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Doug Miller

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  • Has Gilead Priced Sovaldi Too High? [View article]
    Hep, I think you may be right. Congress should simply pass a law making it illegal for any company to create a cure for Hep C, Hep B, HIV, cancer, or any other disease unless it sells it cheaply enough for every one who needs it to be able to afford it. Perhaps it should be required to be price equivalent to, say, generic aspirin. With that law in place, we should quickly see virtually all diseases rapidly wiped from the planet.
    Aug 5 03:34 PM | 17 Likes Like |Link to Comment
  • State Medicaids feeling the pinch from Sovaldi [View news story]
    The "analysis" by Express Scripts is either deliberately misleading, or was prepared by an incompetent staff member.

    1.) It uses the "list" price of the drug to estimate the cost
    2.) Allows nothing for the cost savings for ceasing chronic treatment for those cured and the substantial reduction of new cases to be treated. After a few years of Sovaldi, treatment costs for chronic Hep C would virtually disappear. Seems like a huge long term cost savings.
    3.) Assumes all patients would get treated in one year. Spread those costs over, say 5 years to treat all patients, and they don't look near so daunting.
    4.) Does not account for the added burden to welfare programs of supporting people too sick to work due to Hep C. (Housing, disability, food stamps, aid to dependents, etc.). These cost will largely evaporate.
    Jul 17 12:12 PM | 3 Likes Like |Link to Comment
  • A Pre-Earnings Update On Gilead [View article]
    Doc X,
    Another excellent Gilead article. Thanks. There are so many good things happening for Gilead, it is hard to keep track of them all. One that caught my eye a few months ago was the CDC's push to see Truvada adopted as a standard prophylactic treatment for those at risk of becoming HIV positive. By my calculations, if the CDC is successful, that would add $4B in annual Truvada sales in the US. If this practice were adopted in other countries, the potential would be much higher, of course. Here's a little blurb from back in May this year on the topic:
    "CDC recommends those at risk of HIV to use Gilead's Truvada • 7:31 AM
    The Centers for Disease Control & Prevention has advised that people at risk of contracting HIV - such as drug abusers and people with infected partners - should take Gilead's (GILD) Truvada preventative pill, which generated $3.1B in sales last year.
    Nearly 500,000 people are eligible to receive Truvada prescriptions, although less than 10,000 do so. The pill is usually covered by insurance, the CDC's Jonathan Mermin says.
    The organization plans to commence pilot programs in Chicago, Philadelphia, Houston and Newark to show the effectiveness of its approach."

    I read somewhere that the Truvada patent extends to 2024. (I haven't checked that for accuracy).
    Jul 10 12:20 PM | 2 Likes Like |Link to Comment
  • Gilead Sciences: Cause For Concern? [View article]
    Most of the "controversy" over the price of Sovaldi has been manufactured by the health insurance companies through their lobbying group AHIP. Take a look at the bio on the president of AHIP, Karen Ignagni. Notice her strong government background and ties. AHIP was very instrumental in seeing that the health insurance industry would see increased, rather than decreased profits as a result of Obamacare. If one were able to pull back the curtain, it is quite likely that Ignagni helped orchestrate the Waxman circus a few months back. For those interested, take a look at the AHIP website. There is a long section listing all of their propaganda pieces they were able to get entered into the media disguised as news articles or public interest pieces. (This list is aimed at their customers, health insurance companies. They are demonstrating that these companies are getting a return on their lobbying dollars)
    Jul 10 11:00 AM | 9 Likes Like |Link to Comment
  • U.S. insurers get indigestion from high drug prices [View news story]
    Midge, I am curious as to whether you felt any better after treatment? The CDC believes there are lots of baby boomers out there who have Hep C, but don't know it. Does it cause you to feel sick, or tired or anything of that sort? Or maybe you only start to feel bad after there is liver damage? (I am a BB and was also in the Army during the Vietnam War, which puts you at even higher risk (statistically). I recently asked my doctor to order up the Hep C screen, and thankfully it was negative)

    On a slightly different note, United Health Care just announced it was raising its dividend by 34%, and continuing its $8B program to buy back 10% of it's outstanding shares. No mention in the press release that they were terrified that they wouldn't be able to pay for their customer's necessary medicines.

