There’s even more pressure on Cigna Corp. to accept a buyout offer from Anthem Inc. now that their rivals Aetna Inc. and Humana Inc. have agreed to merge. That’s how Wall Street analysts reacted to the $35 billion deal struck between Hartford-based Aetna and Louisville-based Humana. According to Bloomberg News, Aetna and Humana came to terms on Friday in the first of an expected wave of consolidation among the largest companies in the industry. Last month, Cigna rejected offers from Anthem for as much as $184 a share in cash and stock, or $47 billion in all, citing concerns over the CEO role and the number of board seats. Both Anthem and Cigna had held discussions to acquire Humana, people familiar with the matter said last month, asking not to be identified because the information was private. Also, The Wall Street Journal reported on Thursday that Anthem and Cigna resumed their talks on June 26. Now that Humana is no longer an option, an Anthem-Cigna transaction can probably get done at about $190 to $195 a share, said Leerink Partners analyst Ana Gupte. UnitedHealth Group Inc., the largest U.S. health insurer, could also enter the picture. The Minnesota-based company has weighed buying Aetna or Cigna, The Wall Street Journal reported last month, citing people familiar with the matter.
Indiana's life sciences companies are spending four times more on medical research than the state's hospitals, doctors and universities are receiving from such companies for research projects. Indiana ranks No. 7 in the nation, with nearly $161 million, for its take of the $3.23 billion paid last year by companies that make drugs and devices to doctors and teaching hospitals, according to the full fiscal year 2014 Open Payments data released this week by the Centers for Medicare & Medicaid Services. Much of this spending is for clinical trials, which means the numbers are dominated by drug companies. But research funding also includes consulting fees for clinicians’ expertise during earlier stages of developing new products and license and royalty payments for researchers’ discoveries that were later turned into new therapies. Indiana’s hospitals and doctors that do research for drug and device firms received less than $40 million in research funding during 2014, according to the Open Payments data. That ranked No. 25 nationally among all states. This medical research trade deficit is the big reason state, city and corporate leaders started the BioCrossroads initiative in 2002. And it’s a big reason those same groups are now trying to get the $360 million Indiana Biosciences Research Institute going.
Patients from around the country have filed 100 lawsuits against Bloomington-based Cook Medical Inc., alleging that some of its blood-clot filters have broken apart, moved or poked through the blood vessel where they are implanted, the inferior vena cava, which brings blood from the lower body back to the heart. The deluge of litigation, which began in 2012, now has been consolidated in federal court in Indianapolis. Cook officials say they are concerned that this kind of litigation is hampering innovation. A 2012 analysis by McKinsey & Co. estimated that “non-routine” quality issues—recalls, warning letters, warranties and lawsuits—cost medical-device companies 1 percent to 2 percent of their annual revenue. And the frequency of those issues is growing. In an analysis last year, the FDA noted that medical-device recalls nearly doubled from 2003 to 2012. The impact can fall particularly hard on Cook, because it makes a plethora of products that serve small numbers of patients. While most medical-device companies have about 400 products in their catalogs, Cook has 15,000.
Human resources and corporate benefits firm Tilson plans to expand its headquarters in Greenwood and create as many as 245 jobs by 2020, the company announced July 1. The firm intends to add 10,000 square feet to its 20,000-square-foot headquarters at 1530 American Way in Greenwood, northwest of the intersection of Interstate 65 and East Main Street. In addition, Tilson will be scoping sites for another 40,000-square-foot building to accommodate employee growth, founder and CEO Brent Tilson told IBJ. Founded in 1995 in Greenwood, the firm currently employs about 70 people. It expects to begin hiring personnel for positions across the company this summer, including for payroll, IT, support and management jobs. The firm recently has seen significant growth in both its number of clients and the size of its clients, Tilson said. Increasing complexity of employee-related requirements, such as those for the Affordable Care Act, are driving firms to independent providers of human resource services.
Community Health Network has agreed to pay $20.3 million to settle claims that it overbilled for outpatient surgeries, according to the U.S. Department of Justice. The settlement, announced Tuesday by U.S. Attorney Josh Minkler, alleges that Indianapolis-based Community billed for surgeries performed at surgery centers not owned by Community as if they had been performed at its facilities. Since the Medicare and Medicaid programs pay higher rates for procedures performed in hospital-owned facilities than in independent facilities, this practice brought extra money to Community and the owners of the surgery centers with which it had contracts. Community operates eight hospitals in Indianapolis, Anderson and Kokomo, and more than 200 care sites in and around those cities. In a statement, Community officials said that, during the time covered by the federal investigation, they informed regulators how they were billing for outpatient surgeries and sought the regulators' guidance. The hospital system said it was always compliant with government rules with its billing practices.