Class acUnitedHealth Group headquarters in Minnetonka, Minn. (Jenn Ackerman for STAT)A federal judge will soon decide whether a class action lawsuit against UnitedHealth Group and a subsidiary over algorithm-based care denials can move forward. If it does, the suit (filed in 2023 following STAT’s reports) could open the door for attorneys to sift through the company’s internal communications, our Bob Herman reports. These kinds of big lawsuits can take years to make their way through the courts but, in this case, there’s a sense of urgency – many of the alleged victims are elderly and ill. Zach Baron, director of the Center for Health Policy and the Law at Georgetown’s O’Neill Institute, told Bob it’s difficult to predict the outcome because of the scant legal precedent governing a technology like AI and a longstanding public benefit like Medicare. “Regardless of what the judge decides here, it’s not going to be the final word on this, just given where we are with the state of the law and new technologies,” Baron said. UnitedHealth has denied the allegations that its technology was the only basis for whether a patient received care. Get into the details, in Bob’s story.

White House reportedly plans for sweeping cuts across health agencies

The White House is preparing an executive order to cut thousands of jobs at the Department of Health and Human Services, including the FDA, CDC, and NIH, the Wall Street Journal reports — though final decisions have not been made. The plan would require agencies to lay off a certain percentage of workers, potentially impacting drug approvals, disease tracking, and medical research. Agency officials have been told to compile lists of essential and non-essential workers, sources told the Journal. That said, the White House has denied that there’s an executive order of this nature underway.

Employees across the federal government have been offered buyouts, with more than 40,000 workers expressing intent to resign — though a judge has paused the deadline for them to make a decision while considering litigation that challenges the program. 

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DRUG DEVELOPMENT

Lilly expands GLP-1 research to hypertension, neuro conditions

From STAT’s Elaine Chen: Eli Lilly plans to test weight loss drugs in even more disease areas outside of obesity.

On the company’s earnings call yesterday, Chief Scientific Officer Dan Skrovronsky said it plans to start a Phase 3 trial of its GLP-1 pill, orforglipron, in hypertension. Lilly also plans to study incretin drugs (treatments that target hormones like GLP-1 and GIP) in areas that could include brain health, pain, and neuropsychiatry, he said.

This adds to the broad swath of conditions that Lilly has already planned to test its obesity drugs in. It’s already reported data on the use of its obesity drug Zepbound to treat sleep apnea and heart failure. It’s also announced plans to study obesity drugs in inflammatory conditions and substance use disorders.

There’s been growing data showing that GLP-1 drugs can enter and exert effects on the brain. Some research suggests these treatments may help patients with neurodegenerative diseases such as Alzheimer’s and mental health disorders like severe depression and bipolar, though larger studies are needed.

Lilly’s competitor Novo Nordisk is running two large trials of the obesity drug Wegovy in Alzheimer’s that are expected to report data this year. 

from AXIOS:

The golden age of health insurance may be over

Illustration: Allie Carl/Axios

Health insurance — and its associated business lines — has been a highly lucrative business for the past decade or so, until recently. But that golden pre-pandemic era may be gone for good.Why it matters: If insurers make less money, they could try to pass more costs on to enrollees or cut benefits, which could cause patients pain. Alternatively, they could be forced to take harsher steps to control costs. Regardless, shareholders may simply not have it as good going forward.Driving the news: Both Moody’s and S&P Global Ratings recently changed their outlook on the health insurance sector to negative, whereas before it was stable.Moody’s cited quickly rising medical costs, the inability to fully offset those costs through premium increases and pharmacy benefit manager scrutiny as drivers of the change.S&P pointed to “recent and projected strain in operating performance,” especially in Medicare Advantage and Medicaid markets, and higher legislative and regulatory risks.By the numbers: In mid-2020, the industry’s profit margin was 5.3%, according to a report by the National Association of Insurance Commissioners. In mid-2024, it was 2.7%.The big picture: Insurers keep reporting higher-than-expected medical loss ratios in their earnings calls, meaning that enrollees are still spending more than expected on care years after the acute phase of the pandemic ended.The all-out war with providers doesn’t seem close to ending, with both sides now having become highly concentrated partially to gain leverage in contract negotiations. Plus, some employers are considering bypassing insurers altogether and contracting directly with providers.America’s population is aging and living longer, which will put ever-more upward pressure on health care costs. So will technological and scientific advances, including more widespread use of expensive drugs like GLP-1s.And perhaps most importantly, health insurance has become highly dependent on the federal government for its revenue, and there’s good reason to think at least some of those revenue streams are threatened under the Trump administration.Yes, but: Insurers’ acute financial pain is likely time-limited, and they’ll likely be able to successfully renegotiate contracts with providers or receive updated government reimbursement rates that offset their rise in costs. The “long-term sector fundamentals remain solid,” per the S&P report.The Trump administration could end up making favorable Medicare Advantage policy (keep reading until the end for some tea leaves on that!) while failing to carry out some of its threats to the Medicaid and Affordable Care Act markets.”I think what’s going to happen over time is the industry is going to adjust, the health insurance industry is going to align the benefits with what they need to achieve some level of profitability. That could take a couple of years,” said Dean Ungar, an author of the Moody’s report on the industry.The question is how profitable.Keep reading …