I learned this week that Mike Huckman of CNBC and Pharma’s Market (http://www.cnbc.com/id/15837675 ) is leaving for a PR firm. His last day is May 7th. I’ve always enjoyed reading his blog which set a very high standard and was always topical. Unfortunately, since his blog is part of a corporate website, we probably won’t see his past blogs much longer. I encourage readers to check out his blog before it disappears. Mike, good luck and thank you for all your past journalistic contributions!
OK, now, what’s on with my aside about Mike being a canary in the mine? In the old days, really old, like before black and white television without remotes, coal miners would take canaries with them into the mines to give early warning about the buildup of dangerous gases. Canary falls over dead, miners skedaddle, you get the idea.
Don’t worry. I’m not suggesting that anything that drastic is going to happen to Mike. But, what I am suggesting is that when a journalist of his caliber who has been covering the pharmaceuticals industry for the last several years for a major media outlet to go into another line of work, you have to ask yourself what’s going on.
Lately, I’ve been blogging about the lack of momentum and direction in Big Pharma. Mike’s departure seems to me to be yet another sign of an industry in trouble. (No, I’m not talking about the media industry. I don’t cover that. For more on that industry, check out Julia Boorstin’s Media Money blog (http://www.cnbc.com/id/15892686 ) on CNBC.) Mike covered an important industry for a major news network. Now, he’s going off to join the corporate rat race. (Yes, I know that CNBC has its own corporate rat race but you get the idea.) There may be a replacement but somehow I suspect that it’ll be a young wannabe on a part time basis.
Less newsprint, no new products, declining revenues and profits, and no drama don’t make for a good situation for Big Pharma. The auto industry is in a lot of trouble but everyone wants to know what will happen next at General Motors. Will the Chinese, or won’t they, buy Hummer? Will Toyota survive? Soap operas are made of this stuff. Ratings will thrive. Phil LeBeau (Behind the Wheel (http://www.cnbc.com/id/16008341 ) at CNBC) won’t be leaving anytime soon. Big Pharma lacks that kind of plotline.
I’m starting to feel a little lonely out here. To say nothing of trying to divine where this industry is going. But, I enjoy this and Big Pharma is certainly a challenging assignment. Good luck to Mike and everyone else out there covering life sciences!
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Monday, April 26, 2010
Sunday, April 25, 2010
FDA Recalls Pfizer's Antipsychotic Drug Geodon due to Overdosing in Clinical Trial
Our colleague, Lee Howard of "The Day" newspaper in Connecticut wrote the following article that appeared in his newspaper this week (http://www.theday.com/article/20100421/BIZ02/304219875/-1/BIZ). He was kind enough to ask for our view and we in turn are publishing that article:
"Pfizer Inc. has received a warning letter from the U.S. Food and Drug Administration reproaching the company for failing to monitor properly studies of its antipsychotic drug Geodon that led to excessive doses being administered to 13 children and at least 20 adults.
The letter, addressed April 9 to Martin Mackay, president of Pfizer's PharmaTherapeutics Research & Development division and first reported Tuesday by the Reuters news service, said the FDA had found an internal company report dated Nov. 7, 2006, that indicated "dosing errors" had occurred.
The initial seven overdoses, for a medication trial in 2006 that the FDA redacted in its warning letter but which Pfizer confirmed was Geodon, were blamed on a lack of proper training. But six more children in another study more than a year later received excessive doses as well even after personnel were retrained, according to the FDA.
One patient received overdoses for 30 days, and others reported tremors and other side effects from the mistake, the agency said in its letter, available online at www.fda.gov/ICECI/EnforcementActions/WarningLetters/ucm208976.htm.
"We conclude that you did not adhere to the applicable statutory requirements and FDA regulations governing the conduct of clinical investigations," the agency added.
Among the FDA's findings:
• Pfizer failed to officially designate someone sufficiently trained in medical issues to answer questions that would lead to informed consent, as required by regulations.
• Pfizer monitors visited one of the studies nine times but never picked up on the overdoses; instead, a company data management unit made the discovery.
• Pfizer failed to keep study investigators informed about new observations regarding reactions to the drug, especially about adverse effects and safe uses.
Pfizer said in a statement through its director of worldwide communications, Kristen E. Neese, that it is "committed to fully addressing FDA's concerns."
Neese pointed out that many of the FDA's insights about the drug-trial problems were first uncovered and reported by Pfizer itself, as part of its monitoring and quality assurance processes.
"Since that time, Pfizer has instituted several new measures designed to improve monitoring and execution of clinical trials, including our oversight of clinical investigators," Neese said.
Neese said Pfizer will identify to the FDA in the next two weeks several clinical-trial enhancements that the company believes will present similar issues in the future.
Larry Rothman, a blogger on the drug industry and chief executive officer of Pharma Flex, a temporary staffing firm in Fort Lauderdale, Fla., said warning letters regarding clinical trials are rare. Generally speaking, he said, trials are very closely monitored both because of potential hazards to patients and because drug companies must show rigor in their administration of the experimental medications to get statistically meaningful results.
"This is a very unusual event," he said, "but it looks like Pfizer did their best to fix it."
The warning letter to Pfizer followed at one-month investigation last year by two FDA inspectors. Pfizer subsequently acknowledged problems with its clinical investigations, but a July 2009 response letter to the investigation "did not contain a detailed outline of procedures or processes that would be implemented to present future occurrences," according to the agency.
The FDA also noted that the failure to properly monitor its investigations was a repeat violation, since the agency had sent a similar letter to the company after a 2005 inspection that showed widespread overdosing of study subjects."
"Pfizer Inc. has received a warning letter from the U.S. Food and Drug Administration reproaching the company for failing to monitor properly studies of its antipsychotic drug Geodon that led to excessive doses being administered to 13 children and at least 20 adults.
The letter, addressed April 9 to Martin Mackay, president of Pfizer's PharmaTherapeutics Research & Development division and first reported Tuesday by the Reuters news service, said the FDA had found an internal company report dated Nov. 7, 2006, that indicated "dosing errors" had occurred.
The initial seven overdoses, for a medication trial in 2006 that the FDA redacted in its warning letter but which Pfizer confirmed was Geodon, were blamed on a lack of proper training. But six more children in another study more than a year later received excessive doses as well even after personnel were retrained, according to the FDA.
One patient received overdoses for 30 days, and others reported tremors and other side effects from the mistake, the agency said in its letter, available online at www.fda.gov/ICECI/EnforcementActions/WarningLetters/ucm208976.htm.
