Well, if you thought Barack was bad for business, wait until you get Hillary. I followed up on a New York Times article that focused on a small biotech company that hiked the price of a drug from $13.50 to $700. Progressives sprang into action and Hillary got the jump on Bernie Sanders. The company in question bought a drug that was losing money. Whether this is the right price or gouging, I am not sure, but I know if the opportunity is there, a rival will sell a similar product for less.
There is no doubt that this is the perfect populist issue and a perfect example of corporate greed- a 5000% markup for a drug. Where’s the humanity, concern, and sense of community?
The problem is that most drugs cost more than a billion dollars to develop and many are never approved. Once drugs are approved; sooner or later, there will be a generic version, essentially destroying the ability to recover cost or generate profits.
I am not sure where this particular situation is going, but I know it’s a topic that will not fade away. It would provide another Trojan horse that would swell the government even more and add political correctness to decisions, resulting in wasted resources and fewer medical breakthroughs. However, for Main Street, this next story about the CEO of a peanut company convicted and sentenced last night to 28 years in prison for hiding a salmonella outbreak will make folks want to pick up the pitchforks.
One thing is for sure; CEO of Turing Pharmaceuticals isn’t apologizing for the 5000% markup of Daraprim, which is used by AIDS patients. While admitting each pill only cost a buck to make, he says there are other costs factored into the price. Something tells me that Martin Shkreli just vaulted to the top-ten list of potential Donald Trump running mates.
I am just sayin’
Medicine & Miracles
I’ve had a lot of experience with the medical industry, mostly supporting past and current loved ones. Moreover, I get how we can become frustrated with the whole thing. It starts with the doctors and nurses, to the cost, and mostly to the inability of them to make our loved ones well. Families sometimes greet the ups and downs of the treatment of our love ones with scorn and distrust, while our love ones lay in a hopeless state, which can be frustrating. However, where we are with medicine is a miracle in and of itself, and it is something we should celebrate, not punish.
Before we start putting in more levels to getting new drugs and treatments to patients, we must know it will get much worse.
Right now, developing and vetting a new drug can take more than ten years.
So, we’ll hear more from Hillary today on what she would do to make sure drugs are fairly priced. Yesterday’s tweet crushed the biotech space with the iShares Nasdaq Biotechnology ETF (IBB), down 4.6%. I’m excited about buying some of these names on weakness.
The fact a Hillary tweet could knock the stuffing out of a segment of the market highlights just how much biotechnology stocks have rallied, but it also hints that Wall Street might think she’s going to win the White House.
I was pleasantly surprised that the rally held. It’s not uncommon these days for markets to bounce back, but once the initial burst fades, it is not surprising to see all gains fade in a huff. Instead, Monday, stocks held up and closed with respectable gains.
Once again, I want to stress to keep an eye on oil. Goldman Sachs (GS), which predicted crude oil would be cheaper than lemonade, did something of a double take by lowering their U.S. production estimate by 5,000 barrels a day; so many rigs being taken offline, including eight last week (as crude finished +4.5% to $46.68). It’s a global commodity, but watch crude oil and the stock market as a gauge for the U.S. economy.