Fortune Article

Good afternoon, readers—This is Sy.

White House doctor and Rear Admiral Ronny Jackson’s tumultuous nomination by President Donald Trump to lead the Department of Veterans Affairs (VA) came to an abrupt end Thursday. Jackson withdrew his VA nomination—which had already taken some by surprise given his lack of government and leadership experience—amid mounting allegations of misconduct. Those allegations, vehemently denied by Jackson, included claims that the White House physician was drunk while on duty, fostered a hostile work environment, and overprescribed prescription drugs.

That last point, which reportedly earned Jackson the moniker “Candyman” (among the allegations disputed by Jackson as “baseless and anonymous attacks on my character and integrity”), is worth exploring from a broader perspective. Unnamed accusers say Jackson was readily willing to hand out pills like Ambien and Provigil while taking very little in the way of patient histories. But regardless of what Jackson did or did not do, overprescribing medicine is a common element of American health care, according to multiple independent studies.

Overprescribing is often labeled one of the central villains in the opioid epidemic, to cite just one example. A study led by Mayo Clinic researchers found that one of out of every three patients prescribed opioid painkillers after surgery don’t even take a single pill. Not one. Nada. That in and of itself presents a danger for prescription abuse since the pills are just laying around the house, available for non-medical use at a moment’s notice.

“Fewer than 10% of patients disposed of their leftover opioids,” the Mayo Clinic’s scientific director for surgical outcomes, Elizabeth Habermann, told WebMD earlier this month while discussing the study. “We know from the literature that many individuals who are taking heroin actually started their use of narcotics with leftover prescription opioids prescribed to others. So this is a huge risk to our community.”

Elderly Americans are also a regular target of overprescribing and what some argue is excess medical intervention. Last year, studies published in JAMA Internal Medicine and the New England Journal of Medicine found that many older people are routinely prescribed powerful, mind-altering psychotropic drugs even if they’ve never been diagnosed with a condition that calls for the treatments.

Financial incentives may well play a part in this culture of overprescribing. After all, the U.S. medical regimen largely rewards doctors, hospitals, and other stakeholders on the bulk of services they provide (whether those services be diagnostic tests, medical procedures, or prescription drugs) rather than those services’ broader value. And, in the drug industry specifically, physicians who receive significant money from pharmaceutical companies tend to prescribe more pricey brand name prescriptions.

Jackson’s case—if the allegations about his prescription practices are true—is admittedly different from what’s experienced by everyday Americans given his perch at the White House. But the underlying trend may not be all that rare.

Read on for the day’s news.

Sy Mukherjee

@the_sy_guy

sayak.mukherjee@fortune.com

DIGITAL HEALTH

Doctor on Demand secures $74 million in latest funding round. Telemedicine giant Doctor on Demand has secured $74 million in an outside funding round led by Goldman Sachs and Princeville Global. That brings the total investor haul to more than $160 million, according to the company, and will be used to scale up operations. The company says it offers consumers far quicker access to physicians via digital visits which can be scheduled in as little as five minutes. “Access to quality care that puts the consumer in the driver’s seat is critical in moving the healthcare industry forward,” said Bryan Roberts, partner at Venrock (which participated in the latest funding round) and very recent Brainstorm Health contributor, in a statement.

FDA expands its AI, digital health push. Food and Drug Administration (FDA) Commissioner Dr. Scott Gottlieb is continuing his push for broader use of digital health and artificial intelligence in the drug development process. The agency is expanding an initiative launched last year to streamline the regulatory process for getting digital health apps to market and using the tech to fuel new medicines. "AI holds enormous promise for the future of medicine," Gottlieb said at the Health Datapalooza conference in Washington, D.C. Thursday. "We're actively developing a new regulatory framework to promote innovation in this space, and support the use of AI-based technologies." (CNBC)

INDICATIONS

AbbVie handily beats Wall Street's earnings expectations. Shares of AbbVie rose 6% in Thursday trading as the biotech reported higher-than-expected quarterly profits and raised its full-year earnings guidance. The boom was fueled by one old drug and one relatively new one: Humira, the flagship treatment that regularly rings in about $16 billion in yearly sales for AbbVie, and Mavyret, a newly approved hepatitis C treatment that's propping up the company's hepatitis C franchise (a space that has seen declining sales for individual firms in the face of rising competition). (Reuters)

THE BIG PICTURE

Trump move to block Planned Parenthood grants blocked in federal court. A federal judge has blocked President Donald Trump's plan to cut off grants to Planned Parenthood, raising the legal stakes for the controversial move. "The Court finds that HHS arbitrarily and capriciously terminated the (teen pregnancy prevention) Program," wrote U.S. District Court Judge Thomas Rice in his ruling. "The Court determines that the public interest weighs in favor of (Planned Parenthood), as it would prevent harm to the community and prevent loss of data regarding the effectiveness of teen pregnancy prevention." (ABC News)