March 6, 2023
Reporter, Health Care Inc. Writer
Hello! If you’re going to be in St. Louis this week for the annual Association of Health Care Journalists conference (program here), a bunch of my STAT colleagues and I will be there, too. I’ll be moderating a panel on Saturday about private equity in health care. Come say hi. And, as always, never hesitate to drop a line:


The gigantic business of the new obesity drugs

Maria Fabrizio for STAT

A new generation of highly effective obesity medications, and the overt and subtle messaging from the pharmaceutical companies making them, is changing the narrative around obesity, my colleagues Elaine Chen and Matt Herper report in a new, deeply reported story.

This represents one of the biggest financial opportunities ever for drugmakers. These medicines — called incretin mimetics or GLP-1 drugs — are already used to treat diabetes, generating $23 billion in annual sales. But using the same drugs to also treat obesity could result in a $100 billion market in less than a decade. 

That amount of money swirling around naturally is creating some questionable behaviors. Elaine and Matt learned Novo Nordisk, which makes one of these drugs called Wegovy, funded the development of coursework on obesity for medical schools, which shocked several experts.

This is the first article in a series about these medications. Read their initial opus, which covers the history of weight loss drugs and how the industry and doctors are framing the issue. And stay tuned for more.


Well, that was a quick change of heart

Imagine your health insurer previously covered a drug at 100%, a drug your doctors say helped to send your deadly illness into remission for almost a decade. Now, imagine the disease comes back, and the same insurer denies coverage for the same drug. Three times.

This is the epitome of when prior authorization comes off as cold and arbitrary. Health Care Inc. co-pilot Tara Bannow interviewed a 46-year-old mom of three who was struggling to get her health insurer, Blue Cross Blue Shield of Massachusetts, to cover an infusion drug called Rituxan for her rare kidney disease. Two days after Tara asked BCBS of MA what was up, the company said it decided to cover the biosimilar version of the drug after all.

It’s a positive outcome for this patient, but there are undoubtedly countless patients out there wondering why they can’t get their previously covered drugs. In this case, BCBS of MA said it didn’t require prior authorization for Rituxan back in 2014, but it has since beefed up its guardrails around the pricey drug. Read more.


When a small hospital merger raises big antitrust questions

Cross-market hospital mergers are all the rage for potentially avoiding antitrust heat. A proposed combination of Presbyterian Healthcare Services and UnityPoint Health is the latest one, Tara reported last week.

But don’t sleep on the ho-hum, smaller-potato announcements of local hospitals that switch owners — especially if the new owners already gobble up a lot of the market. Case in point: Novant Health is buying two hospitals and related clinics north of Charlotte for $320 million, which will give Novant significantly more market power. Some public figures are already voicing opposition.

“If the same thing happens with [this deal] as it did with the last Novant acquisition, the quality of care is going to go down, and the cost of care is going to go up,” Dale Folwell, North Carolina’s treasurer, told me. “This is like an onion: The more you peel, the more you cry. These hospitals … at every turn, it’s profits over patients.”

Read more about this deal in North Carolina, how prices and employee wages could be affected, and what the area’s only other acute-care hospital thinks about it.

surprise billing

The “participating provider” loophole

From the start, it was clear new federal protections would not catch every surprise bill. Ground ambulances are the main exception. Out-of-network labs connected to doctors’ offices also escape the law.

But a story from Harris Meyer and Kaiser Health News gets at a new loophole that revolves around whether an out-of-network provider can also be a “participating provider.” 

In Medicare, a “participating provider” simply means the doctor or hospital accepts the rate from the feds as full payment. In the commercial market, a “participating provider” usually means the same thing — and that the doctor or hospital is in-network. But in this KHN story, the hospital said even though it was out-of-network in this particular patient’s plan, it still had a “broader contract” with the insurance company and therefore was a “participating provider” that is not subject to the federal surprise billing law.

Simple and easy to understand, right? Do you have an example of these types of contracts? You know what to do: and

More around STAT
Check out more exclusive coverage with a STAT+ subscription
Read premium in-depth biotech, pharma, policy, and life science coverage and analysis with all of our STAT+ articles.

Industry odds and ends

  • Eli Lilly cut the list prices of its old, commonly used insulins. Eli Lilly’s stock rose on the news, which says a lot. STAT’s John Wilkerson offered another interesting rationale for why Eli Lilly might’ve done this: to avoid paying big Medicaid rebates.
  • Some hospitals are not meeting financial targets in their borrowing agreements, Tara reported last week.
  • CMS recently terminated the Medicare Advantage contract for Imperial Health Plan of California due to the plan’s poor ratings for handling members’ prescription drugs.
  • The Department of Justice is alleging Terren Peizer, the now-former CEO of Ontrak, a tech-based behavioral health company, violated insider trading laws with his use of pre-planned stock trades. Peizer resigned last Thursday, the day after the DOJ announced its indictment.
  • IQVIA CEO Ari Bousibib made $28.3 million in 2022, new financial disclosures show. That’s down from $59.3 million in 2021.

The Meme Ward

Health Care Inc. Meme - Issue 33


Thanks for reading! More next week.

Enjoying Health Care Inc.? Tell us about your experience
Continue reading the latest health & science news with the STAT app
Download on the App Store or get it on Google Play
STAT, 1 Exchange Place, Boston, MA
©2023, All Rights Reserved.