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China's healthcare costs have increased in the last decade without effective cost control measures. With the decline in consumer spending in the last decade to where it is now only 35% of GDP, and ordinary Chinese setting aside a large portion of savings for costly drugs and healthcare, reducing healthcare costs is a high priority to rebalance the economy and increase consumer spending. By comparison in the U.S. it is 70%. Bussey points out the importance of this for the new leadership of Jinping-Keqiang in China. Xinhua, the Party offical news agency, expressed China's new policy, saying that "some believe China may see a nationwide price cut on medicines." Regulators have begun probes of Nestle and Danone for possible anticompetitive activity and the two companies dropped prices for baby formula.

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Drug company is using a new tactic for pricingits narcolepsy drug Provigil. It has increased Provigil's price by 28% in 2008, and 74% more expensive than in 2004. he tactic is to shift users to the longer acting deliberately lower priced longer acting version of Provigil called Nuvigil which has patent protection till 2023. Provigil by contrase faces patent expiration in 2012. This is its way of fighting cheaper generics.

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Teva's at-risk-launches of generic versions including Wyeth's Protonix and taking about 60% of the prescriptions written for Protonix. Its a profitable strategy for Teva Pharmacetical.

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Astra-Zeneca insists prescription drugs is an attractive business and remains focussed on that business, even as other pharmaceutical companies are reducing their exposure to prescription drugs.

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Bayer AG CEO Marijn Dekkers talks to the Journal's Geoffrey Rogow about the company's pharmaceuticals business and job retention. Dekkers says profits are reduced by the tight budgets of European governments and the pressure on pricing. He cites the 16% mandatory rebate in Germany on prescriptions. For Bayer diversification through the chemicals business offers a way to handle the ups and downs in the pharmaceuical business with patent expiration. He is not interested in acquisitions because of the high premium involved and the difficulty of recovering this for investors. Bayer like other drug companies has extensive operations in China. Bayer is training salespersons in top and second tier Chinese cities. It has a program to train 10,000 physicians in rural areas of China working with the local government. Dekkers makes an interesting point about jobs and job retention in the U.S. He says a lot of jobs were outsourced in the 1990's and its difficult to bring them back. Germany has done a better job with job retention with "kurzarbeit" and other programs working in partnership with industry. In his view this could have been managed better in the U.S. with active programs such as this in the last two decades....

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A sense of how the U.S. Supreme Court Justices viewed key aspects of the Obama Health Care Law after three days of hearings on March 28, 2012.

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The Economist quotes experts saying that drug innovations would not be affected by price controls on drugs. Pricing reforms can accomplish the reverse, spur innovation by doing as Britain and Germany are doing- pioneering comparitive reviews of drugs effectiveness and cost-benefit analyses aimed at reimbursing firms for new drugs based on their performance. Sanford Bernstein, a financial advisory firm, says in its study that a 20% reduction in what Medicare pays for drugs would not kill off innovation, it would reduce earnings per share of big pharma firms by 3-8%. As drug research is now done in many countries, and its a globalized industry, innovation is not likely to be automatically affected by price reductions in one country like the USA, according to Alna Garber of Stanford University and Patricia Danzon of Wharton Business School.

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By financing nurses for financially strapped doctor's offices are pharmaceutical companies promoting their own company's pills. These programs are called disease management programs and are used frequently in Europe. Examples given here are for the UK. After Merck's temporary suspension from this program because of promoting its own drug Cozaar in the UK, there has been some publicity and awareness has increased about the improperness of letting pharmaceutical companies use the program for pushing their pills.

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Criticism of the FDA's inability to exert pre-market quality control. Questions raised by a Professor of Pharmaceutical Sciences, about the FDA's inability to detect quality issues in manufacturing. After the J&J recalls for childrens Tylenol and other medicines, the FDA sent a warning letter to Perrigo, a company based in Michigan, that ships these children's medicines, about manufacturing violations. This includes ibuprofen tablets with metal shavings.

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CEO Shigetaka Komori of Fujifilm Holdings Corp. describes how Fuji responded to the technological changes that made photographic film obsolete. Kodak recently filed for bankruptcy protection. Fuji made the transition to other products to cope with the change. Komori became president in 2000. He says one of the responses was to reduce costs. In 2005 and 2006 Fujifilm reduced costs by $2.5 billion mostly in photographic film. Fuji's management asked the question what technologies the company possessed and how they could be applied in new business areas. This led to new businesses in making the films used for making LCD panels used on PC's, televisions and other devices. These materials generate 10% of sales. The other areas are in medical equipment, drugs and cosmetics. Fujifilm acquired health care companies Toyama Chemical for $1.4 billion in 2008 and agreed to buy SonoSite for $995 in Jan. 2012. Health care now makes up 12% of sales.

