Healthcare & Life Sciences Industry Overview

Our Latest Insights | 30K Feet: Key Takeaways from The Medical Spa Show 2020

The Medical Spa Show is the only trade show in the United States focused solely on medical spas and noninvasive medical aesthetics (including Botox, CoolSculpting, dermabrasion and others), and it showcases the latest up-and-coming trends, treatments and technology in the industry.

In this article series, Harris Williams senior professionals from our Healthcare & Life Sciences (HCLS) Group and Consumer Group explore the key takeaways from the Medical Spa Show 2020.

Read the article.

M&A Environment

There have been a little over 120 M&A transactions in the healthcare and life sciences (HCLS) industry since the beginning of 2020, worth roughly $5 billion, compared with approximately $233 billion for all of 2019.

Notable recent transactions include the acquisition of Dermira Inc. (NasdaqGS:DERM) by Eli Lilly and Company (NYSE:LLY), InTouch Technologies Inc. by Teladoc Health (NYSE:TDOC) and Decision Resources Inc. by Clarivate Analytics Plc. (NYSE:CCC).1

Public Company Performance

Stock prices increased for many Healthcare (HCLS) companies during the past three months. In fact, the Harris Williams HCLS Composite Index increased 6.9%, while the S&P increased 4.9%. Notable sector increases include contract pharma manufacturing (increased 37.7%), assisted living (increased 30.2%) and specialty pharmacy (increased 26.9%).

Industrywide stock prices have experienced slight decreases as a whole; however, the HCLS Composite Index showed a mild decrease over the past 12 months of 10.8%. At the category level, products and devices grew by 8.2% on average over the past 12 months, followed by provider-based services declining 8.0%, and payor, provider and pharmacy support stock prices declining 9.6%. Specific stock price growth leaders over the past year include medical devices and products (24.4%), specialty managed care (20.6%), and home care, hospice and home infusion (20.4%).1

Industry News

Insurers are voluntarily covering the diagnostic testing of the coronavirus, according to the board of directors for America's Health Insurance Plans (AHIP). Health insurers will cover needed testing when ordered by a physician. They are taking action to ease network referral and prior authorization requirements and/or waiving patient cost-sharing. AHIP said it is also working with public and private-sector partners so that out-of-pocket costs are not a barrier to people seeking testing and treatment for COVID-19.

The Centers for Medicare & Medicaid Services (CMS) new interoperability rule will require major changes for payers and hospitals to provide patients access to their health information. The Interoperability and Patient Access final rule will require, among other things, that Medicaid, the Children’s Health Insurance Program (CHIP), Medicare Advantage (MA) plans and qualified health plans make enrollee data immediately accessible by January 2021. The rule signals a new chapter, requiring insurance plans to share health data with their patients in a format suitable for their phones or other devices of their choice, holding payers to a higher standard while protecting patient privacy.

Ro, the startup that started out by shipping a single generic medicine, has a far bigger mission in mind. The company has been quietly opening up pharmacies across the country in an effort to ship the most common generic medications at a flat rate that most Americans can afford. It’s now testing a new medication-delivery service with a small number of its users that offers more than 500 generic medications for $5 per medication per month.

M&A Overview1

Announced Healthcare & Life Sciences M&A

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Healthcare & Life Sciences M&A Trends

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Announced Private Equity M&A Activity

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Debt Markets Overview

Key Credit Statistics2

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Select Healthcare & Life Sciences Debt Offerings3

(by deal amount)

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Public Markets Overview1

Key Trading Statistics 

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Public Company Sector Performance

(12-month % change in stock price)

Equity Markets Overview

Healthcare & Life Sciences Industry Stock Performance1

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Top Equity Offerings4

(by proceeds)

