This morning, we hosted a 20-minute conference call to discuss the factors that led us to downgrade shares of Walgreens Boots and CVS Health as well as the analysis of the 340B Drug Discount Program profit contributions that catalyzed our more negative outlooks for WBA and CVS shares. 

On December 7th, we chatted with Dr. Robert Boorstein focusing on updated implications from COVID-19 testing for the clinical laboratory testing and the diagnostics industries. Topics of discussion included an update on COVID-19 detection and serology testing, as well as the laboratory operating environment. Companies in focus from our coverage include Bio-Rad (BIO), Danaher (DHR), Hologic (HOLX), LabCorp (LH), PerkinElmer (PKI), Quest Diagnostics (DGX), Quidel (QDEL), Thermo Fisher (TMO).

Dr. Boorstein is currently Medical Director for Lenco Diagnostic Laboratory, a rapidly growing commercial laboratory in Brooklyn, NY. He is also Medical Director at Vela Diagnostics, a manufacturer of novel NGS tests for infectious diseases and oncology. He was previously the founding Medical Director at Clinical Genomics, a privately funded laboratory developing novel colon cancer liquid biopsy diagnostics. Earlier, he was Medical Director at Enzo Clinical Laboratories, a full-service clinical reference laboratory serving the New York City medical community. Prior to working in the commercial sector, Dr. Boorstein was Associate Professor in the Department of Pathology at New York University School of Medicine, Director of Pathology at Bellevue Hospital, and Medical Director for Pathology and Laboratory Medicine of the South Manhattan Healthcare Network and Northern Manhattan & Generations plus Health Network of the New York Center Health and Hospitals. 

On November 30th, we hosted a discussion with Dr. Bruce Quinn on reimbursement prospects for early cancer detection testing.  Bruce is the go-to expert on all things reimbursement for the Diagnostics industry. He specializes in Medicare policy, and helps both large and small companies understand and overcome hurdles to commercialization. Bruce is the Principal at Bruce Quinn Associates, and previously served as a Policy & Strategy Expert at Foley Hoag. Prior to that, he served as the Medical Director for California’s Medicare Program

Our discussion focused on diagnostics for early cancer detection. There are a number of liquid biopsy entrants developing new tools for early detection.  Our discussion focused on potential reimbursement pathways for Medicare, and steps needed to potentially earn coverage. Companies in focus from our coverage include Illumina (ILMN), Myriad Genetics (MYGN), and non-covered Exact Sciences (EXAS), Guardant Health (GH), and private companies Freenome and Thrive. 

On November 24th, Nephron hosted Dr. Mark Pandori, the director of the Nevada’s State Public Health Laboratory.

Topics of discussion included public health testing strategies for COVID-19, trends in infection rates, preferred testing platforms, the value of antigen testing for screening, the relative value of emerging platforms (such as NGS), and the path forward for COVID-19 testing.

In light of today’s announcement from Amazon, we hosted a very brief call for investors to review the implications for the broad supply chain including Digital Pharmacies, Retail Pharmacies, PBMs and Health plans. 

On Nov 13th, we were joined by Mike Waterbury, Chairman of rebate aggregator RemedyOne and the recently launched Famulus Health, ‘payor integrated’ generic drug discount card, for a discussion of the changing brand rebate marketplace (think PBM GPOs such as CI/Ascent and CVS/Zinc) and generic discount card marketplace (think GoodRx)

On November 11th, Nephron hosted two of the leaders of the largest Spine center in Nebraska, with 25%+ market share on all spine surgeries in the state. We were excited to meet with Dr. McClellan and Mr. Leatherman because of NS+PC’s positioning in the evolving world of outpatient surgeries as well as their affiliations with UnitedHealth Group’s OptumCare Segment (part of Surgical Care Affiliates).

Topics of discussion included:

• The impact of COVID on surgery trends
• How outpatient surgery trends are developing and share shifts from inpatient to ASCs
• What hospitals are doing to combat the trend of movement of procedures to outpatient settings
• How physicians are thinking about the future, including changes in ownership structures
• How to best partner with hospital systems to improve efficiencies and outcomes
• How bundled payment initiatives, and other value based reimbursement systems are evolving
• What Optum brings to the table in these partnerships and how they are trying to grow
• The latest trends in spine and pain care

This morning, we were joined by leadership from CPA, one of the largest independent pharmacy co-ops in the country and a key AmerisourceBergen customer.  Key topics included include independent pharmacy economics, generic sourcing, pharmacy reimbursement, drug discount cards and 340B. 
Leadership included Jay Blackburn, CEO, Jim Ross, COO and Tom Marten, CFO.

There are few topics getting more attention that value based care, and yesterday we hosted a full panel of experts for the topic. We were joined by 2nd Mountain Leaders:

• Terry Bayer: Former COO Molina Healthcare, FHP, Maxicare, Matria
• Dr. Greg Buchert: Former CEO Blue Shield of Califoria, CMO of Health Net, HMA and COO of CalOptima
• Dr. Mario Molina: Former CEO of Molina Healthcare, Former CEO of Golden Shore Medical Group
• Juan Jose Orellana: Blue Harbor Consulting Group, Former CMO Golden Short Medical Group, Molina Healthcare

On October 2nd, Nephron had a virtual visit with the Broad Institute, hosted by two leading genomics researchers - Dr. Stacey Gabriel and Dr. Niall Lennon.