    Actually, publicly traded companies are required to divulge (usually in a 10K filing) any situations they believe might materially damage their company. So far, despite all the noise, I don't think any US insures have filed 10Ks warning that Sovaldi might put them out of business.
    Jun 6 08:09 AM | Likes Like |Link to Comment
  • A Physician Compares Gilead's And AbbVie's Hepatitis C Products [View article]
    Doc,
    I'm not quite old enough to be on Medicare, and I'm not in the medical profession, so I haven't dealt with them at all.
    I am quoting from an article on the NPR website (link provided above). I then express an opinion concerning Medicare's stated new policy. Since I will soon be on Medicare, I find the new policy, as stated, to be more than a little disturbing. I have no reason to think I have HCV, but the mentality behind the policy could apply to other treatments as well. The idea that you would have to wait until significant liver damage showed up before you could receive treatment is surely cost based. I am not opposed to sensible cost based medical decisions (for example, I would not want extreme and futile end of life measures (for myself). I would likely not want treatment for hopeless cancer situations (for myself)). But a policy that dictates you must wait for significant liver damage before treatment?
    I didn't mention private insurers at all, and certainly didn't imply that they would be better than Medicare. But I think (according to things I've read) Medicare policy tends to set the trend for private insurers. And this sort of policy would certainly provide "cover" for private insurers to follow suit. Express Scripts CMO has already been making statements about excluding Sovaldi from their formulary.
    May 21 10:42 AM | Likes Like |Link to Comment
  • U.S. insurers get indigestion from high drug prices [View news story]
    Seeking Alpha has the transcript of Gilead's most recent investor conference presentation posted and available to read. (I believe it was a UBS Healthcare conference).

    In the conference, Gilead explained that they have priced Sovaldi at a discount to the current cost of a cure. (Forget per pill, or per bottle price. How much does it cost to produce a cure?). They went through the cost of the current drug regimen (which must be maintained over a much longer period) and compared that cost to the cost of a Sovaldi based regimen.

    I was also surprised to hear that many folks taking Sovaldi are combining it with interferon (according to Gilead). Sovaldi, by itself, is not sufficient. The folks who are being treated with Sovaldi + Olysio are the ones getting the best treatment. But, it runs around $150K, because Olysio is also quite expensive.

    Wait until this fall when Gilead rolls out the single pill cure, which won't require anything else, and will have few side effects. I would expect that will be when the real avalanche of folks, who are not too sick, but would like to be cured, to start lining up for treatment.

    The insurers also seem to be making the assumption that the other treatments under development will be at least as good as Gilead's. I have read some things that call that assumption into question. We will have to wait and see.
    May 21 07:56 AM | 8 Likes Like |Link to Comment
  • A Physician Compares Gilead's And AbbVie's Hepatitis C Products [View article]
    It is interesting to watch Medicare trying to cope with this new reality in the treatment of HCV. (Notice how they haven't thought ahead on this at all. You would think, by their response, that they just heard of Sovaldi yesterday).

    Here is a link to a story on NPR the other day about a 65 year old man with HCV, would could not get approval through Medicare for Sovaldi treatment:

    http://n.pr/1njfU2F

    A Medicare spokesperson actually responded to the story with this (read the linked to story for the whole thing):

    "The policy is trying to catch up with reality," the CMS spokesman said, asking not to be identified by name." .....

    "This policy change would pay for treatment with a combination of new, expensive drugs for patients who haven't responded to older treatment regimens and are approaching or have cirrhosis of the liver."