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M&A Transactions

Announced U.S. Healthcare & Life Sciences M&A1

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What We’ve Been Reading

Insurance | Insurers Will Cover Testing of Coronavirus, AHIP Says

"Insurers are voluntarily covering the diagnostic testing of the coronavirus, according to the board of directors for America's Health Insurance Plans (AHIP). Health insurers will cover needed testing when ordered by a physician. They are taking action to ease network referral and prior authorization requirements and/or waiving patient costsharing. AHIP said it is also working with public and private-sector partners so that out-of-pocket costs are not a barrier to people seeking testing and treatment for COVID-19. In a separate statement, Cigna said its customers will have access to coronavirus testing, as prescribed by health practitioners, and the company will waive all copays or costshares to help fight the rapid spread of the virus. Cigna will cover the medical test similar to a preventive benefit for fully insured plans, thereby waiving co-pays, coinsurance or deductibles for customers. CVS Health also said it is providing COVID-19 diagnostic testing with no out-of-pocket costs or cost sharing for Aetna members. Also, Aetna members will have access to telemedicine visits with no out-of-pocket costs or cost sharing. Current testing is available through the Centers for Disease Control and Prevention and is being offered at no cost. Testing is expected to expand shortly as more commercial testing becomes available at a designated lab approved by the Food and Drug Administration."

Read the article.

Payer | CMS' New Interoperability Rule Requires Major Changes for Payers, Hospitals - Here Are 6 Key Elements

The Centers for Medicare & Medicaid Services (CMS) new interoperability rule will require major changes for payers and hospitals to provide patients access to their health information. The Interoperability and Patient Access final rule will require, among other things, that Medicaid, the Children’s Health Insurance Program (CHIP), Medicare Advantage (MA) plans and qualified health plans make enrollee data immediately accessible by January 2021. CMS Administrator Seema Verma said the rule will help bring the health system’s data-sharing capacity out of the “Stone Age." It was one of two rules issued by the Department of Health and Human Services on Monday to implement interoperability and patient access provisions of the bipartisan 21st Century Cures Act. The rule signal a new chapter, requiring insurance plans to share health data with their patients in a format suitable for their phones or other devices of their choice, holding payers to a higher standard while protecting patient privacy. Here are the key requiements of the new rule: Patient Access, Provider Directory, Admission and Discharge Notifications, Payer-to-Payer Data Exchange, Public Reporting and Information Blocking, and Digital Contact Information.

Read the article.

Tech | Online Pharmacy Ro is Testing a Program That Sends You Generic Prescriptions for $5 per Month Without Insurance

"Ro, the startup that started out by shipping a single generic medicine, has a far bigger mission in mind. The company has been quietly opening up pharmacies across the country in an effort to ship the most common generic medications at a flat rate that most Americans can afford. It’s now testing a new medication-delivery service with a small number of its users that offers more than 500 generic medications for $5 per medication per month. The $5 price also includes shipping, and the company does not accept insurance. Ro plans to launch the program to everyone in the coming weeks, a person familiar with the company’s plans said. Until recently, pharmacists were banned from informing patients about a more affordable cash price that was available. President Donald Trump has moved to remove those 'gag orders,' but many pharmacists can still only talk to patients about their options if they’re asked. All of that confusion has paved the way for startups like Ro and large retailers to offer consumers greater price transparency around their medications. Walmart offers $4 'lowest of' pricing on its website, and private companies like GoodRx offer discount cards to consumers who don’t have insurance or have high-deductible plans. Ro is backed by more than $170 million in capital and offers treatments across a number of areas, and it has doctors that prescribe medications for these patients virtually. Its drug prices will vary, according to the company’s website, but the cost of the physician visit is $15. The company currently has three pharmacies it can ship from, which are listed publicly via state pharmacy boards. It is planning to expand to more than 10 by the end of the year."

Read the article.

Public Comparables

Payor, Provider, & Pharmacy Support Services1

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Products & Devices1

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Provider-Based Services1

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1. FactSet
2. S&P
3. PNC Debt Capital Markets
4. Company Filings
 
 

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