Healthcare

Edward Hadas: AOL, solidarity and health insurance

19 Feb 2014

The head of AOL managed to say something really stupid about employee benefits two weeks ago, and to sound callous while he was at it. It’s a shame Tim Armstrong came off so badly, because he was grappling with a serious topic without an easy solution: How to share costs fairly.

Actavis makes pharma deals look generic

18 Feb 2014

Its $25 bln acquisition of Forest Laboratories follows a familiar formula in the sector. Uppity investor? Check. Low-tax jurisdiction? Check. Buyer’s stock rises? Check. And over $8 bln of value created means financiers will keep busy with their own prescriptions for M&A success.

Quitting tobacco, CVS has a Don Draper moment

5 Feb 2014

Like the “Mad Men” protagonist, the drugstore chain has made a highly publicized and well-orchestrated virtue of a moral necessity. Pulling cigarettes from shelves will cost just 17 cents a share. But the healthcare bona fides against rivals like Walgreen can offset the hit.

The first $1 million drug may be a bargain

4 Feb 2014

An approved gene therapy by uniQure, whose IPO is slated for this week, has an eye-popping cost. It could eliminate a lifetime of hospital trips for sufferers of a rare disease, but it’s hard to say because so few patients have been tested. Even so, it may be rationally priced.

Trustbusters give Obamacare a splitting headache

30 Jan 2014

Hospitals, doctors and bankers figured mergers would enhance efficiency, one of the president’s goals. Now a court says they can hurt competition and wants a deal undone. The troubled law could use a break from its many woes, but a dose of antitrust scrutiny might do some good.

Common sense prevails as McKesson lands Celesio

24 Jan 2014

U.S. drug wholesaler McKesson has revived its 6.2 bln euro takeover of German peer Celesio. That makes sense: the bulletproof new deal benefits the buyer; the selling Haniel family; and Elliott, the U.S. hedge fund that had built up a blocking stake.

Merck woes show animal drugs are no panacea

30 Dec 2013

Animal medicine, whether for livestock or pets, is booming. Pfizer’s spinoff, Zoetis, trades at a fat valuation premium. But controversy over Zilmax, Merck’s muscle-building feed additive, suggests that an increasingly complicated food chain comes with its own investment risks.

Animal health carve-ups to come two by two

13 Dec 2013

The business is pharma’s secret cash cow: R&D costs are lower, scrutiny’s gentler and growth faster than human care. Shareholder pressure is forcing firms from Novartis to Merck to explore sales, JVs or IPOs. The risk of seller’s remorse means buyers may have to pay top dollar.

Uruguay’s weed spoils could get even higher

12 Dec 2013

The country is first to legalize marijuana trade, with production from co-ops, sales to locals only and prices fixed. Relaxing such restrictions, however, could really spark up the economy. The Dutch did well from cannabis tourism, but agribusiness could be the winner in Uruguay.

Edward Hadas: How not to do healthcare

11 Dec 2013

Prices and rationing are generally effective tools for economic management. Not in healthcare. The U.S. pricing system is chaotic and British rationing has created a bureaucratic monster. But the two contrasting models are both valid – and could be made to work better.

Silicon Valley healthcare hubris no match for DC

9 Dec 2013

Google-backed genomics startup 23andMe harnessed the twin philosophies guiding the new economy: technological disruption and regulatory arbitrage. Selling unproven medical tests and ignoring regulators failed to impress the FDA, which essentially shut down the service last week.

Merck’s pricey deal will make material difference

5 Dec 2013

Germany’s drugs group Merck has made a toppy 1.6 bln stg offer for the UK’s AZ Electronic Materials. The deal offers synergies and diversification, and deploys otherwise idle cash. Since pharma valuations are rich, the speciality electronics firm offers relatively cheap growth.

M&A gets greedy in cross-border pharma deal

5 Nov 2013

Endo Health is the latest buyer to receive a warm welcome for a sensible acquisition with notable synergies. Its market value jumped almost as much as the purchase price for Paladin Labs. But the deal also involves a huge tax dodge and investors aren’t factoring in enough risk.

Obamacare mess is opportunity for Valley hackfest

21 Oct 2013

The launch of the new U.S. healthcare law has been accompanied by technological disarray. That gives West Coast tech whizzes who talk about improving the world a chance to muck in. Medical IT projects are tough, but a dose of crowdsourcing could help this one.

Review: Economic history makes a happier return

4 Oct 2013

In “The Great Escape”, Angus Deaton recounts the frequently forgotten economic accomplishments of the last century. There were massive improvements in health and welfare. While giving new perspective to the rise of inequality, he makes a persuasive case against foreign aid.

U.S. shutdown is only preamble to bigger battle

30 Sep 2013

Budget impasses that force Uncle Sam to close shop aren’t that rare and seldom last long. The bigger problem is a likely rematch over the federal debt ceiling. Back in 2011, even a distant threat of technical default rattled markets. Today’s politics make the danger more real.

Rejigged German clinics deal looks overpriced

13 Sep 2013

German hospital group Fresenius is buying two-thirds of rival Rhoen-Klinikum for 3.1 bln euros. The surprise deal comes after awkward shareholders in Rhoen torpedoed a full takeover last year. But the buyer is paying a rich price and only expects limited cost savings.

Elan acquisition contains possible side effect

29 Jul 2013

Over-the-counter drugmaker Perrigo isn’t a natural buyer for the Irish biotech. Elan is largely a shell company with cash and royalty rights to a blockbuster treatment. Tax savings dominate the logic of the $8.6 bln deal. Relying on a practice under growing scrutiny is risky.

GSK finds toxic side effects in Chinese market

16 Jul 2013

The UK pharma group is accused of using elaborate kickback schemes. But the Chinese combination of pervasive state involvement, underpaid doctors and coveted foreign products is almost an invitation for bad practice. A full cure requires time, money and stronger institutions.

Hostile $10 bln biotech bid set to go far higher

1 Jul 2013

Partners Pfizer and Bayer are natural buyers of Onyx. But Amgen has jumped in first, sending the cancer drug specialist’s shares up more than 50 pct. Onyx’s position in the hot field, rights over multiple potential blockbusters and a wide field of bidders suggest a rowdy auction.