Think you had a long week? At least your stock didn’t drop 16% after reporting earnings. That’s what happened to National Beverage Corp, the maker of LaCroix, after their CEO blamed a nearly 40% drop in profits on “injustice.”
The millennial favorite drink is widely credited with the flavored sparkling water trend. But, brands are complicated, or so said their CEO in their earnings release:
“Negligence nor mismanagement nor woeful acts of God were not the reasons – much of this was the result of injustice! Managing a brand is not so different from caring for someone who becomes handicapped. Brands do not see or hear, so they are at the mercy of their owners or care providers who must preserve the dignity and special character that the brand exemplifies.”
He didn’t stop there.
“One can be induced to purchase by cheapening price or giving away a product, but falling in love with a feeling of joy is the result of contentment. Just ask any LaCroix consumer…Would you trade away that LaLa feeling? 'No way, they shout – We just love our LaCroix!”
There’s PR spin, and then there’s…whatever this is. But we must admit, we do indeed love “that LaLa feeling.”
THE WEEK THAT WAS
News hit that a second HIV/AIDS patient has been effectively cured, nearly 12 years after a first patient was reported. But, there’s a lot of fine print. Both patients received bone marrow transplants, but “the transplants were intended to treat cancer…not H.I.V.” While many experts consider this a notable development, “bone-marrow transplantation is unlikely to be a realistic treatment option [for HIV] in the near future.”
This Women’s History Month, we are seeing a range of expressions related to women’s empowerment, from Nike’s Dream Crazier commercial to a JAMA study on gender discrepancies in scientific research funding. Some woke researchers at Northwestern University found that male scientists consistently received larger NIH grants than female scientists, with an average gap of about $41k. At private institutions, it’s even worse: women received $68.8k less than men at Yale and $76.5k at Brown. Gulp. The NIH was unable to dispute the study’s findings, saying instead that they are working to “understand the barriers and factors faced by women scientists and to implement interventions to overcome them.”
Tired of the untweetable mouthful that is the Amazon, JP Morgan, Berkshire Hathaway joint-venture in healthcare? Well, they’ve got a solution for that (and for drug prices, and insurance benefits, and primary care). The project now has a name - Haven - and a website. Wednesday was also National Oreo day. We dutifully celebrated the observance.
“Who is the $100,000 dark-money mystery group? ” That was the query STAT posed in an investigative story about “Citizens for Truth in Drug Pricing.” Reportedly, the group, which has ties to conservative interests, poured over $100k into “pharma-bashing” Facebook ads. The group’s spokesperson – David Pasch – is “a well-known Republican communications professional” who worked at HHS during the Trump administration and its “biggest promoter is the conservative radio talk show host Hugh Hewitt.” We’ll be watching.
Turns out Martin Shkreli is doing a lot more from prison than fighting with reporters on LinkedIn. The WSJ reported that Shkreli remains the “shadow power” behind Phoenixus A.G., the company formerly known as Turing. Shkreli has a contraband cell phone and a long-term plan for building out a “pharma empire” by "acquiring more rare drugs in various stages of development and plowing money into an ambitious research-and-development agenda." He also has made some new friends named ‘Krispy’ and ‘D-Block.’
Pulse on Pricing: Speed-Read Edition
- The Kaiser Family Foundation February poll is out, and it’s not great for pharma. Though 71% of people trust pharma to develop new effective drugs, only 47% trust them to inform the public about a safety concern quickly. And, just 25% trust them price their medicines fairly. Lots of great charts here.
- The Health Care Cost Institute released their 2017 report on healthcare costs and utilization, which found that “per-person spending reached $5,641, a new all-time high for this population since HCCI began releasing annual health care cost and utilization reports.” Stats on stats on stats here.
- A Health Affairs survey found that despite high costs, most patients in high-deductible plans don’t shop around for better prices. Just 25% of patients had talked to their doc about how much something would cost, 14% compared prices or quality metrics for multiple facilities and only 7% tried to negotiate a price. Why is this?
Do you hear what I hear?
Think last week’s Congressional hearing on drug prices was the last of it? Think again. This week, there was:
- A Senate Aging Committee hearing on the “The Complex Web of Prescription Drug Prices, Part I: Patients Struggling with Rising Costs.”