"We conclude that you did not adhere to the applicable statutory requirements and FDA regulations governing the conduct of clinical investigations," the agency added.
Among the FDA's findings:
• Pfizer failed to officially designate someone sufficiently trained in medical issues to answer questions that would lead to informed consent, as required by regulations.
• Pfizer monitors visited one of the studies nine times but never picked up on the overdoses; instead, a company data management unit made the discovery.
• Pfizer failed to keep study investigators informed about new observations regarding reactions to the drug, especially about adverse effects and safe uses.
Pfizer said in a statement through its director of worldwide communications, Kristen E. Neese, that it is "committed to fully addressing FDA's concerns."
Neese pointed out that many of the FDA's insights about the drug-trial problems were first uncovered and reported by Pfizer itself, as part of its monitoring and quality assurance processes.
"Since that time, Pfizer has instituted several new measures designed to improve monitoring and execution of clinical trials, including our oversight of clinical investigators," Neese said.
Neese said Pfizer will identify to the FDA in the next two weeks several clinical-trial enhancements that the company believes will present similar issues in the future.
Larry Rothman, a blogger on the drug industry and chief executive officer of Pharma Flex, a temporary staffing firm in Fort Lauderdale, Fla., said warning letters regarding clinical trials are rare. Generally speaking, he said, trials are very closely monitored both because of potential hazards to patients and because drug companies must show rigor in their administration of the experimental medications to get statistically meaningful results.
"This is a very unusual event," he said, "but it looks like Pfizer did their best to fix it."
The warning letter to Pfizer followed at one-month investigation last year by two FDA inspectors. Pfizer subsequently acknowledged problems with its clinical investigations, but a July 2009 response letter to the investigation "did not contain a detailed outline of procedures or processes that would be implemented to present future occurrences," according to the agency.
The FDA also noted that the failure to properly monitor its investigations was a repeat violation, since the agency had sent a similar letter to the company after a 2005 inspection that showed widespread overdosing of study subjects."
Thursday, April 22, 2010
Big Pharma – Will It Get Any Better?
I’m still on this kick that life sciences and Big Pharma, in particular, are stuck and aren’t getting better anytime soon. I’ve been out trolling the Net looking for any hints of anything that might indicate either I’m wrong or there’s a turnaround coming soon. And, guess where this is going, I’m not finding much. In fact, I’m not finding anything. (I’m not counting spin doctoring materials churned out by Big Pharma. If you read those you’d run out and load up on their stocks.)
What I am finding tends to support what this blog has been saying for a while, Big Pharma’s not going anywhere anytime soon but down. I’d like to call out a blog which I recently came across whose author, Pharmboy a member at Phil’s Stock World, has recently posted a blog entitled “The Calm Before the Storm – Big Pharma Is Gonna Have Big Problems and Pfizer is the Biggest” (http://seekingalpha.com/instablog/6284-philip-davis/60352-the-calm-before-the-storm-big-pharma-is-gonna-have-big-problems-and-pfizer-is-the-biggest ) that gives a detailed analysis of the trends affecting the industry.
Pharmboy (that’s a great name for a blogger isn’t it?) predicts that Big Pharma revenues will stop growing by 2014. He notes as this blog has that growth will have to come from acquisitions and explains how picking the right science will be essential for making the right investments. This is an important point, because some of the larger pharmaceutical companies are run by what I call professional managers, MBA types with a good handle on numbers, marketing, branding, and the like but who really don’t have a clue about the basic sciences let alone the complex, advanced theories that are behind modern drugs. The recent financial meltdown on Wall Street shows what happens when senior management loses touch with their products.
The blog also lists the major drugs coming off patent in the next several years and estimates that these represented $49.9 billion in 2009 revenues. One point where Pharmboy differs from this blog is that he believes some of the pharmaceutical companies, Novartis (NVS) and Merck (MRK) actually have good drug pipelines while Abbott’s (ABT) is weak but could be augmented by acquisitions.
Pfizer (PFE) is singled out for criticism for paying too much for Wyeth (WYE) and not keeping an eye on the science. He also writes about the inefficiencies and lack of innovation in a larger organization like Pfizer.
I’ve called out Pharmboy’s blog because it’s a very good summary of the issues facing Big Pharma today. What I want to know is when will the main stream media begin to take a closer look here as well? Finally, how about the financial community? When will they begin to challenge the valuations of Big Pharma?
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
What I am finding tends to support what this blog has been saying for a while, Big Pharma’s not going anywhere anytime soon but down. I’d like to call out a blog which I recently came across whose author, Pharmboy a member at Phil’s Stock World, has recently posted a blog entitled “The Calm Before the Storm – Big Pharma Is Gonna Have Big Problems and Pfizer is the Biggest” (http://seekingalpha.com/instablog/6284-philip-davis/60352-the-calm-before-the-storm-big-pharma-is-gonna-have-big-problems-and-pfizer-is-the-biggest ) that gives a detailed analysis of the trends affecting the industry.
Pharmboy (that’s a great name for a blogger isn’t it?) predicts that Big Pharma revenues will stop growing by 2014. He notes as this blog has that growth will have to come from acquisitions and explains how picking the right science will be essential for making the right investments. This is an important point, because some of the larger pharmaceutical companies are run by what I call professional managers, MBA types with a good handle on numbers, marketing, branding, and the like but who really don’t have a clue about the basic sciences let alone the complex, advanced theories that are behind modern drugs. The recent financial meltdown on Wall Street shows what happens when senior management loses touch with their products.
The blog also lists the major drugs coming off patent in the next several years and estimates that these represented $49.9 billion in 2009 revenues. One point where Pharmboy differs from this blog is that he believes some of the pharmaceutical companies, Novartis (NVS) and Merck (MRK) actually have good drug pipelines while Abbott’s (ABT) is weak but could be augmented by acquisitions.
Pfizer (PFE) is singled out for criticism for paying too much for Wyeth (WYE) and not keeping an eye on the science. He also writes about the inefficiencies and lack of innovation in a larger organization like Pfizer.
I’ve called out Pharmboy’s blog because it’s a very good summary of the issues facing Big Pharma today. What I want to know is when will the main stream media begin to take a closer look here as well? Finally, how about the financial community? When will they begin to challenge the valuations of Big Pharma?
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Sunday, April 18, 2010
Life Sciences Industry – What’s Going On?
