HMOs Pop on Medicare Decision

 Highlight transcript below to create clipTranscript:  Print  |  Email Go  Click text to jump within videoTue 02 Apr 13 | 02:10 PM ET HMO stocks jumped on decisions on 2013 Medicare rates, but is this all roses? CNBC's Scott Cohn and Ipsita Smolinski, offer insight.

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Idenix Pharma shares sink on patent decision

CAMBRIDGE, Mass. -- Idenix Pharmaceuticals Inc. shares sank Monday after the U.S. Patent and Trademark Office determined a competitor was the first to request a patent for a hepatitis therapy.

The biopharmaceutical company said an appeals board decided that Idenix's patent application for compounds used to treat hepatitis C was filed after Gilead Pharmasset LLC's application. The U.S. Patent and Trademark Office appeals board will next determine which company invented the product first.

Idenix said that it does not believe that the patent application is relevant to any of the compounds it is currently developing, including two that are expected to begin midstage studies within the next few months, or another compound for which it soon plans to file a new drug application.

The news sent shares of Cambridge, Mass.-based Idenix down more than 15 percent to $3.89 by early afternoon, its lowest level in months. The company's stock is approaching the bottom of its 52-week trading range of $3.35 to $11.30.

Hepatitis C is a virus that can lead to life-threatening liver damage and is the main cause of liver transplants in the U.S. The disease is spread through the blood, which can happen through sharing intravenous drug needles or having sex with an infected person. There are around 3 million Americans with the disease, which can go undetected for many years until the liver is severely damaged.

Shares of Gilead Sciences Inc. fell 65 cents to $44.86.

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How A Court Decision Upholding A Maryland Gun Law Could Help Restore Sanity To The Gun Debate

Yesterday, a unanimous panel of the United States Court of Appeals for the Fourth Circuit upheld a Maryland law requiring most gun owners to obtain a permit before they may carry a firearm outside of their home, business or their property. In the process, the court articulated a legal standard that could go a long way towards reining in the kind of ubiquitously armed society favored by fringe lobbying groups such as the National Rifle Association.

The Supreme Court’s decision in District of Columbia v. Heller, which held for the first time in American history that the Second Amendment protects an individual right to own a firearm, was not a particularly coherent opinion. It lists numerous limits on the right to bear arms, but also holds that the single most deadly weapon in the nation — handguns – enjoy special constitutional protection above and beyond that enjoyed by other, less deadly weapons. Nearly 8 in 10 gun murders in the United States are committed with a handgun. Similarly, although the opinion forbids an outright ban on handguns inside the home, it provides much less clarity about the scope of the Second Amendment elsewhere. Much of the opinion strongly suggests that the right to bear arms is far less robust outside of a person’s own home.

The Fourth Circuit’s opinion threads this needle by applying a two-tiered legal standard to gun laws. The court suggests that a law which directly burdens the core right to keep a gun in the home is subject to “strict scrutiny,” the highest level of skepticism judges typically apply to laws. But a law which burdens gun possession outside of the home is subject to less skeptical review — what lawyers call “intermediate scrutiny.”

The implications of this shift is that it allows judges to be far more respectful to the concerns animating the elected officials who enact gun laws when they determine whether or not those laws are consistent with the Second Amendment. The court’s opinion highlights numerous arguments justifying Maryland’s limits on carrying guns in public. Among them:

