Big Pharma Primes The Pump

Consider this article in the Wall Street Journal on increased prescription drug prices last year, despite the “Great Recession.” Obviously, the drug makers are trying to get their licks in now before the health care overhaul takes effect, despite transparent denials by their various spokespeople.

This serves as yet another example of the difficulty of targeting corporations without harming end consumers but that is not the question at hand. Much ink has been spilled chiming in on the future winners and losers of this legislation. For instance, hospitals are seen as clear winners due to less prospect of being stiffed by uninsured patients and pharma companies gave big concessions to help shape the bill. While we own GlaxoSmithKline (GSK),   I advise skepticism against investing too much credence into what is now conjecture. The economy has too many moving parts to accurately predict the fall-out from such a complex piece of legislation into a system as labyrinthine as our asinine health care process.

After all, remember the financial industry’s tears of joy after 2005′s bankruptcy reform was passed into law? Little did they know a few years later, their moment of triumph would exacerbate the 2008 financial crisis as consumers abandoned big-money mortgages to pay off credit cards due, in part, to that reform the bankers and their ilk so vehemently pushed for.

Will the same happen here for backers of this health care bill? Stay tuned.

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