Maybe I’m numb or going through withdrawal after the passage of the Patient Protection and Affordable Care Act but things seem to be awfully quiet in the life sciences industry lately. I look at other industries, financial services, automotive, and things are hopping. Even railroads have mergers and acquisitions going on.
While I can’t admit to exhaustive research in the life sciences industry, I just haven’t seen a lot of momentum behind anything lately. There are no blockbuster products, no big mergers and acquisitions, or no big research ideas. (I apologize to all those researchers slaving away but they really need to get better publicists.) Business seems to be atrophying. What’s going on?
Are we looking at an industry that’s going away? Now, I’m sure some of you are wondering what I’m rambling about this time. Am I maybe overreaching here? I don’t think so. History’s on my side. Remember the personal computer industry? That went through a similar cycle of boom and bust, if somewhat more accelerated. Once upon a time the media was full of stories about new products, companies, and ideas. Not to mention the personalities? Anyone remember Adam Osborne? (In case you’re curious, he died back in 2003 in India.) Today, the industry’s products are commodities manufactured in China. Some might even argue that with new innovations like iPads or PDA’s personal computers are going the way of the buggy whip.
When I visit Mike Huckman’s blog (http://www.cnbc.com/id/15837675 ) I don’t see any trends developing. (No criticism of Mike is intended, whose blog is one of my favorites (I wonder if he will continue as he is rumored to be leaving CNBC for a PR firm this month), he can only write about what’s out there.) There almost seems to be a defensive posture in the industry. Products are being recalled, regulators are becoming more aggressive, and healthcare reform weighs on the industry.
So what does this mean? If the personal computer industry is any example then consolidation, lower prices, and possible business failures are safe guesses. Maybe this is life science’s high water mark. Or, maybe not. One thing’s for sure, the life sciences industry is in a state of flux. Big time.
All the old rules seem to be changing now. At least as far as life sciences go. The challenge will be identifying what will be the clues to the turnaround, if there is a turnaround.
I’m going to make another one of my predictions. The life sciences industry is going to go way for a while. A long while. The industry’s business fundamentals are askew. Globalization isn’t helping. The regulators are struggling. My blog last week about Myriad Genetics (MYGN) and its legal problems is another piece of evidence. Healthcare reform is beginning in the States. A new generation of companies and managers are needed. I’ll be following this one.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
While I can’t admit to exhaustive research in the life sciences industry, I just haven’t seen a lot of momentum behind anything lately. There are no blockbuster products, no big mergers and acquisitions, or no big research ideas. (I apologize to all those researchers slaving away but they really need to get better publicists.) Business seems to be atrophying. What’s going on?
Are we looking at an industry that’s going away? Now, I’m sure some of you are wondering what I’m rambling about this time. Am I maybe overreaching here? I don’t think so. History’s on my side. Remember the personal computer industry? That went through a similar cycle of boom and bust, if somewhat more accelerated. Once upon a time the media was full of stories about new products, companies, and ideas. Not to mention the personalities? Anyone remember Adam Osborne? (In case you’re curious, he died back in 2003 in India.) Today, the industry’s products are commodities manufactured in China. Some might even argue that with new innovations like iPads or PDA’s personal computers are going the way of the buggy whip.
When I visit Mike Huckman’s blog (http://www.cnbc.com/id/15837675 ) I don’t see any trends developing. (No criticism of Mike is intended, whose blog is one of my favorites (I wonder if he will continue as he is rumored to be leaving CNBC for a PR firm this month), he can only write about what’s out there.) There almost seems to be a defensive posture in the industry. Products are being recalled, regulators are becoming more aggressive, and healthcare reform weighs on the industry.
So what does this mean? If the personal computer industry is any example then consolidation, lower prices, and possible business failures are safe guesses. Maybe this is life science’s high water mark. Or, maybe not. One thing’s for sure, the life sciences industry is in a state of flux. Big time.
All the old rules seem to be changing now. At least as far as life sciences go. The challenge will be identifying what will be the clues to the turnaround, if there is a turnaround.
I’m going to make another one of my predictions. The life sciences industry is going to go way for a while. A long while. The industry’s business fundamentals are askew. Globalization isn’t helping. The regulators are struggling. My blog last week about Myriad Genetics (MYGN) and its legal problems is another piece of evidence. Healthcare reform is beginning in the States. A new generation of companies and managers are needed. I’ll be following this one.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Saturday, April 17, 2010
Oracle Spends Big to be a Leader in Pharmaceutical/Biotechnology Clinical Software
On Friday, April 16, 2010 Oracle (ORCL) announced that it would pay $685 million to acquire Phase Forward Incorporated (PFWD) and integrate it into the Oracle Health Sciences Global Business Unit. This seems to be a carefully considered strategy to dominate clinical development software and provide a one stop superstore of this software when integrated with the previous acquisitions by Oracle of Siebel and its eClinical Suite as well as Relsys a key provider of drug safety and risk management solutions with advanced analytics for the life sciences industry. This may very well be the oft described clinical ecosystem that many senior Pharmaceutical R&D executives have been seeking a way to improve efficiencies and lower costs.
This acquisition does not come cheap—a premium of 30% over the prior day market price and a price that represents over 3.1 times 2009 revenues of $213 million or an astonishing 61 times net profit of $11.2 million-suggests that Oracle sees significant synergies in its product lines.
In our opinion this is a win-win combination for Oracle and Phase Forward since the extraordinary marketing power that Oracle brings should boost Phase Forward Sales while the Phase Forward products fill in significant gaps that Oracle has. Additionally, the concept of Software as a Service (SAAS) has been furthered within Oracle based on Phase Forward's Integrated Clinical Research Suite (ICRS) which could be the glue between Siebel eClinical and the Relsys Product Suites. The possibility of a full service “cloud computing” offering is a distinct possibility in our thinking. The challenge of seamless integration of all this can be problematic and articulation of the value proposition to their clients will need to be clearly defined.
The other questions left to ponder is what will key competitors such as Microsoft and SAP do to be competitive in this space and what acquisitions will come next. One further issue to consider is the enormous potential for consulting and support services and what moves the market leaders (IBM, Accenture, TCS, Infosys, Capgemini, etc.) and more specialized players will do to garner parts of this business.
This acquisition does not come cheap—a premium of 30% over the prior day market price and a price that represents over 3.1 times 2009 revenues of $213 million or an astonishing 61 times net profit of $11.2 million-suggests that Oracle sees significant synergies in its product lines.
