Morning Read: Healthcare reform, recession change how healthcare VCs invest

Healthcare reform has changed how healthcare venture capitalists invest. Investment in early stage biotech and medical devices has plummeted since the recession, and investors have switched their focus to inventions that serve simpler functions like lowering operational costs at hospitals and helping hospitals keep patients from being re-admitted, a costly process that the health law ties to new penalties.

“Venture capitalists say one of the trickiest things about this new world of investing is that their returns, in many cases, hinge on humans changing their behavior,” Sarah Varney writes. “And that’s a lot harder than building a robot.”

The “pink slime” panic continues. More than 169,000 people have signed an online petition to get the U.S. Department of Agriculture to remove ground beef that is treated with ammonium hydroxide to be removed from school meals after it was reported last month that McDonald’s would quit using the goo in its hamburgers . Meanwhile, the USDA maintains that it’s OK to eat.

The AIDS Healthcare Foundation is waging a battle against drugmaker Gilead Sciences Inc., which is seeking expanded approval for its HIV drug to also be marketed as a preventive tool. The AHF filed a petition last week urging the FDA not to approve Gilead’s request for Truvada, despite strong early study results indicating that it’s effective for prevention if taken properly. Many people wouldn’t take the drug as indicated, the organization says, which could lead to increased infections because it would reduce use of other preventive measures.


Researchers claim that propranolol, a drug that blocks activation in the area of the brain implicated in emotional responses and is used for treating heart disease also can affect a person’s subconscious attitude toward race. In an Oxford University study (with a very small sample size – only 36 subjects were used), researchers found that the half of the participants who were given the drug scored lower on a a standard test for testing subconscious racial attitude.

Results from a Phase III study of the prostate cancer drug Zytiga in patients who have not had chemotherapy were so strong that safety advisors recommended that patients taking placebos in the study be offered the treatment. Zytiga is approved for treating advanced prostate cancer in patients who already received chemotherapy and is undergoing review for expanded approval.

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