Tag Archives: Pfizer

On this Friday 13th

There have been a few events going on, with all the hustle and bustle from America we are moving towards a possible point that this nation will be officially renamed, when that happens other domino stones will be pushed into a different direction. Yet there is still time, so we can ignore it for now. What was interesting for me, was a Facebook mail that has all the elements of becoming a flame, a wave of emotions, intentionally set in that way. Yet the part that was actually interesting were the facts that it had. Those facts were indeed interesting to look into, yet not by themselves. At this very moment I am digging to confirm certain numbers and see if they hold up.

 

Income 2013 Income 2014 Change

Aetna, Mark Bertolini

$30.7M $15M -50%
Centene, Michael Neidorf $14.5M $28.1M 93%
Cigna, David Cordani $13.5M $27.2M 101%
Humana, Bruce Broussard $8.8M $13.1M 48%
United Health, Stephen Hemsley $12.1M $66.1M 546%
Wellpoint Joseph Swedish $17M $8.1M -47%

These are health insurances and their CEO’s. This group of 6 have in their hands the health options of the bulk of Americans. Now, before we act in outrage, which we might still do, we see that two of them lost half their income, which in the worst situation, that person (Joseph Swedish) makes in 2 days the same I make in a year. In opposition, there is Stephen Hemsley, who makes in a day, the same I would make in 6 years. Now, we can make this about the imbalance, yet that is not what this is about.