In our opinion this is a win-win combination for Oracle and Phase Forward since the extraordinary marketing power that Oracle brings should boost Phase Forward Sales while the Phase Forward products fill in significant gaps that Oracle has. Additionally, the concept of Software as a Service (SAAS) has been furthered within Oracle based on Phase Forward's Integrated Clinical Research Suite (ICRS) which could be the glue between Siebel eClinical and the Relsys Product Suites. The possibility of a full service “cloud computing” offering is a distinct possibility in our thinking. The challenge of seamless integration of all this can be problematic and articulation of the value proposition to their clients will need to be clearly defined.
The other questions left to ponder is what will key competitors such as Microsoft and SAP do to be competitive in this space and what acquisitions will come next. One further issue to consider is the enormous potential for consulting and support services and what moves the market leaders (IBM, Accenture, TCS, Infosys, Capgemini, etc.) and more specialized players will do to garner parts of this business.
Sunday, April 4, 2010
Myriad Genetics – A Sign of the Future?
I’m going to step away from my recent blogs about the Patient Protection and Affordable Care Act because I think time is needed to see what happens next and there is so much else to blog about in life sciences these days. And, thanks to Federal judge Robert Sweet of the U.S. Circuit Court in New York City, I’ve got a great topic for this blog.
You may have heard about this one already. Seems that Judge Sweet threw out the practice of patenting human genes by invalidating patents held by Myriad Genetics (MYGN) relating to breast and ovarian cancer. The American Civil Liberties Union (ACLU), the American Medical Association (AMA), the March of Dimes, and a slew of other interested parties got together and ganged up on Myriad. Talk about having a bad day. Obamacare’s passing probably didn’t make the mood at Myriad’s headquarters any better. (See Scott Canon’s article at The Kansas City Star for a very comprehensive summary http://www.kansascity.com/2010/04/02/1853748/court-ruling-puts-human-gene-patenting.html .) While I may be over-dramatizing a bit here, I suspect that the emotional issue of access to affordable women’s health care probably contributed to Myriad’s misfortunes. Also, Myriad’s lack of a legal war chest as compared to more deep pocketed bio-tech players probably didn’t hurt either.
Given the American Idol winner-take-all nature of the U.S. legal system, we’re far from a final verdict here until we finish with the U.S. Supreme Court. (Listen to or read the interview between National Public Radio’s (NPR) Ira Flatow and Dr. Robert Cook-Deegan for more information on this aspect of the story http://www.npr.org/templates/story/story.php?storyId=125502332 .) Until then, there will be uncertainty in the bio-tech industry. For about two decades, there has been an assumption that human genes could be patented just like any other good idea. The little exception about naturally occurring substances didn’t seem to bother anyone except those dismissed as marginal extremists or socialists.
Well, guess what? Looks like the extremists and socialists weren’t so marginal after all. What we may be seeing here is a fundamental shift in how this country views, not all only healthcare, but fundamental research and science as well. Maybe the recent financial meltdown which many view as the result of greedy investment bankers on Wall Street has caused people to be doubtful of free market solutions for important matters like healthcare and who owns intellectual property like the human genome. I’d like to point out how in the final push for the passage of healthcare reform, supporters took aim on healthcare insurers. Rather effectively, too, I might add.
As for Myriad, check out Adam Feuerstein’s blog on TheStreet.com (http://www.thestreet.com/story/10715426/1/biotech-stock-mailbag-myriad-genetics.html?cm_ven=GOOGLEFI ) for a financial overview of the company and its market value. This will be a company and a topic that we’ll becoming back to a lot in the future.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
You may have heard about this one already. Seems that Judge Sweet threw out the practice of patenting human genes by invalidating patents held by Myriad Genetics (MYGN) relating to breast and ovarian cancer. The American Civil Liberties Union (ACLU), the American Medical Association (AMA), the March of Dimes, and a slew of other interested parties got together and ganged up on Myriad. Talk about having a bad day. Obamacare’s passing probably didn’t make the mood at Myriad’s headquarters any better. (See Scott Canon’s article at The Kansas City Star for a very comprehensive summary http://www.kansascity.com/2010/04/02/1853748/court-ruling-puts-human-gene-patenting.html .) While I may be over-dramatizing a bit here, I suspect that the emotional issue of access to affordable women’s health care probably contributed to Myriad’s misfortunes. Also, Myriad’s lack of a legal war chest as compared to more deep pocketed bio-tech players probably didn’t hurt either.
Given the American Idol winner-take-all nature of the U.S. legal system, we’re far from a final verdict here until we finish with the U.S. Supreme Court. (Listen to or read the interview between National Public Radio’s (NPR) Ira Flatow and Dr. Robert Cook-Deegan for more information on this aspect of the story http://www.npr.org/templates/story/story.php?storyId=125502332 .) Until then, there will be uncertainty in the bio-tech industry. For about two decades, there has been an assumption that human genes could be patented just like any other good idea. The little exception about naturally occurring substances didn’t seem to bother anyone except those dismissed as marginal extremists or socialists.
Well, guess what? Looks like the extremists and socialists weren’t so marginal after all. What we may be seeing here is a fundamental shift in how this country views, not all only healthcare, but fundamental research and science as well. Maybe the recent financial meltdown which many view as the result of greedy investment bankers on Wall Street has caused people to be doubtful of free market solutions for important matters like healthcare and who owns intellectual property like the human genome. I’d like to point out how in the final push for the passage of healthcare reform, supporters took aim on healthcare insurers. Rather effectively, too, I might add.
As for Myriad, check out Adam Feuerstein’s blog on TheStreet.com (http://www.thestreet.com/story/10715426/1/biotech-stock-mailbag-myriad-genetics.html?cm_ven=GOOGLEFI ) for a financial overview of the company and its market value. This will be a company and a topic that we’ll becoming back to a lot in the future.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Sunday, March 28, 2010
Healthcare Reform: Now What?
The Patient Protection and Affordable Care Act has passed. Twice. Healthcare reform, sought after since Teddy Roosevelt, has arrived in the United States. Now what?
The run up to this historic (I don’t use that word often or lightly) moment began maybe a year before the 2008 Presidential election and supplied increasingly higher drama as the election receded into the past and the first year of the Obama administration progressed. Everyone seemed to be caught up in the debates that were taking place in Washington, D.C.. Well, the legislation has passed and as President Obama said, ‘Armageddon didn’t occur, nothing fell from the sky on me, and it turned out to be a pretty nice day’. But, not all the bill’s provisions happen right away. Some of its key provisions don’t occur until 2014, for example, prohibiting excluding healthcare insurance coverage because of preexisting conditions by insurers. Others won’t kick in until 2018, coverage of preventative procedures and examinations without copayment requirements as another example. (See the Wikipedia article on the bill for a summary of the bill, http://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act .)
I expect that some time will need to pass before we’ll begin to understand what happens out there with this legislation. Yes, more people will be covered and that’s good for healthcare companies. But, as I’ve blogged before, the government and insurance companies will eventually use their enormous purchasing power to keep costs down. The conservatives’ concerns over rationing of healthcare may have some basis for these fears. After all, how many neurosurgeons are there in the country? More basic services may not be as affected but there could be some disruptions to the provision of care in the early days.
Could Patient Protection and Affordable Care Act provide a stimulus to the economy? Possibly. More facilities and care providers will be needed. The population is aging and the Baby Boomers will be around requiring care for about another forty years or so. With the funding model being worked out, there’s a reasonable chance that this will be positive for the economy. I use the U.S. Interstate Highway System proposed by President Eisenhower as an example of the indirect benefits of government legislation.
Possible winners from healthcare reform are the outsourcers. Taylor Barnes (http://taylorkbarnes.wordpress.com/home/ ) has written an interesting article for the Christian Science Monitor that is available on Yahoo! News (http://news.yahoo.com/s/csm/20100325/wl_csm/290215 ) about Indian outsourcers and the potential for new business for them. I’ll return to this particular point in the future because it’s part of the whole healthcare story that Larry and I have been following.
Likewise, we’ll be blogging and inviting others to join us as this story continues to unfold. We won’t be lacking material.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
The run up to this historic (I don’t use that word often or lightly) moment began maybe a year before the 2008 Presidential election and supplied increasingly higher drama as the election receded into the past and the first year of the Obama administration progressed. Everyone seemed to be caught up in the debates that were taking place in Washington, D.C.. Well, the legislation has passed and as President Obama said, ‘Armageddon didn’t occur, nothing fell from the sky on me, and it turned out to be a pretty nice day’. But, not all the bill’s provisions happen right away. Some of its key provisions don’t occur until 2014, for example, prohibiting excluding healthcare insurance coverage because of preexisting conditions by insurers. Others won’t kick in until 2018, coverage of preventative procedures and examinations without copayment requirements as another example. (See the Wikipedia article on the bill for a summary of the bill, http://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act .)
I expect that some time will need to pass before we’ll begin to understand what happens out there with this legislation. Yes, more people will be covered and that’s good for healthcare companies. But, as I’ve blogged before, the government and insurance companies will eventually use their enormous purchasing power to keep costs down. The conservatives’ concerns over rationing of healthcare may have some basis for these fears. After all, how many neurosurgeons are there in the country? More basic services may not be as affected but there could be some disruptions to the provision of care in the early days.
Could Patient Protection and Affordable Care Act provide a stimulus to the economy? Possibly. More facilities and care providers will be needed. The population is aging and the Baby Boomers will be around requiring care for about another forty years or so. With the funding model being worked out, there’s a reasonable chance that this will be positive for the economy. I use the U.S. Interstate Highway System proposed by President Eisenhower as an example of the indirect benefits of government legislation.
Possible winners from healthcare reform are the outsourcers. Taylor Barnes (http://taylorkbarnes.wordpress.com/home/ ) has written an interesting article for the Christian Science Monitor that is available on Yahoo! News (http://news.yahoo.com/s/csm/20100325/wl_csm/290215 ) about Indian outsourcers and the potential for new business for them. I’ll return to this particular point in the future because it’s part of the whole healthcare story that Larry and I have been following.
Likewise, we’ll be blogging and inviting others to join us as this story continues to unfold. We won’t be lacking material.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Sunday, March 21, 2010
Healthcare Reform: Endgame?
Finally. We seem to moving to closure on the seemingly unending national debate over healthcare in the U.S.. Tomorrow, Sunday, March 21, 2010, in an unusual Sunday session, the U.S. Congress will put healthcare reform to the vote. I predict that the Democrats will get the necessary votes and the legislation will pass. Then it’s over and we can all go home, right?
We may all go home but this is far from over. Let’s not forget that august body, the U.S. Senate which would still need to put its imprimatur on the proposed legislation. The Republicans are preparing a desperate, last ditch defense there that would make John Wayne’s Alamo look like a tea party (and I don't mean the one in Boston Harbor nor the current anti-Republican/Democrat Party) If the Senate can’t pass the legislation before the spring recess we could be in this state of affairs for a while longer. (Am I the only one who’s reminded of Waiting for Godot?) Various governors and state legislatures are promising to challenge the constitutionality of government mandated healthcare reform. Their positions are based on the old states’ rights arguments. (Somebody should tell those guys that those arguments didn’t work very well for the Confederacy.)
CNBC’s Patti Domm wrote a piece (http://www.cnbc.com/id/35956840 ) yesterday about the potential short term negative impact of healthcare reform on stack prices. I’m still convinced that most people still unsure about what healthcare reform means for business, especially in the life sciences sector. I’m excluding the Republicans and Tea Party members from this because they’re just opposed in general to the whole idea.
Tomorrow, we may have the unusual situation of most of the country sitting around their televisions, computers, PDA’s, whatever to follow the final debates in the Congress. I can’t wait to see the audience ratings. (Another prediction, they may rival the recent Olympics.)
After all that has gone on before now, the present moment seems somewhat anticlimactic. If the past is any guide even if the legislation passes not much may change immediately. But, changes will be put into play that combined with the law of unintended consequences will change many things. (Nobody ever thought that when Congress put through a minor piece of legislation for something called a 401k plan would become the primary financial tool for retirement planning and practically shut down employer funded pensions as generations knew them.) What will we wake up to on Monday morning if healthcare reform passes?
No one knows what the future holds for healthcare reform. I can predict passage but that’s just one person’s opinion. But, passage is just one point in time. It’s binary – yes or no. What happens after that is much more complicated and the stakes are very high. Let’s see what happens.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
We may all go home but this is far from over. Let’s not forget that august body, the U.S. Senate which would still need to put its imprimatur on the proposed legislation. The Republicans are preparing a desperate, last ditch defense there that would make John Wayne’s Alamo look like a tea party (and I don't mean the one in Boston Harbor nor the current anti-Republican/Democrat Party) If the Senate can’t pass the legislation before the spring recess we could be in this state of affairs for a while longer. (Am I the only one who’s reminded of Waiting for Godot?) Various governors and state legislatures are promising to challenge the constitutionality of government mandated healthcare reform. Their positions are based on the old states’ rights arguments. (Somebody should tell those guys that those arguments didn’t work very well for the Confederacy.)
