Saturday, January 18, 2014

As Obamacare Goes Increasingly Fully "LIVE" -- An Assessment Of Pharma's Lobbying Spend ROI (2003 to 2013)

Two caveats -- the graphic underlay at right was derived from a non-profit policy group that also was in favor of the ACA of 2010, or Obamacare, if you prefer. Second, if one annualizes the reported 77,500 per cent return, over the would-be ten year "investment" horizon, the return on investment is really "only" 7,750 per cent, per year. Still -- that's IMMENSELY better than Tesla Motors, this past summer -- and/or Apple (to find a more comparable time investment horizon), put together -- times ten. A very great investment, that.

So -- even as Merck closes in on $50 million spent on lobbyists over just the last five years, it is plain that big pharma generally -- and Merck specifically -- will not see the same lofty ROIs in the coming five years.

Why? Because the $90 billion that drives the gargantuan ROI is actually slowly being contributed back, by pharma -- as it moves forward in closing the donut hole, and it had agreed to foot the bill (or a large part of the bill), on various other health care reform measures, in the Obamacare rollout/implementation (2011-2014).

And again, that will be increasingly good news, for the American health care (and drug) consumer. So -- eye-popping figures, to be sure -- but past results in this case, almost certainly will not be a predictor of future performance (on the ROI scale, for Merck, here). From the site of the original underlay graphic then, circa late 2012 (so, it is a bit dated):

. . . .But as long as we have a political system that bends to the whims of Big Money, the best ROI you can get is to [hire] a lobbyist. . . .

It is likely true that Big Oil and Big Business generally, will be able to bend the law, to favor their wishes -- for. . . essentially ever, here in the US. And pharma will be no exception -- it just is unlikely to be the leader of the pack, in the next five years. If nothing else, with federal and state run exchanges and other quasi-governmental payers taking a driver seat, pharma's branded drug margins are definitively going to shrink. And that would be true -- even if generics were not entering the fray. And they are -- in a steady, silent, marching army -- out there, in the snow. . . they are marching into your town, your village -- your pharmacy, right now.

And well. . . the snow is piling up in drifts, yet again -- but the wind chills make it a balmy plus 7, so it is time to go shovel (again). . . in the meantime, be excellent to one another.

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