Novo Nordisk, the pharmaceutical company that developed and markets Ozempic and Wegovy [TTA 25 Feb].

The compounding was a boon for telehealth providers such as Hims and Hers, Ro, 23andMe (Lemonaid), Future Health, Weight Watchers, Lark, and many others. It allowed them to customize injectable formulations for customers on weight loss programs at a far lower cost than standard branded products. The FDA allows this only during times of shortage (compounded by Section 503A pharmacies and Section 503B outsourcing facilities as “essential copies” of FDA-approved drugs). Exceptions are also made if the standard drug is in some way inappropriate for the patient who then medically requires a customized version, e.g. with adjusted dosage, method of dosing, or added/deleted ingredients, but these are not ‘mass’ circumstances or situations. 

Among the grounds presented in the suit against the FDA are that the shortage is still going on with delays in prescription filling, leading to patient harm; that FDA’s delisting was arbitrary without the required notice with public comment nor was it published in the Federal Register; and that it is ‘arbitrary and capricious’. Novo Nordisk has admitted publicly that supply constraints could still exists. 

Continued ‘customization’ is vital to telehealth prescribers’ revenue, while branding is vital to the pharmaceutical developers undercut by compounding. In 2024, Hims alone earned $225 million in revenue from compounded semaglutide and other GLP-1 type drugs. Both Novo Nordisk and Lilly (Zepbound) have pushed back on the compounders on safety and risk, along with lower prices in new delivery types such as vials versus autoinjectors.

The suit was filed in the US District Court for the Northern District of Texas. Biopharma Dive

More intriguing details if Sycamore Partners takes Walgreens Boots Alliance private. Financial Times reported via Reuters that according to the usual “people familiar with the matter”, Sycamore’s plan is to separate WBA into three parts, like Gaul: US retail pharmacy, Boots UK, and US Healthcare (VillageMD, CareCentrix, and Shields Health Solutions). They would have distinct capital structures. There’s minimal information beyond that. Sycamore is not expected to have difficulty financing the take-private, and WBA chairman Stefano Pessina is expected to have an ownership stake. The news drove WBA shares up today about 5% and 10% in the last five days. But the news seems to be moving along. VillageMD’s on the market is assumed but it is not certain any sale would complete in time. Crain’s Chicago Business

News roundup: DOJ investigating UHG on Medicare Advantage billing upcoding; Teladoc’s BetterHelp therapists using AI?–a short seller alleges; Hims whacked by FDA ending compounded GLP-1s (updated); some fired FDA staffers in CDRH reinstated

February 25, 2025 | by

UHG’s annus horribilis gets more horribilis. News broke on Friday 21 February via the Wall Street Journal (paywalled) that UnitedHealth Group is reportedly under investigation by the US Department of Justice–again.  The DOJ is looking at UHG’s billing practices for members covered by UnitedHealthcare Medicare Advantage (MA) plans on diagnoses that were made to generate extra payments, a practice known in the industry as upcoding. This also involves the many practices that UHG owns or has relationships through Optum, about 10% of primary care practices. These practices are receiving visits from DOJ investigators, certainly something that would strike some fear into any doctor’s or practice manager’s heart. 

The WSJ reported that two providers cited in their article provided documentation, while another person said that the Department of Health and Human Services’ Office of Inspector General (HHS-OIG) is involved in the probe.

It’s a real Mound of Misery for UHG.

  • MA plans and their set rates for additional benefits not covered under original Medicare have been under HHS/CMS scrutiny in the past year, and health plans have been running higher costs than anticipated as covered patients have returned back to care.
  • UHG’s OptumRx unit last year was reported as under investigation on antitrust grounds.
  • Optum’s Change Healthcare (contested by DOJ but approved) is still recovering from an unprecedented hacking and ransomwaring, with the huge expense of restoring systems plus notification and providing a reported 100 million with free credit monitoring services.
  • The proposed $3.3 billion deal with Amedisys for home care continues to be delayed by the DOJ antitrust suit.
  • Their UnitedHealthcare president was assassinated in New York, and his (alleged) killer is starting his trial here, a spectacle which will go into the summer. But the issue that supposedly tipped off the murder–claim denials and denials of care due to policies and the use of AI, isn’t going away–jumping in the fray is megainvestor Bill Ackman.