CNBC’s Patti Domm wrote a piece (http://www.cnbc.com/id/35956840 ) yesterday about the potential short term negative impact of healthcare reform on stack prices. I’m still convinced that most people still unsure about what healthcare reform means for business, especially in the life sciences sector. I’m excluding the Republicans and Tea Party members from this because they’re just opposed in general to the whole idea.
Tomorrow, we may have the unusual situation of most of the country sitting around their televisions, computers, PDA’s, whatever to follow the final debates in the Congress. I can’t wait to see the audience ratings. (Another prediction, they may rival the recent Olympics.)
After all that has gone on before now, the present moment seems somewhat anticlimactic. If the past is any guide even if the legislation passes not much may change immediately. But, changes will be put into play that combined with the law of unintended consequences will change many things. (Nobody ever thought that when Congress put through a minor piece of legislation for something called a 401k plan would become the primary financial tool for retirement planning and practically shut down employer funded pensions as generations knew them.) What will we wake up to on Monday morning if healthcare reform passes?
No one knows what the future holds for healthcare reform. I can predict passage but that’s just one person’s opinion. But, passage is just one point in time. It’s binary – yes or no. What happens after that is much more complicated and the stakes are very high. Let’s see what happens.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Tuesday, March 16, 2010
Healthcare Reform: Watching Paint Dry
I’m fascinated by the healthcare reform debate that’s currently underway in the U.S. both inside the Houses of Congress and without. Last week, everyone in the country became experts in the arcana of the Senate’s reconciliation rules. This week, we’re all becoming familiar with President Obama’s travel schedule. Oh, and, let’s not forget the furies that have been unleashed at the health insurance providers. (I loved that move on the part of the President. A friend of mine who is a rabid opponent of healthcare reform rallied to that one. As he said, “Who doesn’t hate the health insurance companies?”)
The absence of Big Pharma from this debate is obvious. As I blogged last week, they appear to be in the President’s camp but their silence is deafening. Given all that’s at stake here I find that response, or, more accurately, lack of one, puzzling.
Maybe, just maybe, healthcare reform is not all that it’s knocked up to be for Big Pharma. The argument advanced by some (see Janet Adamy’s and Greg Hitt’s article in the Wall Street Journal, http://online.wsj.com/article/SB125590875879693189.html?mod=rss_whats_news_us ) that the drug companies will profit from all the sales to customers who couldn’t afford their wares reg Hitt, previously. That assumes Big Pharma has something to sell. This blog has noted previously the struggling new product pipelines at many drug companies. Now, the generic manufacturers may have something to crow about but I doubt their more upscale brethren will.
OK, you don’t buy the drying up pipeline argument. You say that new product development is not a straight line always headed up. You believe that research and development is a fitful, creative process with long dry spells frequently the result. I buy that. There is historical precedent. Now, let’s stop and think who’s going to be footing the bill for all this. The Federal government and the insurance companies. Am I the only one who thinks that these august institutions won’t figure out a way to squeeze volume purchase discounts from the drug companies? The drug companies are doing it to their own suppliers and even their own employees. Or, the Federal government could fall back on their old standard – price controls.
Here’s where I’m going with this. I don’t believe that healthcare reform will be beneficial to Big Pharma and other life sciences companies. Yes, more products may be sold to more people but at lower prices. Doctors will probably be second guessed over treatments. Stories have been around for years of nurses paid by health insurers second guessing physicians over treatments and medications. These practices will only continue and grow in all likelihood.
I’ve stuck my neck out now and given my position. There may be a vote on healthcare reform in the next week. If it passes, and the jury’s still out on this one, then I think we’ll see an interesting time for Big Pharma in the next several months.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
The absence of Big Pharma from this debate is obvious. As I blogged last week, they appear to be in the President’s camp but their silence is deafening. Given all that’s at stake here I find that response, or, more accurately, lack of one, puzzling.
Maybe, just maybe, healthcare reform is not all that it’s knocked up to be for Big Pharma. The argument advanced by some (see Janet Adamy’s and Greg Hitt’s article in the Wall Street Journal, http://online.wsj.com/article/SB125590875879693189.html?mod=rss_whats_news_us ) that the drug companies will profit from all the sales to customers who couldn’t afford their wares reg Hitt, previously. That assumes Big Pharma has something to sell. This blog has noted previously the struggling new product pipelines at many drug companies. Now, the generic manufacturers may have something to crow about but I doubt their more upscale brethren will.
OK, you don’t buy the drying up pipeline argument. You say that new product development is not a straight line always headed up. You believe that research and development is a fitful, creative process with long dry spells frequently the result. I buy that. There is historical precedent. Now, let’s stop and think who’s going to be footing the bill for all this. The Federal government and the insurance companies. Am I the only one who thinks that these august institutions won’t figure out a way to squeeze volume purchase discounts from the drug companies? The drug companies are doing it to their own suppliers and even their own employees. Or, the Federal government could fall back on their old standard – price controls.
Here’s where I’m going with this. I don’t believe that healthcare reform will be beneficial to Big Pharma and other life sciences companies. Yes, more products may be sold to more people but at lower prices. Doctors will probably be second guessed over treatments. Stories have been around for years of nurses paid by health insurers second guessing physicians over treatments and medications. These practices will only continue and grow in all likelihood.
I’ve stuck my neck out now and given my position. There may be a vote on healthcare reform in the next week. If it passes, and the jury’s still out on this one, then I think we’ll see an interesting time for Big Pharma in the next several months.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Sunday, March 7, 2010
Healthcare Reform: Reconciliation?
I have to admit to being a bit distracted lately in my blogging because of the recent debates over healthcare reform. (Actually, Larry’s been politely suggesting that I get back on track about Big Pharma.) Here’s my dilemma – I’m not really sure what happens next. Now, coming from someone as highly opinionated as myself this is something.
