Brainstorm Health: Justice Department Vs Opioid Makers, Rare Disease Day, Celgene Setback

Hello, readers! This is Sy.

The U.S. Department of Justice is wading into a hot button case centered on what’s become one of the most significant medical crises of modern times: The prescription painkiller and opioid overdose epidemic.

Attorney General Jeff Sessions announced on Tuesday that the Justice Department will issue a “statement of interest” in a blockbuster lawsuit centered on opioid drug makers–and the companies which distribute the treatments—based in Ohio. In essence, that means the federal government is showing a tangible interest in propping up suits which target both opioid manufacturers and distributors who are accused of using misleading marketing practices to prop up potentially addictive products. And the legal wrangling, based in a federal district court in Cleveland that combines hundreds of complaints across the country, wraps up big names like McKesson, Cardinal Health, OxyContin maker Purdue Pharma, and others.

The government doesn’t actually become a plaintiff when issuing a statement of interest in these cases. But such statements do indicate the government’s priorities on matters that affect the federal enterprise. (To be clear: All of these companies involved deny wrongdoing and say they are dedicated to fighting the opioid epidemic.)

Here’s what the Attorney General said, as the New York Times reports, during a press conference on Tuesday, about a planned move to create a task force to examine opioid makers and distributors and the local lawsuits launched against them: “We will use criminal penalties. We will use civil penalties. We will use whatever tools we have to hold people accountable for breaking our laws.”

Read on for the day’s news.

Sy Mukherjee

@the_sy_guy

sayak.mukherjee@fortune.com

DIGITAL HEALTH

Collective Health raises $110 million, unveils employer health care platform. Digital health upstart Collective Health has raised another $110 million from partners including Sun Life Financial (in addition to existing partners like Alphabet's GV and others); it also unveiled its employer-focused and web-based health platform, which aims to help employers control their health care spending by monitoring medical usage and costs. Bloomberg has a useful breakdown of the company's strategy. (Bloomberg)

INDICATIONS

Celgene stock hit as FDA declines to review MS drug. Shares of Celgene dropped more than 8% in Wednesday trading after news broke that the Food and Drug Administration (FDA) had declined to review the firm's New Drug Application (NDA) for a multiple sclerosis treatment. The FDA "determined that the nonclinical and clinical pharmacology sections in the NDA were insufficient to permit a complete review," according to Celgene, which added that it would seek immediate guidance on how to address the issues. (TheStreet)

AstraZeneca to spin off autoimmune drugs into new biotech. British pharma giant AstraZeneca is spinning off six drugs from its pipeline (including three in the pre-clinical stage and three in the clinical stage) into a new biotech company called Viela Bio, which will focus on inflammation and autoimmune diseases. It's the latest example of big pharma companies separating non-core assets in their experimental pipelines to focus on what they think will be the true money makers (and the less risky bets). (Reuters)

THE BIG PICTURE

Today is Rare Disease Day. February 28 is Rare Disease Day. This is one of the most difficult spaces in which to innovate given small patient populations and a whole bunch of other practical implementation problems; but, as firms like PwC point out, there's been an increased focus on rare disorder treatments (generally defined as those that affect fewer than 200,000 people during any given time in the U.S.). For instance, the FDA has been providing an increasing number of "orphan drug" designations in an attempt to prop up the space, among other initiatives.