This week in InnovationRx, we explore new legislation that aims to reverse recent Medicaid cuts, the success story of Daniel Nadler who built a ChatGPT for doctors and became a billionaire, major updates from two Chinese biotech companies, insights on doctors’ perspectives on AI, and more. To receive this newsletter in your inbox, subscribe here.
Senator Josh Hawley
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Yesterday, Senator Josh Hawley from Missouri, who previously supported Medicaid cuts under Trump’s healthcare bill, introduced a new bill in the Senate called the Protect Medicaid and Rural Hospitals Act, which aims to reverse many of those cuts. The bill also proposes doubling financial support for rural hospitals and healthcare providers to $100 billion and extending the duration of support to ten years from five.
The Medicaid and Affordable Care Act cuts by Republicans could potentially leave around 12 million Americans uninsured by 2034, according to the Congressional Budget Office. The recently passed bill slashes Medicaid spending by over $1 trillion over the same period, posing a significant threat to hospitals that serve a large number of Medicaid patients.
Hawley’s bill includes provisions to remove a provider tax moratorium that states use to fund their Medicaid programs. It also seeks to repeal sections of the previous legislation that could allow states to reduce Medicaid payments to hospitals.
“I am committed to halting Medicaid reductions and ensuring full permanent funding for rural hospitals,” Hawley stated. The “Big, Beautiful Bill” was signed into law by Trump on July 4 after garnering support from Republican leaders, including Hawley.
Daniel Nadler’s Journey to Billionaire Status with OpenEvidence’s ChatGPT for Doctors
Mauricio Candela for Forbes
For physicians navigating the constant influx of medical research, staying informed can be overwhelming. With a new research paper published every 30 seconds, keeping up while managing a full patient load seems impossible.
Recognizing this challenge, Daniel Nadler, the CEO of OpenEvidence and a Harvard Ph.D., set out to address it using artificial intelligence. OpenEvidence’s proprietary algorithms scour millions of peer-reviewed publications, including prestigious journals like the New England Journal of Medicine and the Journal of the American Medical Association, to provide doctors with quick access to the best solutions, complete with paper citations for further reading. The software is free for verified physicians and generates revenue through advertising, similar to Google’s model.
Since its establishment in 2022, Miami-based OpenEvidence has onboarded 40% of U.S. doctors, totaling over 430,000, and continues to add new users at a rate of 65,000 per month. The platform’s advertising revenue is projected to reach $50 million annually. With investments totaling $210 million led by GV and Kleiner Perkins, OpenEvidence’s valuation has soared to $3.5 billion, up from $1 billion earlier this year.
Nadler, who holds approximately 60% of the company, has become a billionaire, with an estimated net worth of $2.3 billion. His cofounder Zack Ziegler, the company’s CTO, owns a 10% stake valued at around $350 million. Nadler’s strategic decision to be the first seed investor, contributing $10 million before securing VC funding, allowed him to retain a significant ownership stake.
“As a serial entrepreneur, I made the conscious decision to bet on myself with the first $10 million. It turned out to be one of the best financial choices I’ve made,” Nadler remarked. “I was confident that the second endeavor would surpass the first, so investing in myself was the smart move.”
For more details, read the full story here.
BIOTECH AND PHARMA
Hong Kong-based Akeso has achieved remarkable success with its cancer drug ivonescimab, surpassing Merck’s Keytruda in non-small cell lung cancer patients. The drug received approval for this indication in China in April, and the company has now initiated clinical trials for colorectal cancer patients. Akeso’s stock has surged by 115% this year, resulting in a market cap of approximately $14 billion. As a result, the company’s founder and CEO, Michelle Xia, has become a billionaire with an estimated net worth of $1.2 billion. Forbes provides a detailed profile of Xia’s journey.
Additionally, Kailera Therapeutics and China’s Hengrui Pharma have announced positive phase 3 results for their lead injectable obesity drug, demonstrating comparable efficacy to Lilly’s tirzepatide in overweight or obese individuals in China. With a mean weight loss of 19.2% without plateauing at a 6 mg dosage over a 48-week trial, the companies are now preparing for regulatory submission in China while continuing global clinical trials.
DIGITAL HEALTH AND AI
More than half of doctors and nurses express concerns about patients self-diagnosing and receiving inaccurate information due to AI, according to a recent survey conducted by academic publisher Elsevier. Despite apprehensions regarding misdiagnosis, healthcare professionals acknowledge the potential of AI tools in streamlining administrative tasks and enhancing efficiency. However, only one-third of respondents reported sufficient access to or training in utilizing AI technologies within their workplaces.
PUBLIC HEALTH AND HOSPITALS
A recent study by UCLA revealed that small-group coaching can significantly reduce physician burnout rates by nearly 30%, proving to be more effective and cost-efficient than traditional one-on-one interventions. With nearly half of U.S. physicians experiencing burnout, which can lead to errors in patient care, addressing this issue is crucial. The economic impact of burnout on the healthcare system is estimated at $4.6 billion annually, primarily due to expenses related to physician turnover and reduced clinical hours. The study was published in the Journal of General Internal Medicine.
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