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Joy125
Posted Sunday, September 06, 2009 2:37 AM


 

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http://www.healthbeatblog.com/2009/08/who-is-making-the-biggest-profits-from-us-healthcare-you-might-be-surprised-.html

AN EXCERPT FROM MAGGIE MAHAR'S HEALTH BEAT

August 27, 2009

Who Is Making the Biggest Profits From U.S. Healthcare? You Might Be Surprised . . .

(Maggie Mahar discusses Rick Newman's recent article in the U.S. News & World Report -- an excerpt follows below)

. . . “Pharmaceutical companies have a profit margin of 16.4 percent,” Newman reports, “seventh highest of the 215 industries that Morningstar tracks.”

This is why I’m skeptical when drug-makers say that they couldn’t possibly afford to lower prices on drugs—or that if they did, they wouldn’t be able to do research. The fact is that if drug-makers, and their shareholders, could be satisfied with margins of, say 8% or 9% they could, in fact, slice prices. And since roughly 16 percent of the $2.6 trillion that we spend on healthcare goes to the pharmaceutical industry, we are talking about significant savings. (Commentators frequently say that drugs account for “just” 10% to 11% of the nation’s total health care bill. But that’s because they are only looking at the dollars you and I spend, retail, buying prescription drugs in a pharmacy. When you add in the cost of drugs administered in a hospital, a nursing home, or in a doctor’s office --plus the cost of the many medical devices that drug-makers now sell—you find that their share of the $2.6 trillion pie rises to 16%. And if anything, those devices—ranging from stents to artificial knees—are even more over-priced than the drugs.)

Prescription-drug makers are not the only companies turning a nice profit on our health care, other industries with profit margins well above the 2.2 percent median for all U.S. industries include: healthcare information (9.4 percent), home healthcare firms (8.5 percent), medical labs (8.2 percent), and generic drug-makers (6.5 percent).

To give a clearer picture of which healthcare firms are earning the most, Newman has compiled some data from Capital IQ, a division of Standard & Poor’s, showing net profit margins over the past 12 months for a number of well-known companies. “The following list includes the three largest firms in each of five different sectors: biotechnology, drug manufacturers, healthcare plans, healthcare services, and medical equipment. Some of these numbers are sure to be off-putting to Americans who are making sacrifices to pay for healthcare or can't afford it at all. . . . .”

• Amgen (biotechnology): Profit margin, 30.6 percent
• Gilead Sciences (biotechnology): 37.6 percent
• Celgene Corp. (biotechnology): 11.9 percent
• Johnson & Johnson (drug manufacturer): 20.8 percent
• Pfizer (drug manufacturer): 16.3 percent
• GlaxoSmithKline (drug manufacturer): 17.4 percent
• Unitedhealth Group (healthcare plans): 4.1 percent
• WellPoint (healthcare plans): 4 percent
• Aetna (healthcare plans): 3.9 percent
• MedcoHealth Solutions (healthcare services): 2.1 percent
• Express Scripts (healthcare services): 3.7 percent
• Quest Diagnostics (healthcare services): 8.7 percent
• Medtronic (medical equipment): 14.9 percent
• Baxter International (medical equipment): 17.5 percent
• Covidien (medical equipment): 12.3 percent

Sources: Morningstar; Capital IQ . Similar data on the most recently quarterly profit margins for a number of industries and firms are available on the Web at the Yahoo Finance Industry Center

__________________________________________________

Lift up your hand, oh God. Do not forget the helpless. Psalm 10:12

http://www.physiciansforpeace.org/
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Pip
Posted Sunday, September 06, 2009 5:21 PM


 

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Greed rules when you have a bunch of sick people over the preverbial barrel.

Pip

Antibiotic Protocol - Minocin, Zithromax, Naproxen (occasionally), 1 mg. Folic Acid.

Supps are Milk Thistle, Black Cohosh, Bromelain, Potassium, Magnesium, Calcium, NAC, B12, Hawthorne, CoQ10, MSM, Tumeric, and weaning Melatonin!  PROBIOTICS, PROBIOTICS, PROBIOTICS!!!

Occassionally Nystatin, Diflucan, GSE, Oil of Oregano still sitting on the counter!