Let’s not forget that these are manages health carers. In September 2016 we saw CNN report “A recent report by Kaiser/HRET Employer Health Benefits forecasts that the average family health care plan will cost $18,142, up 3.4% from 2015. That’s faster than wage growth in America“, and “Premiums on the Obamacare exchanges are expected to rise by double-digits this year“. Now, we need to tread carefully here, health care systems require more work and they need to look to what happens in the future, not just what happens now, So when we see Aetna report in 2016 a total revenue of 60 billion, yet an operating earnings of 2.7 billion, we see that there is a margin, yet not an overly exaggerated one. This is part of a system for 23.5 million members. In this on page 7 we see that the revenue is comprised of commercial and governmental premiums totalling 51.5 billion. Yet it goes further, when we see the growth that Aetna has had, the merger deal with Humana, which is interesting as it is set as a 37 billion merger, yet when we see the quarter of quarter growth of 3 years at least, does it make sense to see this as a mere 37 billion dollar merger when the operating revenue has been in excess of 58 billion for well over 3 years? In addition, Aetna reported an operating gain against costs of over 30%, so when we see the CNBC quote on November 10th 2016: “The Affordable Care Act was built on a flawed model that required getting as many people as possible into the insurance system, Bertolini said. And he said he thinks the Republican Party will make good on its promise to repeal it“, we wonder with their operating profits, a managed health care system no less, what are we not seeing? As stated, compared to the revenue, the profits are not outlandish, yet the entire Obamacare issue seems to give another view, one that clashes with the view that we see at Aetna. Now consider another quote, one we see on December 13th 2016, in bizjournals.com. Here we see: “As one of its arguments against the acquisition, the U.S. Justice Department says the deal would drive up prices on health insurance exchanges in 17 counties where Aetna (NYSE: AET) and Louisville-based Humana (NYSE: HUM) now compete“, you see where there is competition, prices are pushed down, so how come I suddenly see an increase in health insurance exchanges? The final part is one that strikes a sting on the violin of chaos too. Consider the quote: “Bertolini also testified that Molina Healthcare Inc., which has agreed to buy Medicare assets from Aetna and Humana for $117 million if the merger is approved“, now let’s be honest that $117 million is nothing to sneer at, yet what are these Medicare assets exactly? Where is the write-off? You see, two companies with a total revenue exceeding $100 billion annually over the last 3 years, in that light $117 million is close to no blip on the radar (0.11%). So why was it mentioned, why put Molina Healthcare Inc. in the picture? Well, like the other two players, they have had quarter on quarter growth for 3 years too, more important, even as their revenue is not as impressive of the two others, we see that annual on quarter, 2015 brought close to 50% growth, whilst 2016 is expected to surpass the 30% mark, those are operating revenue growths nearly unheard of in this day and age. And this is not the adult media sales, this is healthcare, so as we expect that there will always be growth, we need to see where the interests are of these players. Let’s not forget that the picture is changing. Humana Inc. is a for-profit American health insurance company, they clearly state this, so what will become of Aetna when that merger goes through? How will the picture change and how will that impact the members? They are both Managed health care, yet Aetna is not outspoken ‘for profit’, the numbers do bear this out to some degree. Yet in all this is not about the members or patients. This is about the shareholders and both have plenty, the question becomes what direction will Aetna take? Will we see a board of directors that find themselves in agreement with the senate under Emperor Tiberius Claudius Nero, when in 19 AD they proclaimed: ‘Puer Pauper‘ (fuck the poor), which by the way coincided with the expulsion of the Jews from Rome, life is full of irony at times. The reason to make mention of this is because Israel has a health care system not unlike the Netherlands. A compulsory plan where all Israeli citizens are entitled to basic health care as a fundamental right. There a person can sign up with one of four official health insurance organizations which are run as not-for-profit organizations, this is where we see the massive difference. ‘run-for-profit‘ comes at a price and that price is the additional dividends that the members must pay the shareholders. It is not that simple, but you get the idea. In all this the fact that this approach made Israel 4th in terms of efficiency and Israel was ranked 6th healthiest country in the world by Bloomberg rankings. These are numbers any government could be proud of. Neither the US nor the UK make that top 10, according to the article in Bloomberg, the UK doesn’t even make the Top20. So as we realise a few numbers and this all leads to a lot of questions, we can agree that there is nothing against ‘for-profit’, yet who remains in the US with the option to afford this? Perhaps that is why the link to Molina Healthcare Inc., just a small token proclaiming to remain ‘for the people‘, whilst relying on tax deductions and write offs to remain ‘for the shareholders‘. However, let’s face it, these two (Mark Bertolini and Bruce Broussard) are almost the lowest ones on the Health Care CEO list of incomes, still making per day about what I make per year. Yet even as their incomes drew the attention, it is the coverage, the operating profits and the for-profit sides in some of these Managed Health Care groups, whilst we see places like fortune.com inform its upcoming ‘victims’ that the costs will go up: “costs are expected to grow 6.5% through next year. While costs have finally reached a point of equilibrium after years of double-digit growth” as well as “36% of employers are even considering a defined contribution strategy where they would provide a set sum of money to each employee to pay for health care, and if a health care plan exceeds that sum, the employee is on the hook for the remainder of the cost“, so whatever increased quality of life the Americans did not get, there is information that well over 10% of the employers have adopted this strategy. Such plans, especially with the for-profit health care managers will see a shift in costs, from employer to employee. Fortune.com gives as reason: “There’s two primary factors that affect health care costs: how much is being consumed and the price for services and drugs. As it turns out, prices aren’t what’s primarily adding to the rising trend. It comes down to more people consuming more care“. I personally believe that the truth is somewhere in the middle lane. Both the needs of an aging population and the pharmaceutical patents driving up prices as pharmaceutical patents are chomping down on maximised profit per pill. In this Forbes reported two days ago that the pharmaceuticals are not happy. Here we see the quote “Much of Medicare is now run by private sector insurers like Humana or Aetna, who already bid on drugs to get lower prices (this is known as Medicare Advantage)“, Yet President elect Donald Trump stated: “I worry today that the pharmaceutical industry has a very false sense of relief or security because of a Trump administration and a Republican Congress. I think we should recognize that the drug pricing issue is a populist issue. Americans are rightfully angry. The fault is not, surely, on the pharmaceutical industry’s shoulders, but we bear that because we make the drugs. We innovate the drugs, and as a result of that, whether we like it or not, or we want to try to explain it or not, we have to deal with it.” As stated more than once in the past, I do believe in capitalism, yet at what point does capitalism become plain greed? When we look at the top 20 pharmaceuticals, they are hiding behind a 2% growth, yet these 20 companies which include Novartis, Pfizer and Johnson & Johnson were making 547 billion in 2014, whilst we see that 13 of them are turning a profit with one of them 127%, these are only the 2014 numbers, the profits have been steadily increasing, at the expense of those requiring medication, at the expense of a health care system that can afford less and less. In all this we see that places like Pfizer kept a gross profit of well above 38 billion and they weren’t even the best scoring one. Yet, the connection go on a lot further. You see, with Pfizer we see James C. Smith who is also on the public board of Thomson Reuters, Suzanne Nora Johnson is also on the board of American International Group, Inc. (insurances). James M. Kilts serves on the board of MetLife Inc. as well as Nielsen Holdings N.V. The list goes on. A group of board members already on a massive income, adding the incomes from other boards where they serve with incomes most people dare not dream of. What is more interesting is how we see an almost illuminati sized cloud of interaction with media, insurances and other interactions. All essential and profitable for Pfizer. When we look at Novartis that list of directors takes an even more interesting turn. Ann Fudge who also serves on the board of the US Council on Foreign Relations, with additional functions at Unilever as well as the Northrop Grumman Corporation. Pierre Landolt, Ph.D. who is also the chairman of the Swiss private bank Landolt & Cie SA, a Financial Institution in Brazil and a few other enterprises. Andreas von Planta, Ph.D, linked to HSBC, Moller Finance, and the regulation board of the Swiss stock exchange and finally Srikant Datar, Ph.D., who goes beyond mere Novartis, with additional board placement with ICF International Inc., Stryker Corp. and T-Mobile US. The pharmaceutical boards read like a weave of corporate interaction with links all over the Fortune 500. A conspiracy theorists wet dream.

