carey_jim

IHE: Large-Cap Pharma Continues to Blow Away the S&P 500

'Andrew Jack noted that “only one large western pharmaceutical company will be run by a scientist following completion of the current round of acquisitions.” While Jack allows that a marketing and legal background is essential to the leadership of modern-day pharmaceutical companies, he notes that this change is an “evolution” from the scientist-led leadership of the past.'

From an eagle-eye perspective, I would see this as a sign that the pharmaceutical oligopoly has entered into it's 'froth' stage and is about to be transformed (or even dismantled) by the government(s).

This is just a tea-leaf reading from a great distance of course, but it seems clear, at least from 'up here.'

Wall Street Breakfast: Must-Know News

It's always amazing to me that "the market" reacts so well to (proposed) government interventions like this.

Why does the market have so much faith in a bailout that will necessitate unprecedented spending and more taxation/borrowing from our new friends and former bitter enemies, the Chinese, and others?

I think the answer can only be that advertising, which is corporate propaganda, has become so much a part of business that markets "think" they are obliged to believe in it themselves.

Hence, as long as the market believes that something will work, it WILL work. It will work, it will work, it will work ....

And anyone who says it wont work is unAmerican.

Potential for Huge Profits Awaits Big Pharma Companies

The trouble is, almost all drug discoveries are made by scientists working in university labs or in government funded institutions such as the NIH and NCI.

Edward Kennedy's brain cancer will probably help bring to the public's attention the fact that government funding for cancer drug research (for example) has been cut back by about 90% during the last five to ten years, probably because of the expense of the Iraq War. This has shut the big Pharma drug pipeline down to a trickle even though scientists have many, many promising leads.

Big Pharma does not discover new drugs but only "brings them to market" because the government can't do this immensely difficult thing.

Cisplatin for example, which is used to treat many cancers, costs about $5000 per treatment but it can be produced at a fraction of that cost by the government (it is impossible for the government to sell Cisplatin, of course, because that would be socialism.) Many cancer patients need up to four treatments of Cisplatin which costs them or their providers (us) $20,000.

Cisplatin was discovered by a scientist, in 1971, who got a small financial payment for his discovery. The company which markets Cisplatin has had a monopoly since the early 1970's and has made hundreds of millions of dollars of profit from this one drug because it is so difficult for the government to "bring drugs to market."

This excellent "free market" model for research and development might be vulnerable, especially under a Democrat Presidency.