Less than a week to Election Day. I’m going to stick my neck out, Larry loves it when I do, and predict that it’s going to be Obama. Not exactly good for McCain, but, he only has himself to blame. He neglected to notice that the Cold War was over. But, there will be bad news for others, such as Big Pharma. (OK, there probably would have been bad news even if McCain won.)
Earlier, I had written about how neither of the two candidates would be good for the drug industry. I wasn’t the only who thought so. In fact, I recently came across an opinion article in the online edition of The Wall Street Journal , WSJ.com - Opinion: How Obama Would Stifle Drug Innovation, by a Dr. Scott Gottlieb outlining how Obama’s policies could curtail drug research.
Dr. Gottlieb presents the proposition that in order to pay for affordable medical care for younger people, Obama would have to introduce controls over newer, more effective drugs for diseases such as cancer. While I agree with him that the next administration will attempt to rein in drug prices, I’m a little skeptical about a new front opening up in the ongoing generational conflict.
I do subscribe to the argument that preventative healthcare can lead to reductions in the incidence of diseases such as diabetes. We’ve been told for years that not smoking reduces the likelihood of lung cancer and emphysema. Reduce or eliminate the illness and you eliminate the need for expensive treatments. Funding improved healthcare for younger people can avoid more expensive solutions later on. Not to mention the improved quality of life for those concerned. To say nothing of the improvements to the American landscape afforded by a major reduction in obesity.
I also have reservations about the idea that drug companies should charge whatever the market will bear for their drugs. If tomorrow someone discovers a cure for AIDS, does anyone really think that they would be permitted to charge whatever they wanted? Third world countries have already been breaking drug patents when they felt that public need outweighed the profit motive. Precedent exists for this. Defense contractors have been limited to “fair” profits for their products in time of war.
The success rates for new drugs mentioned by Dr. Gottlieb seem to suggest that the current model of private funding may have outlived its usefulness. Great risks require great rewards. I think that I’ve already shown that great rewards are going the way of the dodo bird. If government funding can split the atom, send a man to the moon, and, maybe, just maybe, avert another Great Depression, then finding a cure for cancer may not be beyond the realm of possibility.
Whatever happens after Obama wins next week, Big Pharma’s days of unchallenged domination of drug development are numbered. In fact, they may devolve into generic manufacturers of products developed by government research programs.
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
Friday, October 31, 2008
Monday, August 18, 2008
Is this the time we all predicted....Transformation of the Pharmaceutical Biotechnology Industry?
Is this the time we all predicted....Transformation of the Pharmaceutical Biotechnology Industry?
Can the Services Industry be of help?
It is fairly obvious to those of us who are involved with the Bio-Pharmaceutical Industry that things could not stay as is. The industry is suffering with a multiplicity of challenges including but not limited to:
1.With dry (or near dry) pipelines despite massive spend on R&D.
2.Negative productivity gain from additional sales force additions (interestingly enough this could be a salvation as the industry consolidates and/or continues buying pipelines or licensing deals from biotech companies).
3.Massive governmental pressure on pricing and a hyper-vigilante, highly politically charged FDA making new drug approvals difficult, costly and lengthy.
4.Significant reductions in value for both Pharmaceuticals and to an extent Biotechnology companies that are traded on the stock exchanges.
5.Throw in for good measure that generic drugs now represent somewhere over 60% of all volume of prescriptions while accounting for under 20% of dollar spend and that there is a concurrent consolidation in that business.
Is this not the making of the perfect storm and is it possible that the service providers can help the industry in this regard?
One doesn't need to look much further than the business press to recognize the enormous change taking place, just look at these 5 deals that have taken place or will that are in aggregate way over $100 billion:
1.Roche wanting to buy the remaining share it doesn't own in Genentech
2.BMS bidding to buy what it doesn't own of Imclone
3.Pfizer's multiple Biotech purchases
4.Takeda's takeover for Millenium
5.AstraZeneca's purchase of Medimmune
There are several other interesting consolidations that are taking place within generics as well:
1.Teva of Israel buying IVAX (US) and now Barr (US)
2.Daichii Sankyo of Japan buying Ranbaxy of India
3.Novartis's earlier adding EON Labs (US) and Hexcel (Germany)
My thinking is that we are rapidly seeing consolidations on at least two concurrent fronts-and both are global:
1.Large pharmaceutical companies paying high premiums to acquire a combination of soon to be commercially attractive pipelines and/or complimentary product lines to add to their existing therapeutic areas.
2.Companies of various size forcing a major global consolidation in the generic space. This becomes a most interesting aspect of the equation as more and more drugs go off patent over the next few years and pricing and reimbursement pressures mount.
3.What about the next targets—it's easy to speculate about Amgen, Genzyme, Biogen-Idec and Gilead as the big fish here—but what about those big pharmas such as Merck and ScheringPlough potentially getting together and what that could mean?
Since part of our target audience are service providers to the industry, the question/challenge I pose is-what can you do to help?
As always your comments are welcome at larryrothmansblog@gmail.com
Can the Services Industry be of help?
It is fairly obvious to those of us who are involved with the Bio-Pharmaceutical Industry that things could not stay as is. The industry is suffering with a multiplicity of challenges including but not limited to:
1.With dry (or near dry) pipelines despite massive spend on R&D.
2.Negative productivity gain from additional sales force additions (interestingly enough this could be a salvation as the industry consolidates and/or continues buying pipelines or licensing deals from biotech companies).
3.Massive governmental pressure on pricing and a hyper-vigilante, highly politically charged FDA making new drug approvals difficult, costly and lengthy.
4.Significant reductions in value for both Pharmaceuticals and to an extent Biotechnology companies that are traded on the stock exchanges.
5.Throw in for good measure that generic drugs now represent somewhere over 60% of all volume of prescriptions while accounting for under 20% of dollar spend and that there is a concurrent consolidation in that business.
Is this not the making of the perfect storm and is it possible that the service providers can help the industry in this regard?
One doesn't need to look much further than the business press to recognize the enormous change taking place, just look at these 5 deals that have taken place or will that are in aggregate way over $100 billion:
1.Roche wanting to buy the remaining share it doesn't own in Genentech
2.BMS bidding to buy what it doesn't own of Imclone
3.Pfizer's multiple Biotech purchases
4.Takeda's takeover for Millenium
5.AstraZeneca's purchase of Medimmune
There are several other interesting consolidations that are taking place within generics as well:
1.Teva of Israel buying IVAX (US) and now Barr (US)
2.Daichii Sankyo of Japan buying Ranbaxy of India
3.Novartis's earlier adding EON Labs (US) and Hexcel (Germany)
My thinking is that we are rapidly seeing consolidations on at least two concurrent fronts-and both are global:
1.Large pharmaceutical companies paying high premiums to acquire a combination of soon to be commercially attractive pipelines and/or complimentary product lines to add to their existing therapeutic areas.
