In this week’s edition of InnovationRx, we look at new legislation that could undo recently-passed Medicaid cuts, how Daniel Nadler became a billionaire building a ChatGPT for doctors, big news from two Chinese biotech companies, what doctors think about AI and more. To get it in your inbox, subscribe here.
Senator Josh Hawley
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Yesterday, Senator Josh Hawley, R-Mo., who voted to slash Medicaid with Trump’s “Big, Beautiful Bill,” introduced a new bill in the Senate, the Protect Medicaid and Rural Hospitals Act, that aims to undo many of those cuts. It also calls for increasing financial support for rural hospitals and healthcare providers to $100 billion from $50 billion and to extend the term of that support to ten years from five.
The Republican cuts to Medicaid and the Affordable Care Act would leave nearly 12 million Americans without health insurance by 2034, according to the nonpartisan Congressional Budget Office. The recently passed bill cuts Medicaid spending by more than $1 trillion over the same period–an unprecedented amount–threatening the financial stability of hospitals that have a substantial number of Medicaid patients.
Hawley’s bill calls for eliminating a moratorium on taxes on providers, which states often use to finance their share of Medicaid programs. It also would repeal provisions of the Trump legislation that would potentially enable states to reduce Medicaid reimbursements to hospitals.
“I want to see Medicaid reductions stopped and rural hospitals fully funded permanently,” Hawley said in a statement. Trump signed the “Big, Beautiful Bill” into law on July 4 after Republican leadership wrangled support for it, including from Hawley.
OpenEvidence’s Daniel Nadler Became A Billionaire Building A ChatGPT For Doctors
Mauricio Candela for Forbes
For doctors trying to stay abreast of the latest medical breakthroughs, reviewing the latest research is like being shot in the face with a water cannon. A new paper is published every 30 seconds. Trying to comb through it all to come up with a diagnosis or treatment plan that reflects the best current options while seeing 20 patients a day is a near-impossible task.
“There is this enormous firehose of information they need to stay on top of, and the human brain is limited in its capacity to read millions of studies,” Daniel Nadler, cofounder and CEO of OpenEvidence, told Forbes.
So Nadler, 42, a Harvard Ph.D. who sold his previous company for $550 million back in 2018, set out to solve the problem with artificial intelligence. Now, the startup’s proprietary algorithms search millions of peer-reviewed publications, including in top journals like the New England Journal of Medicine and the Journal of the American Medical Association, to help doctors find the best answers fast, with full citations to papers so doctors can read more for themselves. The software is free for verified doctors to use and makes money through advertising–much like Google does.
Since its founding in 2022, Miami-based OpenEvidence has signed up 40% of doctors in the United States, or more than 430,000, and is adding new ones at a current rate of 65,000 per month. Its revenue from advertising is now coming in at an annualized rate estimated at $50 million. That’s not huge, but thanks to the software’s rapid adoption, investors are betting big: OpenEvidence has raised $210 million led by GV (Google’s venture arm) and Kleiner Perkins at a valuation of $3.5 billion, up from $1 billion at its last financing in February.
The new investment makes Nadler, who owns roughly 60% of the company, a billionaire, with a net worth that Forbes estimates at $2.3 billion. Cofounder Zack Ziegler, the company’s 30-year-old chief technology officer, owns some 10% of the business, worth about $350 million. Nadler was able to hold on to such a large stake by being its first seed investor, putting in some $10 million of his own money before raising any VC funding.
“One of the great things about being a second-time entrepreneur is, I’m not an idiot,” Nadler said. “I think the second thing is going to be bigger than the first so maybe the first $10 million should come from me. That’s by far the smartest financial decision I made in my life…..I wanted to bet on myself.”
Read more here.
BIOTECH AND PHARMA
Hong Kong-based Akeso has notched impressive results for its cancer drug ivonescimab against Merck’s blockbuster Keytruda for patients with non-small cell lung cancer. It gained approval for these patients in China in April, and the company announced today that it has begun clinical trials of the drug for colorectal cancer patients. That pushed the stock up 115% for the year, giving Akeso a market cap around $14 billion. That makes the company’s founder and CEO, Michelle Xia, a billionaire with a net worth of around $1.2 billion. Forbes profiles Xia today.
Plus: Kailera Therapeutics and China’s Hengrui Pharma announced positive phase 3 results for their lead injectable obesity drug, which works similarly to Lilly’s treatment tirzepatide, in overweight or obese individuals in China. The drug showed mean weight loss of 19.2% with no plateau at a dosage of 6 mg in a 48-week trial. On the strength of these results, the companies said they are preparing for a regulatory submission in China, while continuing global clinical trials.
DIGITAL HEALTH AND AI
More than half of doctors and nurses are concerned that patients are self-diagnosing and getting wrong information because of AI, according to a new survey by academic publisher Elsevier. Despite their concerns over misdiagnosis, clinicians still think AI tools hold promise for making their own lives easier, especially for administrative tasks. But only one-third of the survey’s respondents said their workplaces provided adequate access or training for the technology.
PUBLIC HEALTH AND HOSPITALS
A new study from UCLA found that small-group coaching can reduce rates of physician burnout by nearly 30%, suggesting that it’s more effective than traditional (and more costly) one-on-one help. Nearly half of physicians in the U.S. are suffering from burnout, which can lead to mistakes in treating their patients. Burnout is also estimated to cost the healthcare system $4.6 billion a year, largely in costs associated with physician turnover and fewer clinical hours. The study was published in the peer-reviewed Journal of General Internal Medicine.
WHAT WE’RE READING
RFK Jr. claims doctors profit off vaccines. In fact, many lose money on them.
Federal officials said they’d disclose conflicts of interest information for the seven new members of the vaccine advisory committee before its late-June meeting. They haven’t done so yet.
An elite rehab center is using GLP-1 weight-loss drugs to help treat addictions of all kinds.
At for-profit rehab hospitals, where people go to recover from major surgeries and injuries, even grave errors go undisclosed and unpenalized.
23AndMe cofounder Anne Wojcicki’s non-profit organization TTAM Researcher Institute closed on its purchase of the company this week after winning a $305 million bid in June.
Researchers at Tel Aviv University have developed an mRNA vaccine that protects against the bacteria that causes plague.
The recently passed lifetime cap on federal student loans threatens to lower medical school enrollments.
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