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Glaxo's Dr Garnier talks with Jeane Whalen of the WSJ about his work, a lot about his committment to running a company not just for rich countries, that access is a very important word for him and his efforts to make drugs affordable or even free or close to free depending on the country's standard of living, his 24-7 day handling the Avandia issues, and the innovative drug pipeline he has put together over the years.

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The Vytorin study and the way it was handled by Merck is fueling a debate on how tests should be conducted not to let sponsors interests interfere with the integrity of the process of collection and summarizing of data and their conclusions. There were many delays in the release of the data from the Vytorin study and this has also raised questions about its integrity and the way the drug companies handled it knowing their obvious interests in promoting Vytorin, which conflict with the whole process of experimental collection and processing of data and release of conclusions whatever they may be regardless of how they may affect the promotion of the drug in question.

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This editorial in the Wall Street Journal says faster approvals at the Food and Drug Administration have helped bring more generic drugs to market lowering prices for the public. In 20 months the Trump administration approved 1617 generic drugs, 81 a month on average or a 17% increase over the preceding 20 months. Council of Economic Advisers in October said this was a saving of $26 billion for the public.

President Trump is looking at price controls as a way to bring down drug prices. With increasing outcry about high drug prices in the U.S. the Trump administration and Democrats in Congress are looking for new approaches to bring down prices.

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Caterpillar Inc. CEO and Chairman, Doug Oberhelman, discussed the acquisition of ERA Mining Machinery Ltd., a maker of roof supports for coal mines, acquired in June 2012 for $700 million. The acquisition was "botched" said Oberhelman, leading to the $580 million writedown for the 4th quarter of 2012 and the 55% drop in profits. Former managers of ERA misled Caterpillar about the condition of the business, and in Obherhelman's words "fabricated documentation to cover their tracks." Caterpillar later found inaccurate inventory data and improper revenue recognition. The move to acquire ERA Machinery was an effort to increase sales of mining equipment in China, the world's largest coal producer. As in the Autonomy acquisition by H-P the diligence in checking accounting and other data failed. Caterpillar lowered its forecast for 2013 based on slower growth in mining and decline in investment by mining companies. Mining companies are seeing management turnover over overextended mining projects that went sour. Revenue for 2013 is forecast at between $60 billion and $68 billion, compared to $65.88 billion in 2012. Analysts see risks in the forecast because mining equipment orders may not accelerate till 2015. Mining equipment forms a bigger part of Caterpillar sales and sales growth than construction machinery- sales of mining equipment increased by 14% to $5.78 billion in the 4th quarter 2012, even as sales of construction machinery declined 25% to $4.03 billion. In the U.S. construction machinery sales declined 17% to $1.45 billion in the 4th quarter 2012....

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Dr Kevin Lee, a British neuroscientist, heads EpiNova, a 60 person unit within Glaxo's R&D department. Lee founded two biotech startups before joining Glaxo. The smaller units called Discovery Performance Units are Glaxo's way of creating biotech startup like units which it is hoped will produce better results. The 36 DPU's in Glaxo R&D are given 3 year budgets and flexibility to make their own decisions for drug research. The large bureaucracy, scientists not working across fields and an older mindset are seen as obstacles in the search for new drugs. EpiNova with its own logo operates in a a Glaxo facility, an hour north of London. Decisions are made faster, says EpiNova chemist Dr. Wilson, and the atmosphere is that of a startup willing to try new approaches quickly.

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How the discount drug programs at the big drug store retail chains like CVS. Walgreens and Walmart are leading to increasing competition and lower prices in generic drugs that are now sold for one month supplies for hundreds of unbranded drugs. Mass mechandisers like Target have their own programs selling drugs in the same manner as the Walmart which started this with its $4 generic prescriptions for one month supplies in 2006. Its changing the landscape for drug pricing gradually and will become part of a larger trend as health care costs are challenged in different ways by customers, merchandisers, and others in a low inflation cost conscious economic environment, with an overstretched indebted consumer looking for ways to cut costs on everything from groceries, shopping needs and prescription drugs.

