Page 97 - CL Armchair Case
P. 97
As with the US in the UK Clinton’s comment, sent the next
day shares of US biotechnology companies down. It was
later reported that she was proposing a $250 monthly cap
on prescription drugs for patients with chronic or serious
medical conditions. The impact of her comments spread to
European drugmakers with the effect that in the UK, shares
of:
- GlaxoSmithKline and AstraZeneca fell by more than
3% and
- Shire, the Irish biotech company, dropped more than
4%.
- Roche, the Swiss drugmaker, and Germany’s Merck
each fell more than 2%.
In the UK, the National Health Service is the main buyer and
prices are set through a voluntary scheme between
manufacturers and the government, trying to strike the right
balance of serving patients and generating money to keep
the drug pipeline going. Profits are capped to stop prices
creeping too high.
In the US, the buyers are private insurance companies as
well as the government through the Medicare and Medicaid
system. It's a market and prices can go up and down,
depending on what people are willing to pay.