For us it is not about who they are connected to, but how such links could be used to maximise profits. The idea that the Pharmaceutical industry has its representation, and on the other side we see an optional Novartis with its board member Ann Fudge who also serves on the board of the US Council on Foreign Relations, how is that for hedging your bets on both sides of the profit sandwich?

On this Friday 13th we see news in the Guardian mention of the NHS winter crisis, we have been seeing from all directions the Obamacare and how Obamacare Premiums are expected to Increase by ‘Double Digits‘ in 2017, one can only hope that the first digit is a ‘1’. With pharmaceuticals and insurances both on the maximisation of profit, the people in several places are pushed in a corner with no place to go see about any options.

Only the superstitious will think that the health care news will be better tomorrow, it is Friday 13th after all.

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Behind the smiling numbers

An interesting story got to see the internet light by Nicholas Watt (at http://www.theguardian.com/society/2016/feb/16/income-tax-must-rise-3p-to-stop-nhs-staggering-from-year-to-year). The title ‘Income tax must rise 3p to stop NHS ‘staggering from year to year’‘, which implies initially that the NHS needs £1.95m, which might be OK. Yet the truth is far from that, the text gives us that Lord Kerslake stated “Income tax will have to increase by at least 3p in the pound…. “, which is another story entirely (and first evidence that members of the House of Lords are gifted with a decent sense of humour).

His lordship is quite correct when he states: “big questions needed to be asked to ensure that spending kept up with medical advances, an ageing population and the need to invest in hospitals“, yet these are mere facts that should have been asked almost a decade ago, there was a clear and near immediate danger to the health of the NHS. The logic we see after that becomes an issue (read: worry, concern, and both are debatable) “Health spending needs to rise at least in line with GDP. Arguably, we may need to go faster if we want to match European funding. You might argue there is a discount there because we have a more efficient system. But it’s got to be at least GDP-linked otherwise I don’t think we’ll get there“. So let’s take a look. First the Dutch version (at http://www.rijksbegroting.nl/2015/voorbereiding/begroting,kst199401_25.html) gives us two issues should we be willing to ignore language barrier. The BZK gets €71.3b, which is divided in €7.5b called budget financed expenditure and €63.8b from premium financed expenditures. So for argument sake, let’s take the total and divide that on a population of 17 million, this now implies that there is almost €4200 per person (remember that this is a terribly rough estimate).

Now for Belgium we get the VBO with €23.85b. Now we all know that Belgium is a much smaller nation (not that much smaller than the Netherlands in size) and with 11.5 million calling the Belgium nation their homestead we now see that they end up with €2075 per person (Rounded upwards). Perhaps his Lordship could give a slightly more detailed explanation for the remark “Health spending needs to rise at least in line with GDP. Arguably, we may need to go faster if we want to match European funding“. Considering that the Netherlands and Belgium are next to one another and their budgets per person are apart by a mere 49.404%.

This gets me to the core of the proclaimed matter, can anyone explain why we are linking healthcare to GDP? Perhaps, and this is merely a lose speculation, some people in the House of Lords had the time to read a paper by Santiago Lago Peñas (added at the end) called ‘On the relationship between GDP and Health Care expenditure; A new perspective‘, now that might be a good thing, there is nothing wrong with Spain taking the lead in matters (especially if it is a good idea). Santiago Lago Peñas as well as David Cantarero Prieto and Carla Blázquez Fernández have written an interesting paper.

First let’s take a look at part of the abstract, which states “Econometric results show that the long-run multiplier is close to unity, that health expenditure is more sensitive to per capita income cyclical movements than to trend movements, and that those countries with a higher share of private health expenditure fit faster and following a different pattern“. Now, I am not going to take a deep dive into this one (it is after all an abstract), but it gave me a few ideas on where to dig.

Next are a few quotes: “Attention is paid to several usually neglected dimensions of this link. With this aim, four different specifications are presented, with the logarithm of per capital total health care expenditure as the dependent variable in all cases” this doesn’t seem to be more than just a quote, but it will have impact down the track.

