Monday, May 14, 2007

We're Saved!

Bloomberg (05.14.07):
"Profits at U.S. companies rose by more than 10 percent for the 19th straight quarter in the period ended March 31 as MasterCard Inc., Hewlett-Packard Co. and Prudential Financial Inc. surprised analysts with better-than- estimated earnings.

Companies in the Standard & Poor's 500 Index through May 11 reported an average earnings gain of 13 percent in the quarter, according to data compiled by Bloomberg. The last time growth was less than 10 percent was the second quarter of 2002."

Profit Growth in U.S Tops 10 Percent Again, Surprising Analysts

"Health-care companies reported 14 percent profit growth for the quarter, the largest increase since the second quarter of 2004. The eight biggest U.S. drugmakers beat first-quarter estimates in April and half of them raised their forecasts. The companies are being helped by a new U.S. drug insurance program as they head toward their biggest gain since 2000."

The drug insurance program helping BigPharm is Medicare's Plan D, which has a really great profit-enhancing feature built right in. As passed by Congress back in the day, Plan D prohibits Medicare from negotiating drug prices with the drug companies. The Veterans Administration, which can negotiate, "pays 58% less for drugs, on average, than Medicare Part D. For example, Medicare pays $785 for a year's supply of Lipitor (avorstatin), while the VA pays $520. Medicare pays $1,485 for Zocor, while the VA pays $127."

The difference, of course, is coming straight out of your pocket.

Which is not to suggest in any way that the fix was in when the thing was passed. "Former Congressman Billy Tauzin, R-La., who steered the bill through the House, retired soon after and took a $2 million a year job as president of Pharmaceutical Research and Manufacturers of America (PhRMA), the main industry lobbying group."

"Medicare boss Thomas Scully, who threatened to fire Medicare Chief Actuary Richard Foster if he reported how much the bill would actually cost, was negotiating for a new job as a pharmaceutical lobbyist as the bill was working through Congress."

Nothing like a free, unfettered market, eh?



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