- A House Ways & Means Health Committee hearing on “Promoting Competition to Lower Medicare Drug Prices.”
- A House Energy & Commerce Committee hearing on “Strengthening Our Health Care System: Legislation to Lower Consumer Costs and Expand Access.”
Bye, bye Scottie, we're gonna miss you so
We certainly didn’t forget the biggest news of the week:
Tim Cook changing his name to Tim Apple Scott Gottlieb resigning as commissioner of the FDA.
We’ve got thoughts about his legacy and what this means for the industry, but first, some things we learned about Gottlieb this week:
- He’s been commuting from Connecticut this entire time.
- Alex Azar is a big, big fan of his.
- He raises chickens in his back yard, and in 2017 he was on the cover of Backyard Poultry.
- He loves a good novelty sock and Adam Feuerstein thinks he’s the “biggest hipster ever to be an FDA Commissioner.”
Now, on to what will likely be Gottlieb’s legacy:
- Mr. Popular. As FDA Commissioners go, Gottlieb was notably well-liked by the market, the biopharma industry and the Trump administration. Just take this headline from last fall: One year in as FDA chief — does anyone not like Scott Gottlieb?
- No-vape zone. Gottlieb was laser-focused on addressing the issue of youth-vaping, as he attempted to curb and restrict the sale and use of flavored e-cigarrettes and prevent a surge in underage nicotine use – though the long term impact is unclear.
- That was fast. During Gottlieb’s tenure, there were a record number of accelerated drug approvals that were “based on early signs that the drug was effective, rather than the full approval process.”
- A lot to say. A Jefferies analysis found that the Gottlieb FDA published 200+ guidance documents last year, a significantly higher annual rate than past commissioners.
- Game on. Gottlieb found innovative ways to address drug pricing through policy, by encouraging more generic and biosimilar competition. as well as clarifying policy that previously inhibited developer/payer communications for therapies in development.
Gottlieb brought to the job a unique set of skills: a deep understanding of policy, an expertise in drug development, and a knack for process and PR. This allowed him to raise awareness about new topics and interpret and evolve policy beyond what we typically consider the standard “remit” of the FDA.
- Biotechs are biting their nails. The National Biotech Index (NBI) fell 2% within seconds of the announcement, 4% on Wednesday, and was still down at week-end.
- Tobacco is feeling good. Tobacco stocks were up after the news of Gottlieb's resignation broke. On Thursday, e-cig giant Juul announced an initiative to work with employers and insurers to pitch Juul as a tool to help people stop smoking.
- New faces. People are already speculating about Gottlieb’s potential replacement, with a short-list including Dr. Amy Abernethy, ex-Flatiron Health and current Deputy Commissioner, Dr. Ned Sharpless, Director of the National Cancer Institute Director, and Dr. Brett Giroir, HHS Assistant Secretary.
There’s no doubt that the biotech market is feeling anxious, as they await the announcement of the next Commissioner. But our financial comms expert, Eric Laub, reminded us to look beyond the initial numbers. Just 10 companies account for over 50% of the National Biotech Index weighting; so any movement from those companies (such as the departure of Gilead’s oncology research director) can have a significant impact on the index.
Stay tuned for an analysis from Eric next week, examining what percentage of the Top 10 pipeline could be affected by a less industry-friendly Commissioner.
Who wrote this? The managing editors of TWTW are Dana Davis, who LOVED that the JAMA study was done at her alma mater, Northwestern, and Randi Kahn, who has fled to Florida.
Syneos Health Communications' Reputation & Risk Management Practice is a team of healthcare communications consultants, policy-shapers and crisis response specialists. We provide unique solutions to the evolving communications challenges in today’s healthcare industry, using evidence-based approaches to help our clients successfully navigate the most sensitive of situations.
Got thoughts? Contact Dana
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Image credits: Female by Maurizio Fusillo from the Noun Project,Handshake by bmijnlieff from the Noun Project, question-mark by useiconic.com from the Noun Project, Sock by Ema Dimitrova from the Noun Project, Sock by Ema Dimitrova from the Noun Project