It is part 2 called previous evidence that is a first issue. When we accept the initial statement “the debate on this link has moved on whether the income elasticity of health expenditure is greater or less than 1 (Bac and Le Pen, 2002). An income elasticity less than 1 classified health expenditure and income inelastic, therefore, as a “necessary” good. On the other hand, if the elasticity is higher than 1, health will be classified as a “luxury” good“, which will do for now. You see, my issue is when we see the part that follows:

  • The seminal paper by Newhouse (1977)
  • An earlier study by Kleiman (1974) for a different set of countries
  • Leu (1986) using cross-sectional data for 19 OECD countries in 1974
  • Parkin et al. (1987) using similar methods and data from 1980
  • Brown (1987) using a sample of 20 OECD countries

Here we have the first issue. You see, this is not regarding the methodology, it is about the data, methods of data collection, usage of weights (if done), these numbers regarded in contrast towards those temporary populations in reflection to the whole. Health expenditure is one part, but based against which healthy part. Now consider the initial reflection I had on the Netherlands and Belgium. They have very different norms in respect to mental health care. Now consider the statements ‘19 OECD countries in 1974‘ and ‘20 OECD countries in 1987‘ I will again make a clear speculative declaration that the mental health norms are not equal, especially when considering economic differences, which gives my first thought, how useful is the paper on a whole (I am not attacking it) and how applicable this would be (read: could be) in reflection towards the whole.

You only need to scan for ‘psychology, psychiatry and mental health’ to see that the paper does not take this into consideration. As we know that the EEC nations have had their own approach to mental health in the past, is not a statement that they did anything wrong, but if this is the first element that does not align, what else will not align (there are a few). One that shines directly behind the ‘previous evidence‘. You see in my head the question comes to mind when I see “The econometric analysis relies on annual data for 31 OECD countries from 1970 to 2009 gathered from the OECD Health Data Set 2011“, so is this aggregated data or raw data. if it is aggregated data the foundation might not align giving an unbalanced and invalid view (in my personal opinion), if it is raw data, what ground line data (the full population) is added so that the individual record compares towards the national whole, if that is missing how can any calculation be truly reflective of what was, especially taking into account the data is reflective over different time zones with very different social pressures. In that case I wonder if I can get a similar result by calculating Z-scores and run a Crosstabs in IBM Statistics #JustSaying!

Now we get back to the article which comes with the image of a smiling Lord Kerslake. Does this paper validate or invalidate the idea? No it does not, but it leads to questions, serious ones.

The quote “John Appleby, the chief economist at the King’s Fund, has estimated that NHS spending is due to fall from 7.3% of GDP to 6.6% in 2020-21. If health spending were to keep pace with economic growth, Appleby estimates an extra £16bn would have to be found every year by 2020-21 to take the NHS budget to £158bn. This works out at 3p on all rates of income tax, according to the IFS” is next!

The term ‘NHS spending is due to fall‘ reads like an event Baron Munchausen could have come up with (the character from Raspe’s book in 1785, not the syndrome). Of course the prediction is 5 years away, which makes it speculative. Now we know that John Appleby is more than the Chief economist for The King’s fund. He is also a Visiting Professor at the Department of Economics at City University and he has a whole range of publications to his name, so why am I opposed?

Well, part of this starts with his own article ‘Social care: a future we don’t yet know‘ (at http://www.kingsfund.org.uk/blog/2015/11/social-care-future), the two quotes that get the foreground are “In our submission to the Spending Review we called for social care to be protected from further cuts and for the money previously agreed for the postponed Care Act funding reforms to be retained and invested in social care. But non-protected departments have been asked by HM Treasury to model cuts of 25 and 40 per cent – so further cuts seem inevitable“, as well as “What would happen if the spending cuts applied to social care over the past five years continue over the next five? Spending on social care for people of all ages as a share of GDP has already begun to fall. It was roughly 1.2 per cent in 2009 but if cuts continue at the same rate it will have halved by the end of this parliament to barely more than a half of one per cent of GDP“. Now there is nothing wrong with any of the texts, John Appleby is not where he is because he is silly, he is very (read: extremely) clued in. I am stating that the environment has changed, it has changed drastically from 2011 onwards and in addition; the changes the UK faces over the next three years will take some of these prediction to town in not so nice a manner.

You will now ask why, which is the question you should ask!

We get part of this from the London School of Economics and Political science (at http://cep.lse.ac.uk/pubs/download/special/cepsp26.pdf), the initial answer is given on page 13. Where we see “To summarise, treatments for the “common mental disorders” of depression and anxiety can be self-financing within the NHS. By spending more, we save even more. This is different from much of NHS expenditure. At the same time we relieve one of the main sources of suffering in our community“, in addition page 15 gives us “According to the 2007 survey, which covered a random sample of households, only 24% of people with depression and anxiety disorders were in any form of treatment“. This now gives us the first part in all this. The overall costs are not in league of the budgets because there is a missing foundations of equality on what falls ‘within’ the NHS. There is no option for the NHS other than to evolve into something ‘more’ complete. The UK is about to get 20,000 refugees from war torn Syria (over several years), the initial approved £1b seems to be nothing more than a drop of water on a hot plate, the ‘why’ will be clear shortly.

