Pharmaceuticals - Political pressure

RECENT NEWS
Reuters  Nov 16  Comment 
The election of Donald Trump as the next U.S. president could signal a period of heightened pressure on the Federal Reserve to change its accommodative stance, Barclays Chief Executive Jes Staley told a banking conference on Wednesday.
Wall Street Journal  Nov 9  Comment 
Donald Trump’s electoral victory could usher in a level of political pressure on the Federal Reserve not seen in decades.
MarketWatch  Nov 7  Comment 
Hillary Clinton backers are newly confident in her chances for victory; Newt Gingrich says FBI Director James Comey caved under political pressure; the election is shaping up to be the most wagered-upon political event ever; and more.
The Economist  Oct 30  Comment 
MARK Carney, the governor of the Bank of England, has upset many people in the Conservative party because of his warnings about the economic impact of Brexit. So some including former chancellor Lord Lawson and Daniel Hannan, a eurosceptic MEP,...
Forbes  Oct 12  Comment 
Diverse populations, political pressure, high financial risk – designing a pension system has its challenges and Peter A. Diamond considered all these obstacles in his analysis of welfare programs.
guardian.co.uk  Oct 3  Comment 
Government MPs have prepared questions for the big four that will pull focus from the hot topics the opposition wants to pursue The heads of Australia’s big four banks will appear before a parliamentary committee in Canberra this week, starting...
Reuters  Sep 29  Comment 
Wells Fargo & Co's Chief Executive John Stumpf returns to Capitol Hill on Thursday with his job still under threat and the bank facing rising political pressure over a sales scandal that has become a major issue in Washington and on Wall Street.
New York Times  Sep 12  Comment 
Her campaign, responding to political pressure after it belatedly revealed that she had pneumonia, promised more details about her health and medical records this week.
MarketWatch  Sep 6  Comment 
Kansas City Fed President Esther George will tell Congress Wednesday she is worried that changing the governance structure of the U.S. central bank will make it more distant from Main Street, according to the Wall Street Journal. George will...
New York Times  Sep 2  Comment 
Her open door for refugees has led to a strong electoral challenge from the far right at home and is complicating her efforts to forge a response to Britain’s decision to leave the E.U.




 
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.

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki