Health Care Checkup: Cerner makes purchase, university research funding falls

The Health Care Checkup, a weekly rundown of the state’s top health care headlines, is sponsored by Heyen Wellness Therapies.

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Checking the Pulse

Cerner continues growth with purchase of Siemens Health Services

Cerner’s busy year already made the healthcare information technology company the top private-sector employer in the Kansas City area, and it isn’t finished yet. The latest addition is Siemens Health Services, a subsidiary of German industrial company SiemensAG. The purchase, made for $1.3 billion in cash, brings Cerner’s total employee count to more than 20,000 in more than 40 countries worldwide. It also results in a projected jump in revenue to $4.5 billion, an increase of more than 50 percent compared to 2013. The purchase comes at an opportune time for both companies, as Siemens has been looking to offload its hospital IT division for a while to concentrate on other industries.

Mallinckrodt drives sales up with acquisition, still reports Q3 loss

Mallinckrodt Pharmaceuticals announced a third-quarter loss of $24.1 million, or 41 cents per share, for the third quarter, a 13.6 percent decrease from last year’s Q3 loss of $27.9 million. The company attributes the change to its acquisition in March of Cadence, the maker of Ofirmev, a form of the injectable painkiller acetaminophen. Similar good news for the company’s bottom line could be on the way for the fourth quarter after its purchase of California-based Questcor is finalized. Both are part of the company’s plan to aggressively pursue business in the specialty pharmaceuticals industry, a plan that seems to be working: Net sales for the quarter in that category finished at $414.3 million, up from $308.6 million the previous year.

Missouri university research funding falls

Last year’s federal government sequestration kept an estimated $31.75 million out of Missouri university coffers in 2013. Overall, the 11 largest research universities in Missouri and Southern Illinois saw research funding decrease by about $77.17 million (or 5.5 percent) compared to the year before. Universities nationwide reported reductions similar to or worse than those brought on by the government shutdown, and the changes are raising concerns about the future of funding.

The National Institutes of Health (NIH), consistently one of the biggest sources of funding research for universities in Missouri, recently published a report showing funding rates, award rates and success rates in sharp decline over the last decade. To relieve the problem, Nasser Arshadi, vice provost for research at the University of Missouri-St. Louis, suggests taking steps to continue bringing industry organizations into the funding realm to fill the gap left by the government. “Since two-thirds of the total research and development budget in the U.S. comes from non-federal government sources, we need an effective way of building university-industry research collaboration,” Arshadi told the St. Louis Business Journal.

Quote of the Week

“I think there’s been a flattening of the National Institutes of Health budget and sequestration hit us very hard. We get so much of our research funding from the NIH so anything that affects them affects us.” — Jennifer Lodge, vice chancellor for research at Washington University in St. Louis, on the drop in research funding to Missouri universities this year. 

Tweet of the Week

Not only has Cerner experienced considerable growth this year, but the demand for electronic health records systems such as those the company provides means the upward trend isn’t likely to cease soon.


Correction: August 14, 2014

This story’s headline was updated to eliminate an inaccurate reference to Mallinckrodt’s acquisition of Cadence. Mallinckrodt bought Cadence in March, not recently, as the headline previously suggested.  

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