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The NYT provides a good look at the situation in India in September where cases are over 4.5 million, the world's second largest after U.S. During the lockdown in April and May India had successfully stemmed the coronavirus. After reopening in June a lot has changed as can be seen in this look at the steep curve in June, July, August and September. Cases are now at the rate of 95,000 daily and deaths at 1172 daily as of September 9. The deaths are up 16% and cases up 29% over 2 weeks. Maps show the situation in the states with Maharashtra, Andhra, Tamilnadu, Karnataka, and Uttar Pradesh showing the highest cases. Maharashtra has about 1 million cases and the two states in the south east Andhra and Tamilnadu have about 1 million combined with Uttar Pradesh at about 250,000 cases. Delhi has about 200,000 cases. So that about half of the 4.5 million cases are in three states in the southeast and the western state where Mumbai (Bombay) is located. The increase was seen after increased testing from 200,000 a day to 1 million a day by the end of August, a steep jump being seen in late August and September. At the end of July the coronavirus recovery rate of 70% in India and 90% in Delhi were the favorable signs, until things changed in August with increased testing and the spread to rural areas. India is doing over 1 million tests daily. On September 3, 1.1 million people were tested, taking the total to 45 million tested throughout India.  As in Europe and America the reopening which is essential for the economy and jobs has resulted in a big jump in cases. The laws for lockdown were carefully obeyed without many of the problems seen in America and Europe, the early complete lockdown was implemented with success, and Indian pharmaceutical companies are some of the largest in the world giving the public wide access to essential medicines and drugs. The postal service has functioned remarkably well during the lockdown for delivery of essentials throughout the country, and earlier action to establish bank accounts for each and every individual in the country, has enabled rural Indians to get through this most difficult period. This has given the government some breathing room as it faces the cases from reopening in a vast country of 1380 million people.   ...

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The National Childhood Vaccine Injury Compensation Program protects vaccine makers from much of the litigation risk faced by pharmaceutical manufacturers. It limits compensation for death to $250,000. This special vaccines court is called Office of Special Masters at the U.S. Court of Federal Claims. This may be one reason for Pfizer's willingness to pay $68 billion for Wyeth which is amaker of childhood vaccines. Vaccines will generate $21.5 billion in sales by 2012, according to Sanofi-Aventis. Vaccines are biologic products that can't be copied. Wyeth's Prevnar is designed to protect children against 7 strains of pneumococcal disease. It has sales of $2.7 billion projected to grow to $5.5 billion in 2015 according to Sanford C. Bernstein & Co. Vaccines have driven huge reductions in childhood diseases, and the Act is designed to potect makers of vaccines, who suffered from excessive litigation in the 1980's.

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Mexico's economy grew at 1.34% in the third quarter of 2011, according to the national statistics institute. Annual growth is estimated at 4% for 2011. The war against organized drug trafficking in Mexico cost the economy one percentage point of economic growth, according to estimates by BBVA Bancomer, Mexico's largest bank. Mexico received $20 billion in foreign investment in 2011, about the same as in 2010. Cars and aerospace have drawn large foreign investment. Mazda will invest $500 million on a new plant in central Mexico. Honda says it will spend $800 million on a second Mexican plant. In recent years with higher costs in China, higher transport costs, and a weaker peso with a stronger yuan, Mexico is becoming more competitive with China as a manufacturing investment location. The younger workforce, low inflation and technical education schooling, offer Mexico additional advantages. Mexico is the second largest manufacturer of flat screen television sets, and is now the fourth largest location for outsourced IT such as call centers. Axa CEO, Henri Castries, and Siemens CEO, Louise Goeser, have very favorable views of doing business in Mexico. Siemens sees sales increasing by double digits through 2015, and has located one of three global R&D centers in the state of Queretaro. Goeser says many parts of Mexico are safer than parts of the U.S. A large part of the violence is concentrated in a few states, and in border cities like Juarez, and affects smaller businesses more than the large manufacturing enterprises of overseas companies. As a result it is as if there were several economies in Mexico, with foreign enterprises largely insulated from the violence. ...

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The Federal Trade Commission says food companies in the U.S. spent $2.3 billion in 2006 for advertising to children. With the epidemic in childhood obesity in the U.S., this raises serious questions about how product packaging, images and themes affect the eating behaviour of children. New guidelines have now been written at the request of Congress. They were written by the F.T.C., the Food and Drug Administration, the Agriculture Department, and the Centers for Disease Control. The regulatory agencies say they will take comments and consider changes before submitting a report to Congress. The guidelines call for foods advertised to children to include healthy ingredients such as whole grains, fresh fruits and vegetables, or low fat milk. The foods cannot contain unhealthy amounts of sugar, saturated fat, trans fat and salt. The sugar requirement would have cereals contain no more than 8 grams of added sugar per serving. Fruit Loops for example contains 12 grams of sugar per serving. The guidelines apply to both children and teenagers. However these guidelines are voluntary. At this time an industry led effort has not produced results. The Children's Food and Beverage Advertising Initiative, which is operated by the industry, lets each company set its own nutritional criteria. The regulatory agencies see the need for the food industry to follow a uniform set of standards. Without serious action on this issue the U.S. healthcare system will continue to be burdened with high rates of obesity related illnesses in the general population, and out of control costs. And the U.S. will continue to face the urgent problem of a lack of healthy eating habits of children teenagers, and adults....

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New code of marketing for the Drug Industry.