Feel free to PM me about the Antibiotic Protocol~

Healing is a matter of time, but it is sometimes also a matter of opportunity.               Hippocrates 

                         
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Grandpavan
Posted Sunday, September 06, 2009 5:40 PM


 

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Antitrust legislation and its enforcement should ensure an opportunity for others to compete with any lucrative business.  I don't know how to locate or read financial statements but I did look at Morningstar and found the following about Amgen: "Amgen's blockbuster anemia drugs have been under pressure for the last couple of years, and this leading biotech has responded by restructuring operations and squeezing value from other products. With stabilizing sales, a leaner business, and a promising new drug candidate up for approval, we think Amgen has emerged from the storm with its competitive advantages intact."  This tells me that there is competition in the pharmaceutical industry and if these high profit margins were sustainable there would be others taking advantage by more competition.  However, the pharmaceutical industry has a great many uncertainties and losses are quite possible.  It is a high risk industry so the potential rewards have to be high to offset the potential losses.  We need to have drugs and I don't know how the manufacture of drugs will be finanaced without the pharmaceutical companies.  If their profits decrease some investors will leave for more stable ventures and the pharmaceutical companies will lack the capital to continue making drugs.  At least this is the way I see it.  God bless.

Age 82, diagnosed RA 12/2001, married since 1952, 4 sons no daughters, 4 grandsons 1 granddaughter.  Doing well on Methotrexate and Remicade.
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Joy125
Posted Sunday, September 06, 2009 6:45 PM


 

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Grandpavan (9/6/2009)
Antitrust legislation and its enforcement should ensure an opportunity for others to compete with any lucrative business. . . . This tells me that there is competition in the pharmaceutical industry and if these high profit margins were sustainable there would be others taking advantage by more competition. . . . We need to have drugs and I don't know how the manufacture of drugs will be finanaced without the pharmaceutical companies. . . ..



Competition has been limited by several mergers and acquisitions of drug companies that have taken place over the last 15 years. The most recent is Pfizer acquiring Wyeth, in which an antitrust lawsuit has been brought. From an August 31, 2009 Contra Costa Times article:

"A group of seven pharmacists, including three from Marin County, has filed an antitrust lawsuit in an attempt to block Pfizer Inc.'s planned $68 billion acquisition of Wyeth.

The suit, filed Aug. 21 in U.S. District Court in San Francisco, alleges that the deal will drive up drug prices and should be stopped because it depends on banks receiving large amounts of government bailout money for financing.

. . . "Our concern is this will certainly create the largest pharmaceutical company in the world," Lofholm said. "The bottom line is consumers will end up paying more for drugs because of the combination of these drug companies."

The suit asserts that Pfizer and Wyeth offer a number of products that directly compete with each other. . . . The merger will eliminate all competition between such products, the plaintiffs say.

According to the suit, Pfizer is the world's largest drug maker, and Wyeth, based in Madison, N.J., is the fourth-largest drug maker in the United States. If the merger is completed, the new combine will control approximately 40 percent of the manufacture and sale of prescription drugs in the United States, with the next highest competitor having approximately 13 percent, according to the lawsuit.

The suit quotes Pfizer's chief financial officer, Frank D'Amelio, as saying that Pfizer intends to use debt to finance $22.5 billion of the deal. Four of the five financial institutions providing the $22.5 billion - Bank of America, Citigroup, Goldman Sachs and JP Morgan Chase - are recipients of major capital infusion under the U.S. Treasury Department's Troubled Asset Relief Program, the suit noted.

The suit alleges that the use of federal bailout funds for such a merger is inappropriate particularly because the buyout would result in the elimination of 22,000 jobs.

To read complete article see: http://www.contracostatimes.com/news/ci_13241460



From a March 9, 2009, Businessweek article, "Drug Mergers: Killers for Research," it discusses the merger of Merck and Schering-Plough, and Pfizer and Wyeth:

" . . . one part of a drug company's operation that never seems to do well in a Big Pharma merger is research and development. Pfizer's long term R&D prospects aren't any better after it wrings all the efficiencies it can out of its $64 billion merger with Wyeth Labs, announced six weeks ago . . .

The pharmaceutical industry has seen plenty of huge mergers over the last 15 years, including several by Pfizer (PFE), and Schering's $14 billion purchase of Organon, a Dutch company, two years ago. But the consolidation has not led to an upsurge of new drugs. Analysts estimate that pharma R&D productivity today is two-fifths of what it was 10 years ago.

"These mergers tend to have a negative effect on R&D culture in general," says Ian Wilcox, global director of the pharmaceutical practice for Hay Group Consulting, particularly when scientists are jettisoned along with other staffers in the inevitable wave of layoffs following a takeover. . . .

To read complete article see:

http://www.businessweek.com/technology/content/mar2009/tc2009039_020072.htm

__________________________________________________

Lift up your hand, oh God. Do not forget the helpless. Psalm 10:12

http://www.physiciansforpeace.org/
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Grandpavan
Posted Sunday, September 06, 2009 7:04 PM


 

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Both the content and enforcement of anti-trust legislation is the responsibility of by the government.  If this is inadequate it is a failing of government and not of the pharmaceutical industry.  God bless.

Age 82, diagnosed RA 12/2001, married since 1952, 4 sons no daughters, 4 grandsons 1 granddaughter.  Doing well on Methotrexate and Remicade.
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