2.Companies of various size forcing a major global consolidation in the generic space. This becomes a most interesting aspect of the equation as more and more drugs go off patent over the next few years and pricing and reimbursement pressures mount.
3.What about the next targets—it's easy to speculate about Amgen, Genzyme, Biogen-Idec and Gilead as the big fish here—but what about those big pharmas such as Merck and ScheringPlough potentially getting together and what that could mean?
Since part of our target audience are service providers to the industry, the question/challenge I pose is-what can you do to help?
As always your comments are welcome at larryrothmansblog@gmail.com
Tuesday, August 12, 2008
Follow-up with Ken Kam (Part 2)
This blog is the second in a series following up with Ken Kam of Marketocracy (www.marketocracy.com). Larry and I had talked with him last month about the drug industry and Elan Corporation PLC, currently conducting clinical trials on a drug, Tysabri, which could be used in the treatment of multiple sclerosis and Alzheimer’s disease, in particular. Ken predicted a bright future for Elan. Then came two pieces of bad news and Elan’s price came down 60% from its recent high. In my last blog, Ken explained what had happened and gave us his opinions. Today, he will talk about Elan’s future prospects and another pharmaceutical opportunity.
Ken Kam’s fund, Marketocracy Masters 100 Fund (MOFQX), has continued to accumulate Elan shares despite the 60% sell off. He says that a two year investment horizon is needed. By then the Phase 3 clinical trial data for Tysabri will be out and the Phase 2 data will be analyzed and fully appreciated. (See my last blog for Ken’s position on Tysabri’s Phase 2 clinical trial results.) According to Ken, analysts have a short term impact on a stock’s price, long term, it’s the multiple sclerosis patients taking the drug that affect the price.
While admitting to the risks arising from PML with use of the drug, Ken believes that it is still well below expectations and when caught early is survivable. People will have to become comfortable with its risk though. He notes that it is rare to have a new class of drug that has such a big effect on a disease that a lot of people have.
Ken was shocked at the market reaction but feels that it is a Wall Street reaction and not a real world one. In particular, Ken feels that the accusations of data mining and lying that were thrown at Elan in recent weeks were totally unfounded.
Ken’s expectations are that Elan will have to play out to the end of the Phase 3 clinical trials for optimal valuation. Meanwhile, Elan is a good valuation and could be a takeover target. Ken thinks the investment community is presently looking at the valuation differences and measuring them. He is unsure about what to hope for, a takeover bid or letting it run out.
Our opinion is that Wyeth has surely got to be interested in Elan at this price level and diminished market cap as the risk-reward levels are extremely attractive. While considered a takeover play itself, Biogen Idec may also find Elan an attractive takeover target as well.
In wrapping up, we asked Ken what other opportunities did he see in the pharmaceutical sector. He replied that he liked Novo Nordisk and their new diabetes program which is in Phase 3 clinical trials. Ken also noted that Wall Street often gets clinical trial data wrong and this is what creates the opportunities in the market.
As always, Larry and I found Ken Kam’s opinions and views interesting and a little contrarian. We’ll stay in touch with him and, again, would like to thank for taking the time to meet with us.
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
Ken Kam’s fund, Marketocracy Masters 100 Fund (MOFQX), has continued to accumulate Elan shares despite the 60% sell off. He says that a two year investment horizon is needed. By then the Phase 3 clinical trial data for Tysabri will be out and the Phase 2 data will be analyzed and fully appreciated. (See my last blog for Ken’s position on Tysabri’s Phase 2 clinical trial results.) According to Ken, analysts have a short term impact on a stock’s price, long term, it’s the multiple sclerosis patients taking the drug that affect the price.
While admitting to the risks arising from PML with use of the drug, Ken believes that it is still well below expectations and when caught early is survivable. People will have to become comfortable with its risk though. He notes that it is rare to have a new class of drug that has such a big effect on a disease that a lot of people have.
Ken was shocked at the market reaction but feels that it is a Wall Street reaction and not a real world one. In particular, Ken feels that the accusations of data mining and lying that were thrown at Elan in recent weeks were totally unfounded.
Ken’s expectations are that Elan will have to play out to the end of the Phase 3 clinical trials for optimal valuation. Meanwhile, Elan is a good valuation and could be a takeover target. Ken thinks the investment community is presently looking at the valuation differences and measuring them. He is unsure about what to hope for, a takeover bid or letting it run out.
Our opinion is that Wyeth has surely got to be interested in Elan at this price level and diminished market cap as the risk-reward levels are extremely attractive. While considered a takeover play itself, Biogen Idec may also find Elan an attractive takeover target as well.
In wrapping up, we asked Ken what other opportunities did he see in the pharmaceutical sector. He replied that he liked Novo Nordisk and their new diabetes program which is in Phase 3 clinical trials. Ken also noted that Wall Street often gets clinical trial data wrong and this is what creates the opportunities in the market.
As always, Larry and I found Ken Kam’s opinions and views interesting and a little contrarian. We’ll stay in touch with him and, again, would like to thank for taking the time to meet with us.
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, August 10, 2008
Follow-up Interview with Ken Kam (Part 1)
Last month, Larry and I had the opportunity to interview Ken Kam of Marketocracy (www.marketocracy.com) about the drug industry and Elan Corporation PLC, currently conducting clinical trials on a drug, Tysabri, which could be used in the treatment of multiple sclerosis and Alzheimer’s disease, in particular. Ken predicted a bright future for Elan. Then came two pieces of bad news and Elan’s price came down 60% from its recent high.
Larry and I wanted to follow up with Ken and talk about what happened and what he thinks about Elan’s future. Ken graciously made himself available for us recently and what follows is a summary of our conversation.
When we asked Ken what happened, he replied that these things happen when a company’s value is tied up in clinical trial data, because a lot of investors react to just the headline He feels that when the dust settles people will have a different view when they look at the data. The confidence level for the trial results was at 92% instead of the expected 95%. But, despite trial data showing drug safety and being very close to efficacy at the top level, the stock began moving downward. That was the first piece of bad news. Then came the second.
An announcement came out later indicating that twelve cases of vascular edema and three deaths. As Ken put it, although the three deaths were unrelated to the trial and the cases of vascular edema were safely resolved, unexpected deaths and complications are never good when associated with clinical trial results. (Although, recently neither Ken nor Larry could retrieve that news item.) However, Ken feels that CNBC got the story right in Mike Huckman’s broadcast where he differentiated between those trial participants who had the gene for the disease and those who didn’t. The results for both groups would obviously be different which Huckman got but the market didn’t follow his lead. As the bad news was coming from a medical conference, Ken said, it is very important and can really drive the stock. And, in this case, a lot of people piled on. In addition, there were two cases of PML from the users of Tysabri in Europe. Although it looks like both patients will survive, one is already home from the hospital, PML can be deadly.
