Healthcare

Human cost of Obamacare repeal bill is too high

24 May 2017

The U.S. House legislation, newly scored, threads the financial needle by cutting healthcare outlays and taxes about equally. But 23 mln Americans could lose insurance by 2026, doubling the number without cover, and premiums may skyrocket. It's hard to see the Senate buying it.

Trump’s fanciful budget relies on voodoo economics

22 May 2017

Paid parental leave and caps on repaying student loans sound appealing. But the rest of the president’s budget plan to cut $3.6 trln relies on pie-in-the-sky assumptions about employment rates and reforming Obamacare and welfare. It’s a non-starter even for a Republican Congress.

Time for UK to lose timidity on taxing property

22 May 2017

Theresa May has backed down on a so-called “dementia tax” following a backlash against older Britons using their homes to fund social care. How much the state should subsidise these costs is up for debate. But unearned housing equity should be taxed more.

Wasted time is U.S. healthcare’s big hidden cost

22 May 2017

America spends 18 pct of GDP on the medical-industrial complex, almost double most countries and for poorer results. Yet the figure excludes the effort of finding approved doctors, getting reimbursed and the like. That makes the potential gains of health reform even greater.

Elliott turns activist hose on burning Bush

18 May 2017

Medical-software firm Athenahealth trades at a big discount to rivals after expanding poorly and often missing estimates. Elliott’s 9 pct stake in the $5 bln company should allow it to douse colorful and erratic founder Jonathan Bush’s role as boss or force an outright sale.

WannaCry exposes glitch in tech business model

15 May 2017

Britain’s health service was among users of Microsoft Windows hit by a virus because they hadn’t installed an update. This is, in theory, the user’s fault. But when customers are big, or the result of their negligence is grave, it’s the company that’s likely to end up bearing the cost.

Obamacare fever impairs Republicans’ vision

4 May 2017

The party is hell-bent on pushing a new health framework to fulfill campaign pledges. Congressmen are moving so quickly that the costs and coverage fallout are unknown. Important benefits could be waived while sick people pay more. Only voters may cure this political malady.

Pharma deal offers new buyout double-dip trial

27 Apr 2017

Carlyle and Hellman & Friedman are swapping stakes in drug tester PPD while increasing its paper value 2.5 times, to $9 bln. The firm’s growth may justify the valuation but shuffling buyouts is opaque and can harm returns. As fund-to-fund deals grow, this risk will loom larger.

Abu Dhabi cure has limits for Mediclinic investors

27 Apr 2017

The emirate has thrown a sop to citizens by agreeing to pay more of their healthcare costs. That's good for local hospital operators like UK-listed Mediclinic. But a near-20 percent jump in its share price looks exuberant. Abu Dhabi may try to recoup its money in other ways.

AstraZeneca reaches point of maximum pain

27 Apr 2017

The drugmaker's revenue fell 10 percent in the first quarter, despite a boost from non-recurring sales. Losing patents has hurt Astra's pricing power. Winning approval for new drugs would help boss Pascal Soriot rebuild. Investors are not fully factoring in that possibility.

Fresenius bets $4.8 bln on post-Trump drug sector

25 Apr 2017

The German healthcare group’s bid for Akorn makes sense. The U.S. drugmaker’s high-margin business has little overlap and a full product pipeline. It is paying a 35 pct premium but Fresenius needs few synergies to meet its cost of capital. Politics may be the fly in the ointment.

Trump’s first 100 days provide more art than deal

24 Apr 2017

The U.S. president is planning a flurry of events before Saturday's landmark, including another try at repealing Obamacare and the unveiling of a tax plan. Promised early policy wins have yet to materialize though. Given his record, he’d be wise not to risk a Washington shutdown.

Lackluster $24 bln medical merger better than none

24 Apr 2017

Becton Dickinson's deal for C.R. Bard involves cost cuts worth less than half the 25 pct premium. Like lawmakers, though, U.S. healthcare firms are stuck with Obamacare's pressures. Scale brings negotiating power needed to sell needles and catheters to consolidating hospitals.

JPMorgan’s $100 bln deal cash may have few takers

19 Apr 2017

The bank's global M&A boss dangled the audacious notion that capital markets could fully finance a 12-figure takeover. He didn't suggest such a transaction was in the works, though, and there aren't many plausible targets. One theoretical pairing could be J&J buying Abbott.

Alere discount diagnoses limits of deal desertion

17 Apr 2017

The U.S. medical-test company is selling for 9 pct less than first agreed. Buyer Abbott had threatened to walk away after Alere's billing practices and accounting came under fire. To settle such a good MAC test case suggests the M&A escape clauses are merely negotiating tools.

Flu exposes U.S. folly in weighing fear and risk

3 Apr 2017

Americans are 1,000 times more likely to die from this common illness than terrorism. The current, and worst, bird-flu outbreak in China means the imbalance is even higher. Washington's decision to spend so much more on homeland security than preventing disease is misguided.

Nominee’s industry ties risk side effects for FDA

29 Mar 2017

President Trump pledged to close the revolving door, yet FDA nominee Scott Gottlieb is taking his second whirl. Experience in government and industry is valuable, but his potential conflicts with pharma firms may hamper the agency. Recusal isn’t a prescription for effectiveness.

Trump’s dealmaking falls sick – for now

24 Mar 2017

Republicans in Congress wouldn’t support an alternative, so Obamacare will live on. Efforts to undermine it will continue. Meanwhile, medical costs still outpace inflation. Unless that changes, the choice between squeezing costs and rationing care will remain on lawmakers’ minds.

Corona Capital, March 18: Elizabeth Warren

18 Mar 2020

Breakingviews has launched a daily column covering pandemic-related insights that you might have missed. Throughout the day, we’ll bring you shorter-than-usual views with the same financial savvy on companies, economies and capital markets during this important unfolding story.

Obamacare reform rests on GOP sleight of hand

13 Mar 2017

The Republican plan to replace the Affordable Care Act cuts the deficit by $337 bln over 10 years, the CBO estimates. It does so by removing 24 mln people from the program and ending Medicaid expansion. That’s a ruse anyway: taxpayers bear a lot of the cost of the uninsured sick.