President Obama’s announcement this week that he expects the Congress to push through healthcare reform despite Republican opposition. Larry Kudlow called this a “declaration of war” on the National Review’s website (http://article.nationalreview.com/427062/one-giant-government-leap-backwards/larry-kudlow ) this week. The Democrats will probably be forced to use an arcane legislative rule called reconciliation to make this happen. The seemingly unending gridlock in Washington, D.C. may be coming to an end one way or the other. The whole country, if not the world, will be on the edge of its seat for several more weeks until this is over. And, then, then the next round begins.
What can anyone make of this? More to the point, how does Big Pharma or any of the other players in the healthcare industry plan around this? And, let’s not forget all the other problems that Big Pharma is facing – poor new product pipelines, increasing competition from generics, and more aggressive FDA enforcement.
Consensus doesn’t seem to exist on whether or not passage of healthcare reform will be good or bad for Big Pharma. While Big Pharma still seems to be in the President’s camp supporting healthcare reform, I’m still looking for a simple, cogent argument about why healthcare reform is good for Big Pharma. (If any of our readers would refer me to any such links, I’ll be forever in your debt.) Likewise, while gloom and doom prognosticators abound about the impact of healthcare reform on Big Pharma, no one seems to have a straightforward analysis of why.
Now, maybe the problem is the state of the healthcare reform legislation itself. The Senate bill is supposedly about 2,700 pages. I guess trying to sort all the possible implications is a bit daunting.
Or, maybe, just maybe, the healthcare reform debate is irrelevant to Big Pharma. Why do I say that? Not just to be provocative. (OK, OK, I do want to be provocative.) When there’s a lack of consensus, no obvious ways forward, something’s going on. Sure, healthcare reform will change many things but does it mean that the fundamentals of Big Pharma’s business will necessarily change? I’m beginning to think not.
Sure, Big Phama has many issues and challenges to deal with. But, their businesses which have grown to their current size and power by learning to respond to these. Healthcare reform may only be a distraction from the real problems which Big Pharma is facing.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
President Obama’s announcement this week that he expects the Congress to push through healthcare reform despite Republican opposition. Larry Kudlow called this a “declaration of war” on the National Review’s website (http://article.nationalreview.com/427062/one-giant-government-leap-backwards/larry-kudlow ) this week. The Democrats will probably be forced to use an arcane legislative rule called reconciliation to make this happen. The seemingly unending gridlock in Washington, D.C. may be coming to an end one way or the other. The whole country, if not the world, will be on the edge of its seat for several more weeks until this is over. And, then, then the next round begins.
What can anyone make of this? More to the point, how does Big Pharma or any of the other players in the healthcare industry plan around this? And, let’s not forget all the other problems that Big Pharma is facing – poor new product pipelines, increasing competition from generics, and more aggressive FDA enforcement.
Consensus doesn’t seem to exist on whether or not passage of healthcare reform will be good or bad for Big Pharma. While Big Pharma still seems to be in the President’s camp supporting healthcare reform, I’m still looking for a simple, cogent argument about why healthcare reform is good for Big Pharma. (If any of our readers would refer me to any such links, I’ll be forever in your debt.) Likewise, while gloom and doom prognosticators abound about the impact of healthcare reform on Big Pharma, no one seems to have a straightforward analysis of why.
Now, maybe the problem is the state of the healthcare reform legislation itself. The Senate bill is supposedly about 2,700 pages. I guess trying to sort all the possible implications is a bit daunting.
Or, maybe, just maybe, the healthcare reform debate is irrelevant to Big Pharma. Why do I say that? Not just to be provocative. (OK, OK, I do want to be provocative.) When there’s a lack of consensus, no obvious ways forward, something’s going on. Sure, healthcare reform will change many things but does it mean that the fundamentals of Big Pharma’s business will necessarily change? I’m beginning to think not.
Sure, Big Phama has many issues and challenges to deal with. But, their businesses which have grown to their current size and power by learning to respond to these. Healthcare reform may only be a distraction from the real problems which Big Pharma is facing.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Sunday, February 28, 2010
Healthcare Reform: What Did We Learn from the Healthcare Summit?
OK, President Obama trooped everybody into Blair House the other day and I don’t know what he was expecting to achieve but unless he’s a lot more cynical than he’s letting on, I don’t think he got what he wanted.
I caught some of the U.S. Healthcare Summit on the evening news and I found it worrying for three principle reasons. First, the theatricality of it all was discouraging. I lost track of the number of copies of proposed healthcare legislation that had been trucked into the conference room by the Republicans to make some point or other. (I wonder if the environmentalists will calculate how many trees were killed to make those points.) Next, the lack of seriousness by many of the participants seemed obvious to me. Yes, there were many pious sounding talking points and other sound bites but too many participants were there only to be seen in front of the cameras. Finally, the lack of any obvious solution or solutions was apparent to me. There seemed to be even a lack of agreement as to what the problem is. Overall, President Obama’s Healthcare Summit, however well intentioned, was a bust in my view.
But what did we learn from this meeting other than how not to throw one of these shindigs? Plenty, in my opinion. However, I will only focus my comments on points which I feel are relevant to the healthcare industry.
One topic that seemed to be coming out as more of an issue is the rising cost of health care itself. One commentator this week said that healthcare costs are rising at twice the annual rate of inflation. (Sorry, I didn’t record the attribution.) Healthcare insurance providers such as WellPoint justify their recent premium increases with this argument. (See http://www.nytimes.com/2010/02/25/health/policy/25health.html?sudsredirect=true ). I’ve also noticed that the media is giving more coverage to this topic as well. CNN’s Dr. Sanjay Gupta had an interesting piece yesterday where he went through the costs of the materials used in his operating room. (See http://www.cnn.com/video/#/video/health/2010/02/24/gupta.medical.cost.breakdown.cnn ). As Dr. Gupta shows, seemingly minor objects quickly become very expensive and it all adds up.
Different reasons are given for rising healthcare costs. Some cite the rising cost of malpractice insurance for doctors and hospitals. Others talk about the rising costs of research and development, in particular, the costs and time associated with getting new drugs through the FDA’s regulatory process. Like most things in life, there’s probably no one answer here. All the points noted here and many more not are going to be responsible.