    Notice how incredibly sad the "policy catch up to reality" is. After trying drugs that may or may not work, and have brutal side effects, and after your liver is trashed, then we'll approve you for the drugs that actually work.
    May 20 09:55 AM | 1 Like Like |Link to Comment
  • CDC recommends those at risk of HIV to use Gilead's Truvada [View news story]
    Yoiks! If the CDC could persuade those other 490,000 folks to take this daily pill, which has very slight side effects, we could be looking at another $4.4B in annual sales for Gilead. (Retail cost is $18K/yr. I am making the assumption that the PBMs are getting a 50% discount).
    May 15 08:14 AM | 1 Like Like |Link to Comment
  • A Physician Compares Gilead's And AbbVie's Hepatitis C Products [View article]
    Concerning the idea of wiping out Hep C in a manner similar to small pox: wouldn't there need to be a vaccine available to accomplish this? Some of the main modes of transmission are going to be repetitive behaviors ... some one is cured, but quickly reinfected.
    May 12 11:28 AM | Likes Like |Link to Comment
  • SEC reportedly probing brokers over HFT [View news story]
    Thanks! I have read the book and was aware of that bit. I think it demonstrates the tendency all regulatory agencies have to start to identify with and become captive to the industry they are supposed to be regulating.
    My opinion is that the SEC should be taking Lewis' claims seriously, and according to his book there are three areas that bear scrutiny: First and foremost are the exchanges themselves. Secondly, the big wall street banks that are operating the "dark pools". And, finally, the brokerages.
    Lewis is not overly optimistic that even well intentioned efforts by the SEC will permanently stop market participants from finding ways to game the system. Recall his history of front running in the US, and how the various regulatory efforts often stopped one activity, but opened the door for another.
    There has certainly been a full court media biltz by the HFT outfits, Wall Street banks, and even the SEC (Mary Jo) to discredit Lewis' claims. Many, many talking heads and pundits of every stripe (most of whom haven't even read Lewis' book) are simply serving as parrots to repeat the criticisms of those who are benefiting from this trading activity. (And, according to Lewis, the brokers, exchanges and banks are all getting a cut of the action).
    There is no doubt that participation in the stock market has become much easier and less expensive for small investors over the past 20 years. However, it seems clear that something unseemly is going on here. Even if they are only skimming a few pennies from each trade, the SEC's job is to, at least try, to address the issue.
    May 8 10:11 AM | Likes Like |Link to Comment
  • SEC reportedly probing brokers over HFT [View news story]
    Interesting, given that the head of the SEC, Mary Jo White, has very publicly lambasted Lewis and his book, telling all us little investors that we should be down on our knees thanking God for HFTs. (You may recall that Mary Jo, as the Federal prosecutor in charge of the prosecution of the first World Trade center bombers, played down any calls to look at that as more than an isolated criminal action).

    Maybe it is a good thing that the SEC is getting some investigatory direction from somewhere. Perhaps they should also be taking a look at the exchanges and the Wall Street bank's "dark pools".
    May 7 11:11 AM | 2 Likes Like |Link to Comment
  • Express Scripts: Just What The Doctor Ordered [View article]
    I have owned ESRX for a couple of years now, and agree with you on the profitability of this company. However, I wouldn't get all weepy on how wonderful they are, especially if you happen to be in a health plan that uses them to manage your pharmacy benefit. The first point you make: "Evaluating a variety of drugs to see how effective they are at treating conditions relative to price and relative to alternatives." would be better stated as "They take the prescribing decision out of the hands of your doctor, and dictate what medicines you will be allowed to use based on how that particular medicine impacts ESRX's FCF". This list of profit approved medicines is codified in something referred to as a "formulary". So, for example, if your doctor believes you would do better on statin A rather than statin B, C, or D, you will either pay for statin A yourself, or settle for a medicine your doctor does not think will be as effective. (The other PBM's with ESRX's business model do the same thing.)
    I also own Catamaran, which hasn't done as well of late, but I believe is also a good buy at this point.
    So, from an investor perspective, good companies. From a patient perspective, not so much.
    Apr 29 03:09 PM | 7 Likes Like |Link to Comment
  • Gilead: X-Marks The Spot For Sovaldi Sales [View article]
    Dr. Paul, I have a question about treatment guidelines. Is there a consensus of expert medical opinion that asymptomatic Hep C infected folks should be treated? In my uneducated poking around, I have seen what appears to be disagreement on the subject. For example, here is an excerpt from the USPSTF guidelines on screening for Hep C (they recommend all BB'ers be screened):

    "In the past few years, diagnosis and treatment of hepatitis C infection has greatly improved. This makes it more valuable to identify
    the infection so that a person can start treatment, if necessary. Not everyone who is infected with the hepatitis C virus needs
    immediate treatment. Many people without signs of liver damage can be monitored and treated only if the virus becomes active."

    This was published June, 2013. I know these aren't treatment guidelines, but I've got to wonder, given that we now have an easily tolerated treatment, if there are still medical experts who believe treatment is not necessary without signs of liver disease?

    Another excellent article, by the way.

    Doug
    Apr 24 01:56 PM | Likes Like |Link to Comment
  • The Adaptive Genius Of Rigged Markets [View article]
    Warren Buffet may not moan about HFTs in interviews, but he has taken action to cut off one source of their trading edge. He (well, Berk) owns Business Wire and he recently put a stop to the practice of selling advance access to Business Wire releases to HFT firms. That cut into BW's profits, so apparently he felt strongly about it. Also, it's pretty rare for Buffet to step in and meddle in the businesses he acquires, another indicator of how he feels about this. Just because we know we will never make the markets completely "fair", doesn't mean we should stop trying. Same goes for society in general.
    Apr 22 09:14 AM | 3 Likes Like |Link to Comment
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