Ken went on to say that investors need to look past the headlines and get into the specifics to understand what’s going on. Analysts can be off the mark with knee jerk reactions. It takes a long time for a drug to build a reputation. In Ken’s opinion, Bapineuzumab warrants going to Phase 3 clinical trials. Phase 2 trials are to determine safety and how to dose. Phase 3 results are the ones that really count.
Ken told us that 14,000 patients have been taking Tysabri for over a year. 30,000 patients are now currently taking the drug. He believes that Tysabri is more effective than any other drug on the market for treating multiple sclerosis. His opinion is based on his review of the clinical trial results as well as from members of his online investment community at www.marketocracy.com.
I’m stopping here for now. I’ll continue our interview with Ken Kam in my next blog which will be posted in two days. In it, Ken will talk about his opinions on Elan’s future and another opportunity in the pharmaceutical sector.
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
Larry and I wanted to follow up with Ken and talk about what happened and what he thinks about Elan’s future. Ken graciously made himself available for us recently and what follows is a summary of our conversation.
When we asked Ken what happened, he replied that these things happen when a company’s value is tied up in clinical trial data, because a lot of investors react to just the headline He feels that when the dust settles people will have a different view when they look at the data. The confidence level for the trial results was at 92% instead of the expected 95%. But, despite trial data showing drug safety and being very close to efficacy at the top level, the stock began moving downward. That was the first piece of bad news. Then came the second.
An announcement came out later indicating that twelve cases of vascular edema and three deaths. As Ken put it, although the three deaths were unrelated to the trial and the cases of vascular edema were safely resolved, unexpected deaths and complications are never good when associated with clinical trial results. (Although, recently neither Ken nor Larry could retrieve that news item.) However, Ken feels that CNBC got the story right in Mike Huckman’s broadcast where he differentiated between those trial participants who had the gene for the disease and those who didn’t. The results for both groups would obviously be different which Huckman got but the market didn’t follow his lead. As the bad news was coming from a medical conference, Ken said, it is very important and can really drive the stock. And, in this case, a lot of people piled on. In addition, there were two cases of PML from the users of Tysabri in Europe. Although it looks like both patients will survive, one is already home from the hospital, PML can be deadly.
Ken went on to say that investors need to look past the headlines and get into the specifics to understand what’s going on. Analysts can be off the mark with knee jerk reactions. It takes a long time for a drug to build a reputation. In Ken’s opinion, Bapineuzumab warrants going to Phase 3 clinical trials. Phase 2 trials are to determine safety and how to dose. Phase 3 results are the ones that really count.
Ken told us that 14,000 patients have been taking Tysabri for over a year. 30,000 patients are now currently taking the drug. He believes that Tysabri is more effective than any other drug on the market for treating multiple sclerosis. His opinion is based on his review of the clinical trial results as well as from members of his online investment community at www.marketocracy.com.
I’m stopping here for now. I’ll continue our interview with Ken Kam in my next blog which will be posted in two days. In it, Ken will talk about his opinions on Elan’s future and another opportunity in the pharmaceutical sector.
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, August 5, 2008
Comment about Post on the Economy
Larry I think you're right on with the assessment... and I'd predict start-ups will be in the integration of technology, information and services. Take the cocreation that is happening with the iPhone 3G where folks can create applications for the device and have them 'posted' at Google for public consumption. I think we're at the cusp of a period of high invention as computing power is not a barrier to solving problems.... sometimes real-time for businesses and individuals. I want my iPhone to tell me when to replace my toothbrush 90 days after I open the wrapper --- naturally when I'm in a food store near the toothbrush aisle.
Greg Poorten,
Greg Poorten,
Monday, August 4, 2008
State of the Economy
Normally, I don’t write much about the economy in general. But, recently, Larry was forwarded a link to the ADP National Employment Report®. We read the report and came away with a few observations.
While there wasn’t any specific information concerning the pharmaceutical industry, we noticed a couple of things that may be of potential impact. First, US employment declined by 65,000 positions in the month of July in the goods-producing sector where we figure the pharmaceutical industry is located. Certainly there have been numerous reports of continuing layoffs, restructurings and consolidations within the industry we follow which may reflect the macroeconomics cited in this study. The report goes on to say that the sectors hardest hit were those affected by recent difficulties experienced by the mortgage markets. (Do I have a knack for understatement or what?) So, even allowing for the mortgage mess, large employer payrolls still seem to struggling. Second, employment in small businesses defined as those with under fifty (50) employees actually increased by 50,000 during the same period, July.
Here’s what Larry and I came away with. We suspect that outsourcing and offshoring are continuing to eat away at jobs in the types of large companies defined by this study. Next, the growth in small businesses could be a resurgence in the type of small start-up’s which has fueled the start of growth in sectors as varied as technology and biotech in the past. Admittedly, Larry and I are going on a limb here but since we have over a half century of business experience between us, we don’t think that we’re too far off the mark. We hope to interview one of the economic advisers behind this study and test our ideas. Please keep an eye out for future updates on this blog.
The study itself can be found at http://www.adpemploymentreport.com/.
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
Friday, July 18, 2008
Insights from a Top Five Star Fund Manager on Drug Pipelines (Part III)
Recently, Larry and I met with an interesting person, Ken Kam. Ken manages the Masters 100 Fund (MOFQX) and is a Morningstar Five Star fund manager. He has been regularly beating the S&P 500 Composite Stock Price index. Ken believes that his approach to investments using virtual portfolios to derive real investment decisions will be the wave of the future. Ken’s approach can be checked out at www.marketocracy.com. Earlier in his career, he had managed a technology and healthcare fund and had also run a medical devices company. During our meeting, we learned about his current holdings and what he thinks about the future of the pharmaceutical industry. This is the third and final of three blogs based on that interview.
This is my third and final blog based on a meeting that Larry and I had with Ken Kam, the fund manager of the Marketocracy’s Masters 100 Fund (MOFQX). In my two earlier blogs, I reviewed Ken’s thinking on the current and future prospects for Elan Corporation PLC. When Ken began talking about the future of Elan, he was touching on some of the current issues in the drug industry. That’s when Larry and I started to ask him questions about the industry in general and its future prospects.
Ken said that the industry will respond as in the past but that it can’t shortcut research. The old hit or miss approach to drug research is dead. More specifics will be required. Ken says that Genomics will drive much change and that new drugs will have a Genomics element. Large drug companies will have to find early stage drug research and then purchase it.