As I’ve blogged recently, I believe that something more fundamental going on here with healthcare in the United States. The validity of the free market system in dealing with these issues is at stake here along with the government’s role in the lives of its citizens. I’ll be blogging more about this as we go through this year.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
I caught some of the U.S. Healthcare Summit on the evening news and I found it worrying for three principle reasons. First, the theatricality of it all was discouraging. I lost track of the number of copies of proposed healthcare legislation that had been trucked into the conference room by the Republicans to make some point or other. (I wonder if the environmentalists will calculate how many trees were killed to make those points.) Next, the lack of seriousness by many of the participants seemed obvious to me. Yes, there were many pious sounding talking points and other sound bites but too many participants were there only to be seen in front of the cameras. Finally, the lack of any obvious solution or solutions was apparent to me. There seemed to be even a lack of agreement as to what the problem is. Overall, President Obama’s Healthcare Summit, however well intentioned, was a bust in my view.
But what did we learn from this meeting other than how not to throw one of these shindigs? Plenty, in my opinion. However, I will only focus my comments on points which I feel are relevant to the healthcare industry.
One topic that seemed to be coming out as more of an issue is the rising cost of health care itself. One commentator this week said that healthcare costs are rising at twice the annual rate of inflation. (Sorry, I didn’t record the attribution.) Healthcare insurance providers such as WellPoint justify their recent premium increases with this argument. (See http://www.nytimes.com/2010/02/25/health/policy/25health.html?sudsredirect=true ). I’ve also noticed that the media is giving more coverage to this topic as well. CNN’s Dr. Sanjay Gupta had an interesting piece yesterday where he went through the costs of the materials used in his operating room. (See http://www.cnn.com/video/#/video/health/2010/02/24/gupta.medical.cost.breakdown.cnn ). As Dr. Gupta shows, seemingly minor objects quickly become very expensive and it all adds up.
Different reasons are given for rising healthcare costs. Some cite the rising cost of malpractice insurance for doctors and hospitals. Others talk about the rising costs of research and development, in particular, the costs and time associated with getting new drugs through the FDA’s regulatory process. Like most things in life, there’s probably no one answer here. All the points noted here and many more not are going to be responsible.
As I’ve blogged recently, I believe that something more fundamental going on here with healthcare in the United States. The validity of the free market system in dealing with these issues is at stake here along with the government’s role in the lives of its citizens. I’ll be blogging more about this as we go through this year.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
Sunday, February 21, 2010
Healthcare Reform: What’s Next?
I’m finding the current spate of political infighting over U.S. healthcare reform to be probably the most fascinating that I’ve ever seen. What’s more, I think that we could see fundamental changes in this country unlike any before in our history. Here’s way.
First, healthcare costs are spiraling out of control. I’m not sure why. I know that my primary care physician knows that he’s not profiting. A very competent professional in his early fifties, he claims to be making only 60% of what he expected to when he graduated from medical school. He blames rapacious health insurers. Recent health insurance increases (http://www.marketwatch.com/story/health-care-shocker-policy-premium-goes-up-69-2010-02-19?reflink=MW_news_stmp ) by some providers were justified because of healthcare costs, such as excessive testing by physicians, were rising. Some providers said that the loss of premium paying customers because of tough economic times caused them to raise the rates of their remaining ones. That kind of beggar thy neighbor (or, customers in this case) never works long term. Interestingly, on last evening’s news, one provider told a correspondent that they were running at a loss and angry about being lumped by a critical President Obama in with firms earning record profits and still increasing rates. My ignorance in this matter doesn’t bother me, I’m obviously in good company. What does bother me is the complete lack of any understanding by anyone as to what the root cause of the problem is. The resources that are consumed here won’t be available to reinvest in the economy.
Next, the growing U.S. national debt is going to limit the government’s options in addressing the problem. Check out the U.S. Debt Clock (http://www.usdebtclock.org/ ) to see some really scary numbers. A Federal government unable to afford any sort of healthcare reform, even smaller, affordable, initiatives may find itself thrown back on policy reforms only, or, even marginalized. Worse case, the U.S. standard of living could begin an irreversible decline for the first time in history.
Finally, the coming conflict between free enterprise and the public welfare as represented by a national healthcare policy. With limited resource available, the public will begin to resent for profit organizations (i.e., businesses) taking away monies which could have been used to provide healthcare services. Big Pharma will eventually have to explain why when they use volume purchasing to drive down suppliers’ profits, it’s capitalism, but, when the government tries to do it with prescription medicines it’s socialism.
So, there’s a lot going on here. Unfortunately, no silver bullet exists for this situation. I don’t believe that this is just a simple government funding debate going on here like we’re seen before. We may be seeing some fundamental changes to the American way of life coming out of this. And, the healthcare industry is going to have to figure out how to deal with this.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
First, healthcare costs are spiraling out of control. I’m not sure why. I know that my primary care physician knows that he’s not profiting. A very competent professional in his early fifties, he claims to be making only 60% of what he expected to when he graduated from medical school. He blames rapacious health insurers. Recent health insurance increases (http://www.marketwatch.com/story/health-care-shocker-policy-premium-goes-up-69-2010-02-19?reflink=MW_news_stmp ) by some providers were justified because of healthcare costs, such as excessive testing by physicians, were rising. Some providers said that the loss of premium paying customers because of tough economic times caused them to raise the rates of their remaining ones. That kind of beggar thy neighbor (or, customers in this case) never works long term. Interestingly, on last evening’s news, one provider told a correspondent that they were running at a loss and angry about being lumped by a critical President Obama in with firms earning record profits and still increasing rates. My ignorance in this matter doesn’t bother me, I’m obviously in good company. What does bother me is the complete lack of any understanding by anyone as to what the root cause of the problem is. The resources that are consumed here won’t be available to reinvest in the economy.
Next, the growing U.S. national debt is going to limit the government’s options in addressing the problem. Check out the U.S. Debt Clock (http://www.usdebtclock.org/ ) to see some really scary numbers. A Federal government unable to afford any sort of healthcare reform, even smaller, affordable, initiatives may find itself thrown back on policy reforms only, or, even marginalized. Worse case, the U.S. standard of living could begin an irreversible decline for the first time in history.
Finally, the coming conflict between free enterprise and the public welfare as represented by a national healthcare policy. With limited resource available, the public will begin to resent for profit organizations (i.e., businesses) taking away monies which could have been used to provide healthcare services. Big Pharma will eventually have to explain why when they use volume purchasing to drive down suppliers’ profits, it’s capitalism, but, when the government tries to do it with prescription medicines it’s socialism.
So, there’s a lot going on here. Unfortunately, no silver bullet exists for this situation. I don’t believe that this is just a simple government funding debate going on here like we’re seen before. We may be seeing some fundamental changes to the American way of life coming out of this. And, the healthcare industry is going to have to figure out how to deal with this.
As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
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