The UK has seen a massive rise in mental health issues in the last year alone. Depression and anxiety mainly due to economic events (cost of living) is now a serious concern, especially as the pressures of the economy are likely to continue a few more years. Consider my article two days ago (at https://lawlordtobe.com/2016/02/15/is-there-a-doctor-on-this-budget/) called ‘Is there a doctor on this budget?‘ where we saw the link to ‘Health Care for Undocumented Migrants: European Approaches‘. The graph shown on page 3 is the charm. If we consider the cube, we see that on the X-axis we see subcategories of undocumented migrants, yet the same expenditure would apply to refugees (or the population for that matter). Now consider the Y-axis which is about the type of services and the Z-axis are the funding arrangements. Now this can be treated like a glass with liquid. If we increase the base (X or Y) the funding arrangements go down, it is the simplest of physics, a bigger glass requires more fluid to fill, so we have a population with more health care needs, mental health care in this case and the types of services is not just against depression or anxiety, it will require the coverage of war trauma and shell shock. This will impact refugees of all ages. So the glass gets bigger and bigger and more and more funding will be required to keep funding arrangements on an equal level, this is merely the application of logic.

This is why I opposed John Appleby’s approach, it shows little application of a changing population, merely a greying one (which is a form of change), but it does not hold water against the massive change the UK has faced since 2013 and will face until 2019. This is why I am not in agreement with the statements of John Appleby. Now we get back to Lord Kerslake. You see, the paper I mentioned is an example. It might not even be the foundation of Lord Kerslake’s approach. Yet a multitude of papers clearly show that there seems to be no real no equality in the setting of healthcare (read: cost of health care). It seems to be wearing a different hat in nearly every European nation, it would already be a great leap forward if they all had the same colour, which does not seem to be the case either.

Now we get the quote that wakes us all up “Appleby estimates that NHS spending would have to increase by 30% or £43bn a year to take NHS total spending to the EU-15 average by 2020-21. The IFS estimates that this would involve an 8p increase on all rates of income tax“, which is one side of the option. How about the other side? When we see that AstraZeneca has been able to avoid corporation tax on a massive scale, which dwarves when we compare it to the mergers Pfizer and Allergan have achieved. Is it perhaps possible that his lordship looks at another solution like closing that tax abyss? Might I suggest an idea where any corporation involved in tax avoidance gets its medication ‘grey’ listed? Which means that any drug that could be begotten in a generic form from a place like India will be selected as a first solution? It could even result in India starting businesses in the UK (with the economic benefits that those places will give). It would also send a clear signal that if corporations would like to avoid taxation, which in legal correct way is just fine, but at that point other distributors of pharmaceuticals will be found. I reckon that between that announcement and the offer of reduced medications (read: less costs for the NHS) from pharmaceutical firms would be forthcoming within 24 hours of making the announcement.

Yet, this was not about the costing, it was about the increase and setting against the GDP. The fact that health spending and economic spending are on par reads more like an option for deferred payments to big pharma and medical supplier than anything else. In case of doctors it would mean that their incomes would go through the roof (which might be a deserved reality), but it is one that the coffers under the care of George Osborne cannot afford.

There is wisdom in his lordship stating that “a royal commission should be established to build a national consensus on NHS funding“, which sounds a lot more ‘reliable’ (read: acceptable) than the Labour party giving way by letting a banker (Sir Derek Wanless) set the NHS spending levels. It is of course desirable to go with the people and keep the directly funded NHS free at the point of use, yet that comes with a price tag that is no longer realistic in this day and age of deficit, in addition harder times are coming for a while longer, making the price tag we already have a non-linear shifting one. Yet I feel adamant to speak that mental health must be fully accepted as part of the NHS (for all people, anywhere in the UK), which slides the scales of budget by a lot. A reality many papers (as I expect it to be) did not take into account. Raising income taxation as implied could equally be an issue as that could potentially drive depression and suicide statistics overnight (the latter would lower rents but that seems just too harsh a solution).

What is a given is that Lord Kerslake is the catalyst that is making us ask several serious questions.

I am however not entirely convinced that his lordship took the best path in getting these issues out into the open.