While Federal involvement with health plans comes with the territory, the adversarial relationship with DOJ far exceeds the norm. The share price reflects it, having cracked 26% in the past six months. Those accepting the 30,000 buyouts on offer may be grateful if they take them. CNBC, FierceHealthcare

Another backwash from the use of AI? Teladoc is receiving some bad publicity it can ill afford. There are allegations of their therapists using AI-drafted responses with patients–and this apparently is becoming more frequent. It’s been percolating on social media boards such as Reddit (see example here) for some time. The latest is a report from a short seller* of Teladoc, Blue Orca Capital, that alleges that BetterHelp therapists not only use ChatGPT for text responses outside of live sessions (messaging), but also during live chat sessions. This goes against Teladoc’s own stated policy against AI therapy as ‘dehumanizing’  in a lengthy blog post ranging from social media to job loss as a result as AI. Blue Orca includes first hand information from two BetterHelp patients, an allegation from a competitor that BetterHelp doesn’t care, and that therapists are actually incentivized on the word length of responses they give to a patient, overloading their schedule, and being available 24/7 to patients paying a reported $400/month. Given BetterHelp’s prominence in Teladoc’s earnings–according to them “accounting for 40% of the Company’s revenues and adjusted EBITDA since FY21”, adding in their other financial factors, their dim view is jarring if you like or own TDOC.  Developing. Hat tip to HIStalk 2/24/25

*Editor’s note: Blue Orca Capital, as a short seller, profits when a stock goes down. Blue Orca has a short position in TDOC. So our Readers should take their position into account. Short sellers are also prohibited by securities law from spreading false information about a stock for the purposes of profiting from its decline (Rule 10b-5 under the Securities Exchange Act of 1934.)

The Feds giveth and taketh away Hims’ weight loss business. Updated information. Friday’s good news was that FDA has reclassified the shortage of semaglutide, the active ingredient in GLP-1 drugs, as ‘resolved’, meaning It’s Over and it’s easier to get your Wegovy, Ozempic, Zepbound, etc. prescription. The bad news is that online prescribers that were authorized by FDA to use less expensive compounding to approximate or customize the branded versions of these drugs for weight loss, are now prohibited from doing so. They have till April or May to transition to branded injectable versions. This affects the bottom line of all these telemedicine prescribers such as Ro, Weight Watchers, Future Health (a heavy local radio advertiser), 23andMe, and Hims & Hers. Hims, the showiest in class, took a breathtaking 25% hit on their stock between Friday and Monday.

It is not only cost of branded drugs but also that so many competitors have jumped into the field, creating another shortage of the branded drugs, that looms. Suppliers of compounded drugs, the high volume compounding pharmacies (not your corner pharmacy that does compounding based on Rx), may be reluctant to continue supplying telemedicine prescribers in reasonable fear of FDA action or pharma lawsuits that could put them out of business.

Hims also publicly took the hardest line against the pharma companies, implying in their now infamous Super Bowl commercial that their obesity drugs are priced “for profits, not patients”, unlike Hims’, of course. Novo Nordisk, the Ozempic and Wegovy manufacturer, in turn has taken a hard stance against the compounders pointing out that a compounded version isn’t standardized nor FDA-approved for safety and efficacy.

A custom, compounded version of a drug can only be sold when there is a shortage or if the branded drug is in some way inappropriate for the patient requiring a customized version, e.g. with adjusted dosage, method of dosing, or added/deleted ingredients. Look for Hims and other telemedicine prescribers to start pushing this POV. FierceHealthcare, MedCity News

Some FDA reviewers reinstated after DOGE cuts. The ~230 probationary and other employees who were let go with severance then partially reinstated are reported to be reviewers in the CDRH (Center for Devices and Radiological Health). The 183 reinstated reviewers are actually funded by the industry through the Medical Device User Fee Amendment (MDUFA) agreements to help speed the review and approval process. There is considerable confusion about this because phone calls went out over the weekend but as of today (Monday) there is no written confirmation from HR or the Office of Personnel Management (OPM). It remains murky as do layoffs in the rest of HHS. FierceHealthcare, Endpoints