KEY TAKEAWAY: Wells Fargo on pharma: “We get the impression that many in the industry and many investors do not see the trouble brewing. We worry that some may be living in a bubble, a cozy patent-protected, high margin bubble.”
Big pharma has received over $6 billion in tax cuts and that’s just half of the top pharma companies. In addition the pharma, big ten has over half a trillion dollars in profits stashed over shore. Normally the taxes on those profits would be $133 billion, but under the GOP tax plan they will pay less than half of that. Not one company is using the money from the tax cuts to lower drug prices either. So tell me again how pharma is patient centric?
High drug prices are the result of the approach the United States has taken to granting government-protected monopolies to drug manufacturers, combined with coverage requirements imposed on government-funded drug benefits. But they are also the result of drug company CEO’s who have put Wall Street first.
Pharma’s lobbying voice, PhRMA, keeps using social media to talk about patient stories, but can anyone really believe them? They have even attacked the 340B program which is meant to get drugs to those who can’t afford them.
The cost of health care has risen much faster than inflation alone can explain. Healthcare spending in 2007 came to $7,700 per person in the U.S., and by 2015 that number had risen 29% to $9,990 per person. The Centers for Medicare and Medicaid Services project that health spending will continue to increase at an average rate of 5.6% per year for the next 10 years.
As Bob Herman recently noted “the one part of health care that multiple people at a financial conference said is that pharma needs to change:
When the bubble does burst you’re going to see a knife approach to pharma. Cuts will be made in all area’s including people, but the CEO’s will continue to take home their huge paychecks as they suck up to The Street.
Trouble is coming, but pharma, it seems, refuses to see the train speeding down the tracks.
Originally published at worldofdtcmarketing.com on May 4, 2018.