On the relationship between GDP and Health Care expenditure; A new perspective

 

 

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Penis Aqua Rosa Congressista

The Dutch used to have interesting names for classifying people. There was ‘Penis jujubes’ (originally: Droplul), which amounts to Liquorice Penis, which captions the non-Dutch titles dick, asshole and idiot. The other one was ‘Penis Aqua Rosa’ (originally: Lulletje Rozewater), which gets us Rosewater Dick, which is an expression for a man that has no backbone, a man that is weak and submissive. The latter one seems to apply to the US Congress in a few ways.

You see, the  article ‘Drug company boss Martin Shkreli refuses to testify to Congress‘ gives us part of it all (at http://www.theguardian.com/business/2016/feb/04/martin-shkreli-refuses-to-testify-congress-drug-daraprim), an issue that might be seen in the wrong light, if you only go by the one side of the story. You see, this is situation that Congress and their US laws created for themselves. Even if we get the ’emotional’ statement: “One member begged him to examine his conscience“, we all seem to ignore, that this is something Congress achieved all by themselves. You see the quote “Earlier, Shkreli and Turing’s chief commercial officer, Nancy Retzlaff, were criticized for hiking the price of Daraprim despite the fact it is the only government-approved treatment for the rare infection toxoplasmosis, which can be fatal for some Aids and cancer patients and endangers babies in-utero” is at the core of this.

Instead of setting up the law that fairness was at the centre of it all, politicians set the speculation that every pharmaceutical company and their fields would be ‘distributed’, that there was no overlap (for the larger extent), as such pharmaceutical had a clear field for maximised profits. How long did you think it was going to take before someone weaselled themselves into that crowd, with the simple goal of maximising his Return-on-Investment? The United States of America has always been about capitalism and living the dream. Martin Shkreli is doing just that, now we get what some might call ‘sissy noises‘ from the Halls of Congress!

Let’s be Frank (or Punch and Judy; whatever works for you), what Martin Shkreli does is utterly unacceptable, yet, it is Congress that did not legislatively clip the wings of unbridled greed. They sat around as President Bill Clinton called for the end of the Glass–Steagall Legislation. As the majority remained silent additional doors to greed got opened. In all this, the lack of visionaries in Congress, even after 2008 lacked action when it came to protecting the citizens of the United States of America. So when I see the response from a member of congress “member begged him to examine his conscience“, I will kindly tell that congressperson to cry me a river and I’ll do so whilst playing worlds tiniest violin.

Congress is in an emotional state, suddenly crying for those who cannot afford it, yet what clear provisions in legislation has it given to the coffers of the United States? You see when we consider November 23rd (at http://www.forbes.com/sites/antoinegara/2015/11/23/pfizer-and-allergan-merger-ranks-as-biggest-ever-pharmaceutical-deal) and we see “On Monday, Pfizer PFE +0.10% and Allergan unveiled an all-stock merger that will allow the combined company, Pfizer PLC, to move its headquarters to Ireland and focus on corporate cost cuts“, which is set at $160 billion, you better believe that this impacts the taxability of that corporation by a lot. As far as I can tell from the surface, the total of pharmaceutical mergers LAST YEAR ALONE is well over 600 billion, so half a trillion dollars, all now going via Ireland. How much noise is congress making there? Or do these ‘respectful’ members of congress have a few too many friends in ‘those’ circles? Better to loudly focus on the one man out as Pfizer, Allergan and a few others. Can we all agree that the difference of 600 billion, being taxed at 25%, or being taxed at 17% is worth moving house over? You see, I love Sydney, but when someone tells me that moving will get me $48 billion, I will start singing ‘My heart is in Ireland‘ and I will enthusiastically pack my bags. You see, I can always get a second apartment in Buenos Aires and life of my self-made cash cow, getting me $50K a day and still allow me to double my fortune before I retire, making me live of $200K a day until I die. That is the track that Congress left open. This can be seen (at http://www.forbes.com/sites/antoinegara/2015/11/23/pfizer-and-allergan-merger-ranks-as-biggest-ever-pharmaceutical-deal), the quote there “move its headquarters to Ireland and focus on corporate cost cuts“, can be seen as ‘tax cuts’ and now guess what a chunk of those cost cuttings will go? You probably guessed it, the gents (ladies too) of the board of directors of Pfizer.

So, when I state to the person in Congress ‘go cry me a river’, I am being pretty serious. For the mere reason after all those hard words that the media published on how this was going to get stopped, on how some African American in a non-circular room (according to whitehouse.gov) decided to call for ‘Closing Corporate Tax Loopholes’ in July 26th 2014. I am guessing that this was unsuccessful as Pfizer basically walked out with well over half a trillion. The move started in November 2015 and the press has been absent of any failure to stop Pfizer from moving away from the American non-tax havens, towards the shores of paddy’s Irish Whiskey and the real tax havens.