“Decreasing the availability of handguns to criminals via theft“: The court cites an explanation that “criminals in Maryland are constantly looking for ways to arm themselves with handguns, including by stealing them from others. It is not uncommon for criminals to obtain these guns during street altercations.”Preventing arguments from escalating into murders: Nearly half of all homicides occur after an argument or fight. As the court notes, reducing the number of guns in public places will decrease “the likelihood that basic confrontations between individuals would turn deadly.”Preventing fatal police errors: Contrary to the NRA’s claims that armed citizens will save lives by doling out vigilante justice to potential murders, the court notes that during a confrontation between police and a gunman “an additional person bearing a gun might cause confusion as to which side of the confrontation the person is on, which could lead to hesitation by the police officer and the potential for innocent victims, including the permit holder, innocent bystanders, and police officers.”Fostering good relationships between police and citizens: “If the number of legal handguns on the streets increased significantly, [police] officers would have no choice but to take extra precautions before engaging citizens, effectively treating encounters between police and the community that now are routine, friendly, and trusting, as high-risk stops, which demand a much more rigid protocol and a strategic approach.”Allowing police to focus their resources efficiently: “Increasing the number of people legally carrying handguns in the streets will also force [police] officers to spend more resources responding to reports about handgun sightings and engaging handgun carriers to ensure they are doing so lawfully.” Additionally, “[p]olice officers would also have a harder time identifying potential security risks if more people without good and substantial reason to carry a handgun were able to do so, making it more difficult to respond when necessary.”

To be clear, the Fourth Circuit’s conclusion that gun rights are less robust outside the four walls of a gun owner’s home is far from novel. Heller itself implies such a distinction, and previous court decisions drew a similar line to the one the Fourth Circuit relied on yesterday. If this line is ultimately upheld by the Supreme Court, however, it could go a long way towards keeping dangerous guns off America’s streets.

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FDA Forced To Ditch Graphic Cigarette Warning Labels In Wake Of Appellate Court Decision

In a victory for the tobacco industry, the U.S. Food and Drug Administration (FDA) and the Justice Department have decided to bow out of an ongoing legal battle with several of America’s biggest cigarette manufacturers over proposed regulations requiring all of their products to be conspicuously branded with graphic imagery and warnings about their adverse health consequences.

Mandating the labels — which include visceral depictions of tobacco’s carcinogenic effect on the lungs, throat, and mouth — was made possible under the auspices of the Family Smoking Prevention and Tobacco Control Act of 2009. That landmark legislation put tobacco regulation under the FDA’s purview for the first time in American history and instructed the body to develop new cigarette labels with color graphics, prompting the FDA to propose the nine graphic warnings that have drawn tobacco distributors’ ire.

But a federal appellate court affirmed a lower court’s decision to strike down the proposed rule in March, claiming that its “graphic-image requirements are not the type of purely factual and uncontroversial disclosures that are reviewable under this less stringent standard” of 1st Amendment protections against compelled commercial speech — an argument heartily endorsed by the tobacco lobby:

Some of the nation’s largest tobacco companies, including R.J. Reynolds Tobacco Co., sued to block the mandate to include warnings on cigarette packs as part of the 2009 Family Smoking Prevention and Tobacco Control Act that, for the first time, gave the federal government authority to regulate tobacco. The nine labels originally set to appear on store shelves last year would’ve represented the biggest change in cigarette packs in the U.S. in 25 years.

Tobacco companies increasingly rely on their packaging to build brand loyalty and grab consumers — one of the few advertising levers left to them after the government curbed their presence in magazines, billboards and TV. They had argued that the proposed warnings went beyond factual information into anti-smoking advocacy.

The government, however, argued the images were factual in conveying the dangers of tobacco, which is responsible for about 443,000 deaths in the U.S. a year.

The legal argument against the labeling requirements is certainly not implausible — in fact, that’s likely the reason that the federal government chose not to appeal to the Supreme Court. But it’s a standard of free speech that federal judges apply asymmetrically, as they don’t give doctors who provide abortions the same protections against government-compelled speech as they grant to the multibillion dollar tobacco industry.

Brand labeling has become Big Tobacco’s signature avenue for advertising to its consumer base, since federal law has prohibited television advertisements for tobacco since the 1970s, and additional restrictions were included in the more recent legislation signed by President Obama. Consequently, the FDA’s new labels could have been an effective method of giving consumers information about tobacco’s negative health effects — especially considering that studies have shown that pictures speak louder than words in anti-smoking campaigns.