When looking to make future investment decisions, Ken says that he considers two stages. First, the beginning when the drug is unknown and it’s not known yet whether it will work. It’s tough to invest until the clinical trials are done. Next, once the trials are successful, it’s the basic blocking and tackling to run the business that counts. He cites Amgen as an example of a company that had been here with its drug Epogen but had to bring in a partner that had a sales force with preexisting relationships with doctors. Ken says that it’s hard to get into doctors’ offices with only one product. But, it can be done as Amgen and Genentech have demonstrated.
Ken thinks that Elan may get there. Also, Ken notes that manufacturing drugs is tough, there aren’t that many people who know how to do it, and even the big players get it wrong once in a while. Start-up’s only have scientists and this second stage is equally as important as the first. Hot IPO markets sometimes let start up’s fund these activities. Other times, it’s the big companies that provide the funding. Ken thinks that we’re in these later times right now. Also, what the business model looks like becomes a factor in making an investment decision. Outsourcing services and support to gain a cost advantage become important considerations.
Both Larry and I enjoyed our meeting with Ken Kam and we would like to take this opportunity to thank him and his team for arranging this opportunity for us.
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
This is my third and final blog based on a meeting that Larry and I had with Ken Kam, the fund manager of the Marketocracy’s Masters 100 Fund (MOFQX). In my two earlier blogs, I reviewed Ken’s thinking on the current and future prospects for Elan Corporation PLC. When Ken began talking about the future of Elan, he was touching on some of the current issues in the drug industry. That’s when Larry and I started to ask him questions about the industry in general and its future prospects.
Ken said that the industry will respond as in the past but that it can’t shortcut research. The old hit or miss approach to drug research is dead. More specifics will be required. Ken says that Genomics will drive much change and that new drugs will have a Genomics element. Large drug companies will have to find early stage drug research and then purchase it.
When looking to make future investment decisions, Ken says that he considers two stages. First, the beginning when the drug is unknown and it’s not known yet whether it will work. It’s tough to invest until the clinical trials are done. Next, once the trials are successful, it’s the basic blocking and tackling to run the business that counts. He cites Amgen as an example of a company that had been here with its drug Epogen but had to bring in a partner that had a sales force with preexisting relationships with doctors. Ken says that it’s hard to get into doctors’ offices with only one product. But, it can be done as Amgen and Genentech have demonstrated.
Ken thinks that Elan may get there. Also, Ken notes that manufacturing drugs is tough, there aren’t that many people who know how to do it, and even the big players get it wrong once in a while. Start-up’s only have scientists and this second stage is equally as important as the first. Hot IPO markets sometimes let start up’s fund these activities. Other times, it’s the big companies that provide the funding. Ken thinks that we’re in these later times right now. Also, what the business model looks like becomes a factor in making an investment decision. Outsourcing services and support to gain a cost advantage become important considerations.
Both Larry and I enjoyed our meeting with Ken Kam and we would like to take this opportunity to thank him and his team for arranging this opportunity for us.
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
Wednesday, July 16, 2008
Insights from a Top Five Star Fund Manager on Drug Pipelines (Part II)
Recently, Larry and I met with an interesting person, Ken Kam. Ken manages the Masters 100 Fund (MOFQX) and is a Morningstar Five Star fund manager. He has been regularly beating the S&P 500 Composite Stock Price index. Ken believes that his approach to investments using virtual portfolios to derive real investment decisions will be the wave of the future. Ken’s approach can be checked out at www.marketocracy.com. Earlier in his career, he had managed a technology and healthcare fund and had also run a medical devices company. During our meeting, we learned about his current holdings and what he thinks about the future of the pharmaceutical industry. This is the second of three blogs based on that interview.
In my last blog, I introduced Ken Kam, the fund manager of the Marketocracy’s Masters 100 Fund (MOFQX) and reviewed his position in Elan Corporation PLC, his thoughts on its drug, Tysabri,(Bapinuezumab) and its current prospects. In this entry, I will go over Ken’s future prospects for Elan and Tysabri.
Since taking his first in Elan in June 2005, the stock has doubled several times. Ken thinks that it could double again. Larry and I queried him about this and he gave us his reasons. First, Elan is conducting trials for Tysabri for use with Alzheimer’s disease. Unlike the multiple sclerosis space where Tysabri has three other competitive drugs to go against there are no others in the Alzheimer’s space to contend with. For this reason alone, Ken thinks Elan could double. He likes the Alzheimer’s story and thinks that it could make Elan another Amgen.
Next, Ken is taking a longer view on Elan. It possesses nanocrystal technology which allows the manufacture of nano-sized versions of existing drugs. This increases the surface area of the drug permitting a more effective dosage with reduced side effects. This is fundamental technology that can be applied to many other drugs, that are coming off patent. Other companies would have to do the research to see of their drugs were effective. Elan could either acquire other drugs coming off patent and make nano-sized versions or license the technology to the other drug manufacturers. Manufacturers with drugs coming off patent are looking at ways to make their drugs more effective. Nanocrystal technology offers the chance to extend a patent for another ten years Ken explained to us. This is what Ken sees as the future pipeline for Elan and explains his optimistic future for the company.
In my next and final blog based on Larry’s and my meeting with Ken Kam, I’ll write about Ken’s thoughts on the drug industry and its 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
In my last blog, I introduced Ken Kam, the fund manager of the Marketocracy’s Masters 100 Fund (MOFQX) and reviewed his position in Elan Corporation PLC, his thoughts on its drug, Tysabri,(Bapinuezumab) and its current prospects. In this entry, I will go over Ken’s future prospects for Elan and Tysabri.
Since taking his first in Elan in June 2005, the stock has doubled several times. Ken thinks that it could double again. Larry and I queried him about this and he gave us his reasons. First, Elan is conducting trials for Tysabri for use with Alzheimer’s disease. Unlike the multiple sclerosis space where Tysabri has three other competitive drugs to go against there are no others in the Alzheimer’s space to contend with. For this reason alone, Ken thinks Elan could double. He likes the Alzheimer’s story and thinks that it could make Elan another Amgen.
Next, Ken is taking a longer view on Elan. It possesses nanocrystal technology which allows the manufacture of nano-sized versions of existing drugs. This increases the surface area of the drug permitting a more effective dosage with reduced side effects. This is fundamental technology that can be applied to many other drugs, that are coming off patent. Other companies would have to do the research to see of their drugs were effective. Elan could either acquire other drugs coming off patent and make nano-sized versions or license the technology to the other drug manufacturers. Manufacturers with drugs coming off patent are looking at ways to make their drugs more effective. Nanocrystal technology offers the chance to extend a patent for another ten years Ken explained to us. This is what Ken sees as the future pipeline for Elan and explains his optimistic future for the company.
In my next and final blog based on Larry’s and my meeting with Ken Kam, I’ll write about Ken’s thoughts on the drug industry and its 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
Monday, July 14, 2008
Insights from a Top Five Star Fund Manager on Drug Pipelines (Part I)
Recently, Larry and I met with an interesting person, Ken Kam. Ken manages the Masters 100 Fund (MOFQX) and is a Morningstar Five Star fund manager. He has been regularly beating the S&P 500 Composite Stock Price index. Ken believes that his approach to investments using virtual portfolios to derive real investment decisions will be the wave of the future. Ken’s approach can be checked out at www.marketocracy.com. Earlier in his career, he had managed a technology and healthcare fund and had also run a medical devices company. During our meeting, we learned about his current holdings and what he thinks about the future of the pharmaceutical industry. This is the first of three blogs based on that interview.
Ken Kam manages the Marketocracy Masters 100 Fund (MOFQX) that has a Morningstar Five Star for three year returns. The fund’s objective is to seek capital appreciation in common stocks of domestic and foreign companies of any size, seeking to outperform the S&P 500 Composite Stock Price index. What brought Larry and I to meet with Ken was his position in Elan Corporation PLC. Elan has been conducting clinical trials on a drug, bapineuzumab, for Alzheimers patients, and they currently market Tysabri, to treat multiple sclerosis. Elan represents the largest holding of MOFQX at about 9½ % of its entire portfolio. What had brought Elan to Ken’s attention was two of the virtual portfolio managers who use his website (www.marketocracy.com). In March 2005, these two virtual fund managers made Elan 25% of their test portfolios. They were betting their long term track records on this stock. (One had been running cash at 22% of his portfolio, a fairly conservative position.) In addition, 1,500 of 80,000 virtual investors at www.marketocracy.com had Elan in their portfolios. Elan’s clinical trials on their drug, Tysabri, for use with multiple sclerosis had been proving successful. However, because of a one in one thousand chance of a fatality, the FDA had ordered the drug withdrawn.
Ken decided to do more research on the drug. What separates Ken from other stock researchers is his use of the Internet. He e-mailed 1,500 people on the Internet to solicit their feedback. Approximately five hundred responded of whom, one hundred were MS patients and some had been participants in Tysabri’s clinical trials. All were waiting for their insurance companies to approve the drug for use despite the risk of fatality. Ken’s research approach took him in a different direction from other Wall Street analysts who normally talk with the neurologists. Being doctors, they reply that there isn’t information yet to give an opinion.
With this research behind him, Ken took his initial position two months after Elan first came to his attention. Since then the stock has doubled several times after the FDA ban was lifted and Ken is hopeful for the future.
Several things caught my attention during our meeting. First, the use of the Internet to bring together virtual investors to develop stock picks. Next, Ken’s use of the Internet to take advantage of his in depth understanding of clinical trials to conduct original patient research on Tysabri’s effectiveness. In the next several blogs, I will write about what Ken thinks about Elan’s future pipeline and the drug industry in general.
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
Ken Kam manages the Marketocracy Masters 100 Fund (MOFQX) that has a Morningstar Five Star for three year returns. The fund’s objective is to seek capital appreciation in common stocks of domestic and foreign companies of any size, seeking to outperform the S&P 500 Composite Stock Price index. What brought Larry and I to meet with Ken was his position in Elan Corporation PLC. Elan has been conducting clinical trials on a drug, bapineuzumab, for Alzheimers patients, and they currently market Tysabri, to treat multiple sclerosis. Elan represents the largest holding of MOFQX at about 9½ % of its entire portfolio. What had brought Elan to Ken’s attention was two of the virtual portfolio managers who use his website (www.marketocracy.com). In March 2005, these two virtual fund managers made Elan 25% of their test portfolios. They were betting their long term track records on this stock. (One had been running cash at 22% of his portfolio, a fairly conservative position.) In addition, 1,500 of 80,000 virtual investors at www.marketocracy.com had Elan in their portfolios. Elan’s clinical trials on their drug, Tysabri, for use with multiple sclerosis had been proving successful. However, because of a one in one thousand chance of a fatality, the FDA had ordered the drug withdrawn.
Ken decided to do more research on the drug. What separates Ken from other stock researchers is his use of the Internet. He e-mailed 1,500 people on the Internet to solicit their feedback. Approximately five hundred responded of whom, one hundred were MS patients and some had been participants in Tysabri’s clinical trials. All were waiting for their insurance companies to approve the drug for use despite the risk of fatality. Ken’s research approach took him in a different direction from other Wall Street analysts who normally talk with the neurologists. Being doctors, they reply that there isn’t information yet to give an opinion.
With this research behind him, Ken took his initial position two months after Elan first came to his attention. Since then the stock has doubled several times after the FDA ban was lifted and Ken is hopeful for the future.
Several things caught my attention during our meeting. First, the use of the Internet to bring together virtual investors to develop stock picks. Next, Ken’s use of the Internet to take advantage of his in depth understanding of clinical trials to conduct original patient research on Tysabri’s effectiveness. In the next several blogs, I will write about what Ken thinks about Elan’s future pipeline and the drug industry in general.
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
Thursday, July 10, 2008
FDA Hurdles May Provide a Win-Win Opportunity for Industry and Its Service Providers
A most interesting discussion was just posted on The Motley Fool (http://www.fool.com/index.htm?ref=Yo), primarily aimed at amateur investors, but nevertheless, in my opinion highly relevant to some of the major challenges being confronted by the Pharmaceutical Industry. As the services industry serving the Pharmaceutical and Bio-Pharmaceutical sectors is part of our target readership, it strikes me that here is an area of win-win opportunity for both the industry and its service partners. To my thinking it may be a time for some “out of the box” rethinking about both the process and testing procedures in drug development. While this is an area that has been well plowed in the past, with lots of time, money and energy expended, this may well be the impetus for some new thinking. Your opinions are welcomed at larryrothmansblog@gmail.com.
To give you some detailed background, here is the text from The Motely Fool article:
"The most headache-inducing aspect of investing in the pharmaceutical sector is that the rules and requirements to bring a new drug onto market can change dramatically in a blink of the eye.
Last week, the FDA convened a meeting that likely will spell longer and larger clinical trials, and tougher approval hurdles, for future diabetes treatments. Any investor considering shares of drug makers with such compounds in late-stage testing, like MannKind (Nasdaq: MNKD), Eli Lilly (NYSE: LLY), or Sanofi-Aventis (NYSE: SNY) should take notice.
What's at stake?:
With $24 billion in worldwide sales last year, compounds to treat type 1 and type 2 diabetes are one of the top therapeutic classes of drugs, according to IMS Health. This figure will only grow, since the number of diabetics in the U.S. and worldwide is expected to soar to almost unfathomable levels in the coming years.
Diabetes compounds are many drug makers' most important drugs, and there are many such candidates in the pipeline. Here is how the sales of diabetes compounds for most of the market's top players fared last year:
Company Selected diabetes drug sales Selected diabetes drug sales growth
Eli Lilly $3.2 billion 9.3%
GlaxoSmithKline $2.4 billion (22)%*
Merck $754 million N/A**
Novo Nordisk $5.5 billion*** 9%*
Sanofi-Aventis $3.3 billion 14.5%*
*As reported.
** Januvia approved in late 2006.
***At at a krona-to-dollar exchange rate of 0.18.
If you strip out Glaxo's performance, nearly every large-cap pharma's diabetes-care units are growing rapidly.
Avandia adversity:
Glaxo's problems began last year, owing to safety concerns with its type 2 diabetes treatment Avandia. A New England Journal of Medicine article looking at a pooled set of data from Avandia studies showed that patients taking the drug may be at a higher risk of some heart-related ailments. Since diabetes drugs are supposed to reduce a patient's incidence of many long-term adverse events, these potential Avandia safety issues pushed the FDA to ask an advisory panel to debate whether new diabetes drugs should be subjected to much more testing for long-term and hard-to-see adverse events.
What's changing:
While the FDA often seems like a mercurial beast, approving and rejecting drugs at random, the agency does issue concrete guidelines on what drug candidates for the most common therapeutic categories, like cancer and diabetes, must demonstrate in clinical testing in order to win marketing approval.
In the case of new type 2 diabetes drugs (the most common type), the FDA generally requires drug makers to prove that their compound helps to lower a patient's blood sugar levels, and that the compound is tested in "at least" 2,500 patients in phase 3 studies. More than half of these patients must take the drug for one year or more, and 300 to 500 of these patients must take the drug at least 18 months.
Unfortunately for drug makers, testing a drug for cardiovascular-related safety issues, like whether it increases a patient's risk of a heart attack, usually requires several thousand more patients in clinical testing, not to mention longer clinical studies than even the above guidelines call for.
Therefore, if the FDA wants to spot more instances of rare adverse events, it needs to up the patient numbers and study length requirements for new diabetes drugs. That's where last week's advisory panel came in.
To help avoid another potential Avandia-type instance, the advisory panel recommended in a 14-2 vote that the FDA should require long-term safety studies of at least five years for all new potential diabetes drugs.
Fortunately, the advisory panel also threw drug makers a small bone. It recommended that the FDA require that these long-term studies (which will take longer than five years to complete under nearly any circumstance, accounting for the time it takes to set up the study and complete patient enrollment) simply be under way, not completed, when a new diabetes drug is up for approval. Had the panel recommended otherwise, it could have spelled disaster for most drug makers' pipelines.
Who is affected?
It's easiest to say that every potential diabetes treatment in development will be affected by the new guidelines, if the FDA adopts the panel's recommendations in their current form. These new guidelines could definitely cost many drug makers hundreds of millions of dollars more in clinical trial expenses.
The guidelines will also likely be the kiss of death for any diabetes drug that shows even small hints of cardiovascular-related side effects in clinical testing, unless it's also finished the sort of long-term safety study the FDA now demands. (The agency is understandably harder on compounds with potential safety issues than on those with no apparent risks.)
Like all things at the FDA, the agency is sure to treat some compounds in development differently, depending on a range of variables. Compounds from some classes of diabetes treatments, such as thiazolidinediones (Avandia's class of drug), where safety issues have been a problem in the past, will likely have these new guidelines applied more harshly. Some new and unproven classes of diabetes treatments under development from companies like Bristol-Myers Squibb (NYSE: BMY) could also face a harder path to FDA approval.
Companies with potential blockbuster drugs already deep into (or past) phase 3 testing could suffer most, though. Potential new diabetes drugs that these guidelines might hurt (or, in a few rare cases, help) include: CV Therapeutics' (Nasdaq: CVTX) Ranexa, scheduled for a July 27 PDUFA. Sanofi's Acomplia, for which the company hoped to file an FDA marketing application next year. It has a huge safety study under way, but the study covers only three years. Novo Nordisk's promising GLP-1 analogue liraglutide, currently under FDA review.
Changes to the FDA guidelines won't entirely quash the development of new diabetes drug candidates. But in many cases, they will raise the regulatory hurdles that new potential therapies must overcome to get approved, while making even approved diabetes and pre-diabetes drug candidates less profitable. Some less promising treatments will also likely have their testing discontinued, if drug makers don't see a large enough potential market for them. Stricter safety testing may ultimately benefit patients, but for now, it seems like bad news for everyone else."
What do you think-how do we solve this problem???
To give you some detailed background, here is the text from The Motely Fool article:
"The most headache-inducing aspect of investing in the pharmaceutical sector is that the rules and requirements to bring a new drug onto market can change dramatically in a blink of the eye.
Last week, the FDA convened a meeting that likely will spell longer and larger clinical trials, and tougher approval hurdles, for future diabetes treatments. Any investor considering shares of drug makers with such compounds in late-stage testing, like MannKind (Nasdaq: MNKD), Eli Lilly (NYSE: LLY), or Sanofi-Aventis (NYSE: SNY) should take notice.
What's at stake?:
With $24 billion in worldwide sales last year, compounds to treat type 1 and type 2 diabetes are one of the top therapeutic classes of drugs, according to IMS Health. This figure will only grow, since the number of diabetics in the U.S. and worldwide is expected to soar to almost unfathomable levels in the coming years.
Diabetes compounds are many drug makers' most important drugs, and there are many such candidates in the pipeline. Here is how the sales of diabetes compounds for most of the market's top players fared last year:
Company Selected diabetes drug sales Selected diabetes drug sales growth
Eli Lilly $3.2 billion 9.3%
GlaxoSmithKline $2.4 billion (22)%*
Merck $754 million N/A**
Novo Nordisk $5.5 billion*** 9%*
Sanofi-Aventis $3.3 billion 14.5%*
*As reported.
** Januvia approved in late 2006.
***At at a krona-to-dollar exchange rate of 0.18.
If you strip out Glaxo's performance, nearly every large-cap pharma's diabetes-care units are growing rapidly.