Let’s be clear, that this does not excuse Martin Shkreli from the acts he is doing, or would it stop me from legislatively going after Martin Shkreli if I could. The mere reality is that it will be close to impossible to do because the US Congress had enabled much of what Martin Shkreli did, which is not what they intended to do, yet it is what is the non-emotional result, so in that matter ‘examine his conscience‘ applies to a much larger extent to Congress and its need to clean up the mess that allows corporate American to get around taxation. A mess congress might not be willing to fix for the simple speculation that when not re-elected those members of Congress need to rely on large corporations for their next pay check.

I am not the only one on this horse, as far as I can tell ‘the New Yorker’ and a few others are starting to realise that no matter how objectionable the acts of Martin Shkreli are, there is now a focal point change. This focal point is about how Congress itself is part of the problem, not part of anyone’s solution (at http://www.newyorker.com/culture/cultural-comment/everyone-hates-martin-shkreli-everyone-is-missing-the-point), how there is an unlabelled coffer with funds to buy items of survival for people who cannot afford it. The New Yorker states it as “mysterious corporate bargaining, and occasional charitable acts“, this includes (as I personally see it) Pfizer and their transplanted plus 600 billion, moving to Ireland.

So even when we consider the acts of Martin Shkreli to be vile and evil, how is the inaction of Congress not worse? How is it that we cannot condone the acts of a failed administration, whilst the acts of a person who was in it for the money from day one to be such a surprise?

A man that graduated from Bernard M. Baruch College of the City University of New York, who became a hedge funds manager, ‘evolved’ as an entrepreneur and who is living the American dream.

How are any of the unfolding elements a surprise to anyone?

 

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Show me the money!

That is what I wanted to shout out loud today, not because of a scene between Tom Cruise and Cuba Gooding Jr, but because of the story written by Larry Elliot (the Guardian economics editor). He is not wrong, probably with his insights and degrees he is more right than anyone else so why am I all up in arms about it? You see, if he is right then there is something extremely wrong with this world. Here is the crux, either he is wrong, or the bulk of the planet has become demented. What will it be?

Why do I consider this to be my view?

The view evolves when we consider the following aspects of the British economy. First there is “The budget deficit will be almost £100bn this year and is rising. It was supposed to be below £40bn. If the current Treasury chief secretary, Danny Alexander, is foolish enough to leave a little note for his successor, he will only need to insert one word into the one penned by Byrne: still” and “Britain currently enjoys the sort of growth rate that Germany, France and Italy can only dream about. The economy should expand by 3% this year, making the UK the fastest growing G7 nation. Jobs are being created at a record rate, a development that explains why Britain is proving a magnet for migrants from the rest of the EU“, we have seen this. Yet, as immigration is not capped to the extent it should be, jobs go to the cheap Polish workers, whilst we see a massive +50 workforce unable to get jobs, which we get from the Guardian (at http://www.theguardian.com/society/2013/nov/13/unemployment-fall-masks-jobless-over-50s). “Bennett is one of more than 400,000 people over 50 in the UK who is registered as unemployed, according to the latest official jobs data released yesterday“, you see, the mature experienced workforce is deemed useless in many areas and as such, the economy will take two hits. The first one is that these people in the end still cost money, in the second that as companies rely on cheap labour; we see that they go three steps forward, two steps back; it is getting them nowhere fast and at great expense too. So as those people have an income, the companies are just scraping by, having therefor the dubious benefit of living at tax level zero. That keeps the Osborne coffers (also known as the UK treasury) pretty empty.

Let’s take a look at some events linked here “Former BBC director general Mark Thompson has said sorry for the £100m failure of the BBC’s Digital Media Initiative (DMI)“, “Siren police IT project’s £15m failure a ‘debacle’” and not to forget “Abandoned NHS IT system has cost £10bn so far“. There is a level of sheer incompetence that is beyond measure. Yet, I think it goes further than that, I think that as areas have cut back and scrapped from the bottom of the barrel, we see cogs of non-comprehension that just twirl having no connection to any other cogs. Companies, which are no longer structured in the old ways, but still presented as such, they are niches into rooms, where only the manager has access. Like the American cubicles, that only one person oversees, absent of checks and balances, whilst the people no longer talk to each other, no clear communication. That represents the new era of work. The 50+ population have seen why there are issues with the cubicle approach and the manager who needs to get the task short-sightedly done is barring 50+ from being hired, this results in a sliding slope of minimised success.

What do they have to do with one another?

