Pharmaceuticals - Political pressure

RECENT NEWS
FierceBiotech  Oct 3  Comment 
Specialty drugmaker Salix Pharmaceuticals is backing out of a $2.7 billion deal that would have given it an Irish domicile--and thus a lower tax rate--in the first victory for U.S. leaders working to discourage such transactions.
FiercePharma  Sep 4  Comment 
Many a U.S. drugmaker has pounced on an opportunity to pick up a foreign company, haul overseas and reap the tax rewards. But while rumors this summer said Illinois-based Hospira would be jumping on the tax-inversion bandwagon, its deal isn't...
MarketWatch  Aug 27  Comment 
People are beginning to realize that with Congress paralyzed and a president who is disengaged, the Fed is the only Washington institution that can help them, writes Darrell Delamaide.
BBC News  Aug 21  Comment 
MPs demand details from Chancellor about possible political pressure over failed Co-op plan to buy 623 Lloyds branches.
guardian.co.uk  Aug 6  Comment 
After intense political pressure, Walgreens decides to stay in Chicago, rather than take advantage of Alliance Boots' domicile in Switzerland The US drugstore chain Walgreens has abandoned plans to shift its headquarters to Europe as part of its...
Forbes  Aug 6  Comment 
Bowing to potential consumer and U.S. government backlash amid intense political pressure from the White House and its powerful hometown Chicago Congressional leadership, Walgreen (WAG) this morning said its takeover of European retailer Alliance...
Wall Street Journal  Aug 5  Comment 
Walgreen Co. has decided not to relocate its corporate headquarters, people familiar with the matter said, amid complications in pulling off the transaction and a backdrop of heavy political pressure from Washington to end the controversial...
BusinessWeek  Jul 25  Comment 
A union campaign to organize workers at a security company uses political pressure on a famous client
Financial Times  Jul 22  Comment 
The European Commission will take a decision on what to do in September, but meanwhile political pressure is mounting in Europe
Forbes  Jul 14  Comment 
Despite mounting political pressure in the U.S., drug maker AbbVie appears on the verge of convincing Dublin-based Shire PLC to consider a sweetened offer of nearly $54 billion for the Irish pharmaceutical company.




 
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