Avandia adversity:
Glaxo's problems began last year, owing to safety concerns with its type 2 diabetes treatment Avandia. A New England Journal of Medicine article looking at a pooled set of data from Avandia studies showed that patients taking the drug may be at a higher risk of some heart-related ailments. Since diabetes drugs are supposed to reduce a patient's incidence of many long-term adverse events, these potential Avandia safety issues pushed the FDA to ask an advisory panel to debate whether new diabetes drugs should be subjected to much more testing for long-term and hard-to-see adverse events.
What's changing:
While the FDA often seems like a mercurial beast, approving and rejecting drugs at random, the agency does issue concrete guidelines on what drug candidates for the most common therapeutic categories, like cancer and diabetes, must demonstrate in clinical testing in order to win marketing approval.
In the case of new type 2 diabetes drugs (the most common type), the FDA generally requires drug makers to prove that their compound helps to lower a patient's blood sugar levels, and that the compound is tested in "at least" 2,500 patients in phase 3 studies. More than half of these patients must take the drug for one year or more, and 300 to 500 of these patients must take the drug at least 18 months.
Unfortunately for drug makers, testing a drug for cardiovascular-related safety issues, like whether it increases a patient's risk of a heart attack, usually requires several thousand more patients in clinical testing, not to mention longer clinical studies than even the above guidelines call for.
Therefore, if the FDA wants to spot more instances of rare adverse events, it needs to up the patient numbers and study length requirements for new diabetes drugs. That's where last week's advisory panel came in.
To help avoid another potential Avandia-type instance, the advisory panel recommended in a 14-2 vote that the FDA should require long-term safety studies of at least five years for all new potential diabetes drugs.
Fortunately, the advisory panel also threw drug makers a small bone. It recommended that the FDA require that these long-term studies (which will take longer than five years to complete under nearly any circumstance, accounting for the time it takes to set up the study and complete patient enrollment) simply be under way, not completed, when a new diabetes drug is up for approval. Had the panel recommended otherwise, it could have spelled disaster for most drug makers' pipelines.
Who is affected?
It's easiest to say that every potential diabetes treatment in development will be affected by the new guidelines, if the FDA adopts the panel's recommendations in their current form. These new guidelines could definitely cost many drug makers hundreds of millions of dollars more in clinical trial expenses.
The guidelines will also likely be the kiss of death for any diabetes drug that shows even small hints of cardiovascular-related side effects in clinical testing, unless it's also finished the sort of long-term safety study the FDA now demands. (The agency is understandably harder on compounds with potential safety issues than on those with no apparent risks.)
Like all things at the FDA, the agency is sure to treat some compounds in development differently, depending on a range of variables. Compounds from some classes of diabetes treatments, such as thiazolidinediones (Avandia's class of drug), where safety issues have been a problem in the past, will likely have these new guidelines applied more harshly. Some new and unproven classes of diabetes treatments under development from companies like Bristol-Myers Squibb (NYSE: BMY) could also face a harder path to FDA approval.
Companies with potential blockbuster drugs already deep into (or past) phase 3 testing could suffer most, though. Potential new diabetes drugs that these guidelines might hurt (or, in a few rare cases, help) include: CV Therapeutics' (Nasdaq: CVTX) Ranexa, scheduled for a July 27 PDUFA. Sanofi's Acomplia, for which the company hoped to file an FDA marketing application next year. It has a huge safety study under way, but the study covers only three years. Novo Nordisk's promising GLP-1 analogue liraglutide, currently under FDA review.
Changes to the FDA guidelines won't entirely quash the development of new diabetes drug candidates. But in many cases, they will raise the regulatory hurdles that new potential therapies must overcome to get approved, while making even approved diabetes and pre-diabetes drug candidates less profitable. Some less promising treatments will also likely have their testing discontinued, if drug makers don't see a large enough potential market for them. Stricter safety testing may ultimately benefit patients, but for now, it seems like bad news for everyone else."
What do you think-how do we solve this problem???
Friday, June 27, 2008
Who is the Best Presidential Candidate for the Pharmaceutical-Life Sciences Industry-McCain or Obama?--Thoughts as the Summer Begins
We had discussed earlier whom would be the “best” presidential candidate for the Pharmaceutical-Life Sciences industry. With Obama and McCain as the presumptive candidates this Fall, we thought it useful to give our opinion on who would make more sense for our industry. Unfortunately, based on the rhetoric and their stated ;positions, we are dealing with the proverbial Hobson's choice.
Recently CNBC (http://www.cnbc.com/id/25370649/) noted that “both Barack Obama and John McCain promise substantial changes if they win. In fact, their agendas will likely affect a wide range of companies from Alcoa to Zygo Corp. But the companies that get hit hardest are probably in health care. Why? Both candidates promise a prescription for Uncle Sam's ailing health care system. McCain may allow foreign imports of drugs while Obama could allow Medicare to negotiate prices with the likes of Pfizer and Merck. That move could cost the industry $30 billion.”
One measure of how the industry feels is to look at their Political Action Committee (PAC) contribution—basically voting with their money. In a recent article, Bloomberg Business (http://www.bloomberg.com/apps/news?pid=20601087&sid=anDWekGuCW8E&refer=worldwide) talked about both candidates vis a vis the industry as follows: “Pharmaceutical industry employees and PACs contributed $516,839 to Bush in 2004, compared with $280,688 for Kerry, according to the Washington-based Center for Responsive Politics. This time around, they gave $339,729 to Obama, $262,870 to Clinton and only $74,850 to McCain through March.” They go on to say that McCain is
no friend of the industry: ``McCain has not characterized himself as a friend of the industry,'' said Dan Mendelson, president of Avalere Health LLC, a Washington research company. During a Jan. 5 debate in New Hampshire, McCain criticized the drug companies for high prices charged to the government's Medicare and Medicaid programs and said he backed importing cheaper drugs from Canada, a position also held by his Democratic opponents.” His position on re-importation has not softened and is the single policy point listed on his website:
“CHEAPER DRUGS: Lowering Drug Prices. John McCain will look to bring greater competition to our drug markets through safe re-importation of drugs and faster introduction of generic drugs.”
(Source: http://www.johnmccain.com/Informing/Issues/19ba2f1c-c03f-4ac2-8cd5-5cf2edb527cf.htm)
Bloomberg Business goes on further to quote: ``How could pharmaceutical companies be able to cover up the cost to the point where nobody knows? Why shouldn't we be able to re-import drugs from Canada?'' McCain asked. One of his former opponents, former Massachusetts Governor Mitt Romney, interjected, telling McCain not to paint drug companies as ``big bad guys.'' ``Well, they are,'' McCain responded.