While American smoking rates have plunged in the last several decades, low-income Americans — particularly women — who are particularly unable to afford the massive health care costs of smoking-related illness still use tobacco in high numbers. Until the FDA comes up with a labeling rule that can withstand judicial scrutiny, public health and anti-smoking advocates may have to rely on more parochial efforts, such as New York City Mayor Michael Bloomberg’s (I) new initiative to crack down on public cigarette displays.

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Zogenix shares rise on delayed FDA drug decision

WASHINGTON -- Shares of drugmaker Zogenix Inc. surged Wednesday, as investors speculated that a delayed decision on the company's lead drug will lead to positive approval in coming weeks.

THE SPARK: Zogenix reported Tuesday that the Food and Drug Administration would take longer than expected to review its drug Zohydro, a long-acting version of the painkiller hydrocodone. The FDA did not provide an explanation for the delay but indicated it "would likely be brief and may last only several weeks." Zogenix said the company has not been asked to submit any additional information.

THE BIG PICTURE: If approved Zohydro would be the first pure hydrocodone medication available in the U.S. Currently available products combine the drug with lower-grade painkillers such as acetaminophen. The company's announcement that FDA is still reviewing the drug may have surprised investors in light of the drug's negative review from federal advisers. In December an FDA panel of specialists voted 11-2 against the drug due to concerns that it could be abused by people addicted to painkillers. Hydrocodone belongs to a family of medicines known as opiates, which includes morphine, oxycodone, codeine and methadone.

The FDA does not have to follow the guidance of its advisers, though it often does.

THE ANALYSIS: Wells Fargo analyst Michael Tong said in a note to investors that the delay may bode well for Zogenix, since the FDA could have rejected the drug outright if it thought it was unapprovable. Tong said the short-term delay suggests the agency is working on measures to make sure the drug is used safely.

"We continue to believe the odds for eventual approval are high. We speculate FDA is dealing with issues of access and potential misuse," Tong said. He rates the company as "outperform" with a price target of $1.21.

SHARE ACTION: Shares of San Diego-based Zogenix Inc. rose 46 cents, or 38 percent, to $1.67 in afternoon trading.

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Clinton: Health won't 'factor in at all' in decision to run for president

Secretary of State Hillary Clinton said her recent health issues won't "factor in at all" in a decion on whether or not to run for higher office.

"I have no doubt that I am healthy enough and my stamina is great enough and I'll be fully recovered to do whatever I choose to do," Clinton told "Andrea Mitchell Reports" in an interview posted online Tuesday.

Despite confidence in her health, Clinton continued to insist that she hasn't made any decisions regarding the 2016 race for the White House.

"[I] don't have any decisions made. I have no real plans to make any such decisions. I'm looking forward to some very quiet time catching up on everything from sleep, to reading, to walking with my family. I think it’s hard to imagine for me what it will be like next week when I wake up and I have nowhere to go. Maybe I'll go back to sleep for a change," she said.

Clinton, who is doing a round of exit interviews before she steps down on Friday, told CNN that blood clots are "very common," affecting "millions of people."

"I am lucky because I have been very healthy. I feel great. I've got enormous amounts of energy that have to be harnessed and focused, so I'm very fortunate and I'm looking forward to this next chapter in my life, whatever it is," she said.

Clinton was hospitalized in December after doctors found a blood clot stemming from a concussion she has suffered earlier. The clot was found in her head between her brain and right ear.

She drew attention last week for a rare joint interview, which aired Sunday on CBS's "60 Minutes," with President Obama, a former political rival-turned ally and friend.

“The main thing is I just wanted to have a chance to publicly say 'thank you,' because I think Hillary will go down as one of the finest secretaries of State we've had,” Obama told CBS.

The Senate officially approved Sen. John Kerry (D-Mass.) to succeed Clinton in a 94-3 vote Tuesday.

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