WannaCry Ransomware Alert

This is not a drill.

Companies and law enforcement agencies around the world have been left scrambling after the world’s most prolific ransomware attack hit over 500,000 computers in 150 countries over a span of only 4 days. The ransomware – called WannaCry, WCry, WannaCrypt, or WannaDecryptor – infects vulnerable computers and encrypts all of the data. The owner or user of the computer is then faced with an ominous screen, displaying a countdown timer and demand that a ransom of $300 be paid in bitcoin before the owner can regain access to the encrypted data. The price demanded increases over time until the end of the countdown, when the files are permanently destroyed. To date, the total amount of ransom paid by companies is reported to be less than $60,000, indicating that companies are opting to let their files be destroyed and to rely instead on backups rather than pay the attackers. Nevertheless, the total disruption costs to businesses is expected to range from the hundreds of millions to the billions of dollars. Continue Reading

Notes on Day 4 of the JPMorgan Healthcare Conference

Some interesting presentations on the last day of the JPMorgan Healthcare Conference that concentrated on common themes – the increasing importance of ancillary business line to bolster core business revenue and of filling in holes to achieve scale and full-service offerings.

Genesis Healthcare – The largest U.S. skilled nursing facility (SNF) provider, which also is the largest provider of contracted rehabilitation services, had an interesting story to tell. It reminded me of the endless road trip, where you are trying to appropriately fill the time on the way to your destination, while the kids in the back seat keep asking “Are we there yet?”  For Genesis and, perhaps for the SNF sector, the rainbow at the end of the road is the U.S. demographic pot of golden age seniors.   With Genesis average SNF bed occupancy at approximately 88% over the last 3 years (higher according to Genesis than two large competitors Ensign and Kindred), we continue to see less utilization of SNFs then existing capacity, and beds continue to be taken out of operation. BUT, wait until 2025, when the Baby Boom has fully actualized and when according to Genesis predictions, demand for U.S. SNF beds will outstrip existing capacity.

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The Old and the New – Day 3 Notes from the JPMorgan Healthcare Conference

Day 3 of the JPMorgan healthcare conference was one of striking contrasts between the old and the new. (And, by the way, the rain finally stopped for a day, but it will be back tomorrow to finish off the last day of the conference).

The Old:  Sitting in the Community Health Systems (CHS) presentation and listening to Wade Smith talk about the slimming down of CHS through the 20+ sales completed or in process, the audience could have heard this speech (with a few exceptions about the pending ACA changes) and not known if it was 2006 or 2016.  Very traditional hospital system presentation – admissions and revenue growth (or, as appropriate, losses), hospital market share, number of surgeries, physician recruiting, management of debt and expenses, etc.  All appropriate, but a marked contrast to many of the other hospital presentations this week with their emphasis on moving to risk, population health management, apps and patient engagement and brand.

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Food for Thought (and Health): Day 2 Notes from the JP Morgan Healthcare Conference

Addressing the Social Determinants of Health:  Is the healthcare industry pushing a rock up a hill?  We collectively are trying to provide healthcare with improved quality and reduced cost, but the structure of the nation’s healthcare system remains heavily siloed with the social determinants of health often falling wholly or partly outside the mandate and reach of the healthcare delivery system. Bernard Tyson of Kaiser on Monday noted studies that health is determined approximately 30% by family history and genetics, with the majority of the healthcare impact coming approximately 40% from personal behavior, 20% from environmental factors and 10% from healthcare services.  So, the playing field, if the above numbers are correct, is tilted much more toward nurture, rather than nature.  While we are aware of some hospitals starting to provide housing or other limited services to address the needs of their community and therefore also to address healthcare cost containment, those examples are the exception to date, rather than the rule.

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Looking Forward/Looking Backward – Day 1 Notes from the JPMorgan Healthcare Conference

A large amount of wind, much discussion about the U.S healthcare, and the public getting soaked again – if you were thinking about Washington, DC and the new Congress, you’re 3,000 miles away from the action. This is the week of the annual JP Morgan Healthcare conference in San Francisco, with many thousands of healthcare operators and investors flooding Union Square again only to be greeted by one of the worst storms and floods in the recent history of the Bay Area.  Can’t help thinking about the coincidence of nature providing us with a metaphor for the possible upcoming repeal of the Affordable Care Act.

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En Banc: Federal Circuit Provides Guidance on Application of On-Sale Bar to Contract Manufacturers

Pharmaceutical and biotech companies breathed a sigh of relief Monday when the Federal Circuit unanimously ruled in a precedential opinion that the mere sale of manufacturing services to create embodiments of a patented product is not a “commercial sale” of the invention that triggers the on-sale bar of 35 U.S.C. § 102(b) (pre-AIA).[1]  The en banc opinion in The Medicines Company v. Hospira Inc., Case No. 14-1469 (Fed. Cir. July 11, 2016) considerably mitigates patent law’s disparate treatment of inventors who rely upon contract manufacturing organizations (CMOs) and an those who manufacture in-house.

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New EU Rules for Medical Devices

After four years of negotiations, European lawmakers agreed on June 15 on a new EU Medical Devices Regulation (MDR).

The MDR is the equivalent to the FDA’s CDRH regulations in the United States and essentially specifies the applicable rules when importing medical devices into Europe, which is the world’s second-largest device market. Rules relate, for example, to product classification; quality system standards; pre-market authorization; and reporting of adverse events.

The final version of the MDR – a hefty 352 pages – was published on June 27 and is now reviewed by the EU’s legal editor for drafting or law-technical errors. It then needs to be translated into all EU member languages, followed by formal publication. After publication, expected in late 2016 or early 2017, there will be a three-year transition period as the medical device industry will need time to comply with the new requirements.

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PTO Cancer Immunotherapy Fast Track

In response to President Obama’s National Cancer Moonshot initiative to eliminate cancer, the USPTO has launched the “Cancer Immunotherapy Pilot Program.” The Pilot Program provides an accelerated review for applications related to cancer immunotherapy and is set to launch in July 2016. According to the USPTO, this initiative:

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Extending the Patentable Life of 3D Printers: A Lesson From the Pharmaceutical Industry

Modern innovation typically occurs one step-improvement at a time. Some clients initially question whether their new application of an existing technology is patentable. Usually, the answer is ‘yes.’ Under U.S. law (and most other jurisdictions), an innovation to an existing technology is patentable so long as at least one claim limitation is novel and non-obvious. See 35 U.S.C. §§ 102 and 103. Thus, innovative step-improvements to, and new applications of, existing technology may be patentable. Moreover, these step-improvements may prove lucrative, particularly when the underlying technology has entered the public domain, e.g., due to the expiration of the original patents. This concept is illustrated time and time again in the pharmaceutical industry where companies therein typically pursue competitive advantages by attempting to extend the patentable life of key technologies. One recent story illustrating this point was amplified in recent news when the FDA cleared a new pill produced by Aprecia Pharmaceuticals—the first pill of its kind produced using patented 3D printing technology. Continue Reading

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