If the above seems challenging, consider Barack Obama's positions (Source: http://www.barackobama.com/issues/health care/):
“Lower prescription drug costs. The second-fastest growing type of health expenses is prescription drugs. Pharmaceutical companies are selling the exact same drugs in Europe and Canada but charging Americans more than double the price. Obama will allow Americans to buy their medicines from other developed countries if the drugs are safe and prices are lower outside the U.S. Obama will also repeal the ban that prevents the government from negotiating with drug companies, which could result in savings as high as $30 billion. Finally, Obama will work to increase the use of generic drugs in Medicare, Medicaid, and FEHBP and prohibit big name drug companies from keeping generics out of markets.”
On the potential more positive front, “Obama strongly supports investments in biomedical research, as well as medical education and training in health-related fields, because it provides the foundation for new therapies and diagnostics. Obama has been a champion of research in cancer, mental health, health disparities, global health, women and children's health, and veterans' health. As president, Obama will strengthen funding for biomedical research, and better improve the efficiency of that research by improving coordination both within government and across government/private/non-profit partnerships. An Obama administration will ensure that we translate scientific progress into improved approaches to disease prevention, early detection and therapy that is available for all Americans.”
So there are “the facts” as we know them, what is clear is that if either candidate has their way, the Pharmaceutical industry can add even greater political pressure especially on pricing to its list of worry and challenges. By the narrowest of margins, we come down on the side of Obama—his approach to the industry seem a bit (very small bit) more balanced, he seems to recognize the need for R&D and to a degree the rewards that go with that success, he is more likely to extend health care coverage to a wider group of Americans and provide broader prescription coverage despite pricing pressure. What is clear to me is that one should not base their voting preference based on either candidates view on the industry.
Recently CNBC (http://www.cnbc.com/id/25370649/) noted that “both Barack Obama and John McCain promise substantial changes if they win. In fact, their agendas will likely affect a wide range of companies from Alcoa to Zygo Corp. But the companies that get hit hardest are probably in health care. Why? Both candidates promise a prescription for Uncle Sam's ailing health care system. McCain may allow foreign imports of drugs while Obama could allow Medicare to negotiate prices with the likes of Pfizer and Merck. That move could cost the industry $30 billion.”
One measure of how the industry feels is to look at their Political Action Committee (PAC) contribution—basically voting with their money. In a recent article, Bloomberg Business (http://www.bloomberg.com/apps/news?pid=20601087&sid=anDWekGuCW8E&refer=worldwide) talked about both candidates vis a vis the industry as follows: “Pharmaceutical industry employees and PACs contributed $516,839 to Bush in 2004, compared with $280,688 for Kerry, according to the Washington-based Center for Responsive Politics. This time around, they gave $339,729 to Obama, $262,870 to Clinton and only $74,850 to McCain through March.” They go on to say that McCain is
no friend of the industry: ``McCain has not characterized himself as a friend of the industry,'' said Dan Mendelson, president of Avalere Health LLC, a Washington research company. During a Jan. 5 debate in New Hampshire, McCain criticized the drug companies for high prices charged to the government's Medicare and Medicaid programs and said he backed importing cheaper drugs from Canada, a position also held by his Democratic opponents.” His position on re-importation has not softened and is the single policy point listed on his website:
“CHEAPER DRUGS: Lowering Drug Prices. John McCain will look to bring greater competition to our drug markets through safe re-importation of drugs and faster introduction of generic drugs.”
(Source: http://www.johnmccain.com/Informing/Issues/19ba2f1c-c03f-4ac2-8cd5-5cf2edb527cf.htm)
Bloomberg Business goes on further to quote: ``How could pharmaceutical companies be able to cover up the cost to the point where nobody knows? Why shouldn't we be able to re-import drugs from Canada?'' McCain asked. One of his former opponents, former Massachusetts Governor Mitt Romney, interjected, telling McCain not to paint drug companies as ``big bad guys.'' ``Well, they are,'' McCain responded.
If the above seems challenging, consider Barack Obama's positions (Source: http://www.barackobama.com/issues/health care/):
“Lower prescription drug costs. The second-fastest growing type of health expenses is prescription drugs. Pharmaceutical companies are selling the exact same drugs in Europe and Canada but charging Americans more than double the price. Obama will allow Americans to buy their medicines from other developed countries if the drugs are safe and prices are lower outside the U.S. Obama will also repeal the ban that prevents the government from negotiating with drug companies, which could result in savings as high as $30 billion. Finally, Obama will work to increase the use of generic drugs in Medicare, Medicaid, and FEHBP and prohibit big name drug companies from keeping generics out of markets.”
On the potential more positive front, “Obama strongly supports investments in biomedical research, as well as medical education and training in health-related fields, because it provides the foundation for new therapies and diagnostics. Obama has been a champion of research in cancer, mental health, health disparities, global health, women and children's health, and veterans' health. As president, Obama will strengthen funding for biomedical research, and better improve the efficiency of that research by improving coordination both within government and across government/private/non-profit partnerships. An Obama administration will ensure that we translate scientific progress into improved approaches to disease prevention, early detection and therapy that is available for all Americans.”
So there are “the facts” as we know them, what is clear is that if either candidate has their way, the Pharmaceutical industry can add even greater political pressure especially on pricing to its list of worry and challenges. By the narrowest of margins, we come down on the side of Obama—his approach to the industry seem a bit (very small bit) more balanced, he seems to recognize the need for R&D and to a degree the rewards that go with that success, he is more likely to extend health care coverage to a wider group of Americans and provide broader prescription coverage despite pricing pressure. What is clear to me is that one should not base their voting preference based on either candidates view on the industry.
Wednesday, June 25, 2008
An Interesting New Product
Occasionally, I receive word of a new product that catches my interest and I like to pass it along to my readers. I avoid the large, global product releases because everybody writes about them and even if they didn’t, enough money gets spent promoting them that half the Universe has probably been bombarded with information about them. So when, I received a copy of Spellex’s press release about their new medical and pharmaceutical spelling dictionaries, I was, to say the least, intrigued. While I love Microsoft’s spell check features, let’s face it, when you get too technical, too quickly, you outpace its abilities without too much difficulty. Now, Larry occasionally teases me, no, let me call it what it is, he roasts me by saying that my submissions have been limited by my ability to spell some of the words used in the life sciences sector. This is not true at all, however, trudging around the Web looking for the correct spelling does sometimes temper my enthusiasm for a topic. Spellex’s products give their users the ability to quickly get this information and for an additional fee there is an update service. They cover hundreds of thousands of words, including acronyms, Latin and Greek terms. OK, these guys are nothing if not thorough. I have received no compensation to write this blog entry and I haven’t used the product myself. But, I have not let things like that stop me from having an opinion. The products can be checked out at www.spellex.com and the site is definitely worth a visit if spelling is one of your weak points.
Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.
Contributed by Guy de Lastin
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