Pharmaceuticals - Political pressure

RECENT NEWS
New York Times  May 27  Comment 
Prime Minister Nawaz Sharif is in London preparing for the operation on Tuesday as he faces political pressure at home about his family’s wealth.
The Australian  May 27  Comment 
Documents and interviews reveal an investigation severely restricted by political pressure and lack of transparency.
MarketWatch  May 26  Comment 
Investigations ordered by Malaysia’s leader into graft allegations at a state-development fund have been undermined by political pressure and a lack of transparency, according to documents and interviews with people involved.
Wall Street Journal  May 8  Comment 
Central banks are turning record profits, bolstered by income from their bulging asset and loan portfolios and, more recently, from charging banks for making deposits. But as their balance sheets grow, political pressures on central banks are...
The Australian  May 5  Comment 
The government has bowed to political pressure over one of the most efficient ways of operating the proposed airport.
Reuters  Apr 18  Comment 
* Regulatory, political pressure on Isabel dos Santos (Updates with analyst comment, background)
The Economic Times  Apr 15  Comment 
It further said that the officers responsible in the HR departments should be made accountable for such a system to be in place.
Yahoo  Apr 7  Comment 
Donald Trump says the Federal Reserve has stoked asset bubbles and backs a congressional review of its decisions. Bernie Sanders also wants to "audit" the Fed to make it less beholden to Wall Street. Such voices from the 2016 presidential campaign...
TechCrunch  Mar 30  Comment 
 Technology companies have faced years’ worth of criticism for being behind the times in dealing with political pressure. Unlike other, more old-line industries that saw regulations, taxing and spending policy and government contracts as...
Financial Times  Feb 3  Comment 
Many economists see political pressure as a cause for concern




 
TOP CONTRIBUTORS

Prescription drug prices are often brought up in debates about the U.S. health care system as a whole. Many claim that pharmaceutical companies overcharge for their prescription drugs, making quality healthcare too expensive for some to afford. Drug companies cite the high costs of drug development as the reason for high end-user prices. They also often decry the length of patent protection, saying that they have to recoup all the money spent on development within a relatively limited period of time, forcing them to charge higher prices. Nonetheless, there is growing political pressure to lower prescription drug prices and relax the restrictions on generic drug production, despite pharmaceutical companies' warnings that this could slow or hinder the development of life-saving drugs.

An example of this political pressure is the recent bill passed by the House of Representatives aimed at lowering prescription drug costs for Medicare recipients. The bill repealed a previous provision that prevented the Secretary of Health and Human Services from negotiating with drug companies on behalf of Medicare recipients. Instead, the new bill requires that the Secretary conduct such price negotiations. This is aimed at lowering costs for Americans enrolled in Medicare prescription drug plans, though it would save the government money as well.

US Federal Reserve chairman Ben Bernanke warned of rising health costs and the effect it may have on the government budget. Lower income households would be the hardest hit because they depend the most on government help.[1]

Companies that benefit from increased regulation of pharmaceuticals

Health insurance companies

Companies hurt by increased regulation of pharmaceuticals

Pharmaceutical companies

The drug development process is costly and time-consuming, taking an average of $800 million and several years to develop just one commercially viable drug. Pharmaceutical companies cite these as reasons why they're forced to charge seemingly exorbitant prices for their products. If political pressure were to lead to increased regulation of drug prices or a relaxing of rules governing generics, large pharmaceutical companies would be negatively impacted.

Among the biggest issues facing the industry is the meaningful decline in the pace of new drug introductions combined with the pending patent expiration of some of the highest revenue producing drugs in the industry. Merck is likely to lose 25% of its revenue to patent expiration over the next 3 years, drugs like Vasotec, Prinivil, Pepsid, and Prilosec. Pfizer faces the patent expiration of Lipitor, it's $13 billion blockbuster, in 2011. Patented drugs are coming off patent faster than new drugs are being patented. This is steadily eroding the profitability of the industry as price per pill declines dramatically upon the introduction of generic competition, and operating margins move into the single digits. Firms are reacting with cuts in R&D and Sales Expenses, and are finding growth through acquisition and the economies of scale of size. The largest firms are moving toward a model that recognizes their core strength as distribution while innovation is purchased on the outside.

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