2023 In Review: More multibillion-dollar acquisitions, early AI use, a historic drug approval, and more
Editor’s note: This is the last issue of Darwin’s Our Take for 2023. Look for the next one on Jan. 8.
1. Top health system mergers, partnerships, and tech initiatives
The deal that got the most news coverage was the one that didn’t happen: the proposed combination of Sanford Health and Fairview Health Services. The combined health system would have been valued at about $14 billion. But multiple stakeholders raised concerns, a review of the deal by Minnesota’s attorney general ensued, and the health systems terminated their plans in July.
- AmerisourceBergen, now known as Cencora, and asset management firm TPG acquired Nashville, Tenn.-based OneOncology in June in a transaction valued at $2.1 billion, with TPG owning the majority interest.
- Aspirus Health, based in Wisconsin, and St. Luke’s, based in Minnesota, signed a definitive agreement in October to combine.
- Centura Health, a joint venture that originated in 1996 between Catholic Health Initiatives and Adventist Health Systems (now AdventHealth), is being dissolved. Eventually, AdventHealth will operate and manage the five hospitals it owns in Colorado, and CommonSpirit will operate and manage the joint venture’s remaining 15 hospitals and clinics. Separately, CommonSpirit acquired Steward Health’s Utah assets in May, and Centura Health will manage them.
- Essentia Health and Marshfield Clinic Health System signed an agreement in July to integrate, forming a 25-hospital system serving communities in Michigan, Minnesota, North Dakota, and Wisconsin.
- Froedtert Health and ThedaCare, both based in Wisconsin, signed a definitive agreement in September to merge.
- Henry Ford Health agreed in October to enter into a joint venture with Ascension Michigan; the Detroit-based health system will combine with Ascension’s southeast Michigan and Genesys health care facilities.
- Oregon Health & Science University signed a nonbinding letter of intent in August to merge with Portland-based Legacy Health, creating a 10-hospital health system with more than 100 locations serving the Pacific Northwest.
- Parkview Health System, based in Pueblo, Colo., merged with UCHealth, which has 12 hospitals and more than 150 clinics serving Colorado, southern Wyoming, and western Nebraska, on Dec. 1.
- Sparrow Health System, based in Lansing, Mich., became part of Ann Arbor, Mich.-based U-M Health in April. The combined system has more than 200 sites of care.
- Sutter Health agreed in October to integrate Sansum Clinic, an outpatient care provider based in Santa Barbara, into its network.
- Cleveland Clinic and IBM unveiled the IBM Quantum System One, the first private-sector, IBM-managed quantum computer in the U.S. and the first quantum computer dedicated solely to health care research, in March. Cleveland Clinic also opened its Mentor Hospital in Lake County, Ohio, in July. Through a collaboration with Verizon, the hospital is the first in the country to be built with 5G technology embedded from the start.
- CommonSpirit Health launched a population health services organization (PHSO) in September to support provider networks with both independent and employed physicians, with a goal of helping them excel in value-based care. The PHSO offers services such as advanced population health analytics, network management, care coordination, data management and analytics, technology infrastructure, and reporting.
- Endeavor Health (formerly NorthShore–Edward-Elmhurst Health) is incorporating Lumeris’ population health data platform into its value-based care strategy. Endeavor and Lumeris will also support providers in Endeavor’s clinically integrated network with various services and will form new ACO models through their payer-agnostic partnership.
- HCA Healthcare launched a pilot program in February in which physicians use Google Cloud’s AI technology and Augmedix’s ambient medical documentation app to create medical notes from their conversations during patient visits.
- Kaiser Permanente’s Permanente Medical Group launched a new program in May called the Augmented Intelligence in Medicine and Healthcare Initiative, or AIM-HI, which will grant several health systems up to $750,000 to research the use of AI and machine learning to enhance diagnostic decision-making.
- Mayo Clinic is collaborating with Google on the use of generative AI. The health system also revealed plans for a $5 billion redesign of its main campus in Rochester, Minn., in years to come. The plans include new buildings with a flexible grid design — a first for a health care facility, according to Mayo Clinic. The health system is also collaborating with GE HealthCare to advance medical imaging and theranostics, using AI-powered applications to accelerate development of advanced magnetic resonance technologies.
- Mercy, based in St. Louis, said it is exploring more than four dozen uses of artificial intelligence in partnership with Microsoft.
- Ochsner Health launched a pilot program using Microsoft’s Azure OpenAI Service to test a new Epic feature that drafts responses to basic, routine requests sent through the health system’s patient portal. UNC Health, UC San Diego Health, UW Health, and Stanford Health are also piloting the Epic-Microsoft patient messaging technology.
- Astellas Pharma acquired Iveric Bio for $5.9 billion in July, gaining a treatment approved in August for the advanced stage of age-related macular degeneration.
- Bristol Myers Squibb announced in October that it would acquire Mirati Therapeutics for up to $5.8 billion. The deal could be completed in the first half of 2024.
- Kenvue, Johnson & Johnson’s consumer group spinout, raised $3.8 billion in May in one of the largest health care IPOs in over a decade.
- Novartis acquired Chinook Therapeutics for $3.2 billion, giving Novartis two late-stage assets in development for Berger’s disease.
- Sanofi acquired Provention Bio in April for $2.9 billion, giving Sanofi ownership of a first-in-class drug approved last year to delay the onset of stage 3 type 1 diabetes.
- Eli Lilly made two acquisitions in August — Dice Therapeutics, a company that develops therapies for autoimmune diseases, for $2.4 billion, and Versanis Bio, a privately owned company that’s developing a first-in-class drug candidate for weight loss, for up to $1.9 billion.
Vertex Pharmaceuticals and CRISPR Therapeutics made history in November when regulators in the U.K. granted conditional marketing authorization to Casgevy (exa-cel), the first CRISPR-based gene-edited therapy ever approved by a regulatory agency. The FDA approved Casgevy a few weeks later. The treatment is approved for patients with sickle cell disease who are at least 12 years old and have recurrent pain crises. Vertex set a list price of $2.2 million for Casgevy in the U.S.
Failing to keep pace with CVS and Walgreens, and facing more than 1,600 opioid-related lawsuits, Rite Aid filed for Chapter 11 bankruptcy protection in October. Shortly before that, the company proposed closing nearly a quarter of its 2,100-plus locations.
Blue Shield of California unveiled a new pharmacy care model it will roll out to employees in 2024 and to members in 2025. The new model replaces most of CVS Health’s PBM functions with services provided by other companies, including Amazon Pharmacy, Mark Cuban Cost Plus Drugs, and Prime Therapeutics.
It’s unknown how many participated in the last strike because most pharmacy workers are not represented by unions. Grassroots organizers launched The Pharmacy Guild in November in an effort to unionize staff at retail pharmacies.
However, last month Novo Nordisk filed to have Wegovy’s label updated to include a cardiovascular indication based on positive results from the Phase III SELECT trial, in which semaglutide reduced certain cardiovascular events by 20% compared with placebo.