Let’s get back to the writing of Larry Elliot at this point “It took until 2013, however, for the level of output to get back to its pre-recession level, the slowest recovery of the post-second world war era. Osborne thought the economy would cope with austerity better than it did. He underestimated the impact of higher VAT and cuts in spending on growth. The chancellor thought his tough deficit reduction plan would boost growth by generating more confidence in the private sector that the books were being balanced. He was wrong. The upshot was weaker growth, lower than expected tax revenues and higher than expected borrowing. Half way through the coalition’s term in office, Osborne abandoned the idea of sorting the deficit in one parliament, and reverted to a more modest plan akin to that drawn up by his predecessor, Alistair Darling

The crux is “The upshot was weaker growth, lower than expected tax revenues and higher than expected borrowing“. I think that it is not entirely correct! Yes, Elliot writes the truth, but behind the curtains we see projects failing due to bad decision making (like the headlines mentioned earlier), in addition we see mergers of an unparalleled size “The chemist chain Boots is being sold to the American retail company Walgreens in a £10bn deal that is delivering a huge pay-day for its private equity owners“, which sounds nice, but how does that fill taxation coffers? It does not!

Corporate choices are made to avoid taxation like “U.S. Treasury Seen Loser in Tax-Avoiding Pfizer Move to U.K.” is at the heart of the second tier of failures. Not a failure by George Osborne, but a failure by their corporations that bleed nations dry, whilst not being held accountable, there the nations have failed themselves by not alter the proper legislations to avoid these acts of non-taxability. Whatever happens next will happen too late, the coffers are empty and those who walked away will do so in non-taxable luxury for the rest of their lives and the lives of the next 3 generations of their family to come.

The next part has a few issues (none of them are Larry Elliot) “The foundation notes that two-thirds of people who have moved from unemployment into work in the last year are paid below the living wage, the average self-employed person earns 13% less than they did five years ago and there are around 1.4m contracts not guaranteeing a minimum hours. Over half of them are in the lower-paying food, accommodation, retail and administrative sectors” Many of these lower paid jobs are all about areas where we see high rent, a massive drive to turn around orders and well above counted hours are needed. Life in London (as well as in Sydney) has become a life not unlike hyenas. These bosses are trying to stay afloat, which they do by hiring the weak, the cheap and the manipulative. One waitress mentioned this in a forum “Now I understand I am competing with people on the dole who can be near enough forced to work for free but it still sounds a bit shady“, the mention has bearing, as people are pushed more into unpaid extra hours, less rights, less options and less energy, we see a community that has devolved from symbiotic into parasitic, with only one winner in the end, the landlord!

Both the UK and Australia have been unwilling to deal with this entity, leaving the people at large to fend for themselves without any support.

The next part is a statement of fact, there is nothing against it in any way “If it is taking longer than expected to knock the budget deficit back into shape, the same can be said of Osborne’s other objective – to boost exports from a re-invigorated manufacturing sector so that Britain once again pays its way in the world

How to go about it is at the heart of it and several options are open as they always are, but consider that out of a dozen avenues, one is a solution, three are deadly and the rest tend to have a costly non solving effect. Several parties in play, not Just George Osborne, but in that same view, Alistair Darling and Gordon Brown all had the same flaw (as I personally see it). Instead of finding a solution that is a mere band aid, they all failed to seek the solution which had the visionary idea to include the next generation. I had that idea on two instances; the one that matters here is the article ‘What’s in a health system?‘ on June 29th 2014, where I state “When people ask which company will do this, the answer should be ‘None!’. The UK is filled with universities, some of them regarded as the most prestigious and brightest on the planet. Consider that most IT people, might claim experience, yet their drama skills are the only ones that improved for the most, is it not up to the Universities, those who are introduced to the newest ideas, design a solution that would make the work of the doctors and nurses at the NHS better, slightly more efficient and a truckload of less hassle! Is that such a tall order?

Like a regional solution for a independent Scottish IT environment, the visionary approach is to bring this to the universities, to develop a new system, not just a mere frame that goes on top of something else, but an actual new system, LINUX based option, a security enhanced LINUX for healthcare, one that is designed, not for 2016, or 2017, but for the next generation. Why not give the universities access to design their new future, not leave it to these current so called executives that waste up to 20 billion not delivering anything. That visionary approach is missing and it could be the death of us all (UK and Australia alike), we have so many similar issues, why not tackle them together, open up avenues that have never been considered. If you want visionary, then look at the Netherlands, they decided to change the bicycle lanes into solar panels, do you have ANY idea how many bicycle lanes the Netherlands has? It is actually a visible percentage of that nation’s surface. Now, they decided to give it a second function, which means generating electricity, without needing any space at all, illuminating the bicycle road through fluoresces, making it safer at night. They decided to attack road safety and energy issues all at the same time. That is the level of innovation we need to see, preferably without spending another 20 billion pounds. So how about changing, or better stated evolving universities and giving them a real hand in innovation and solving future problems we have ignored and left dead for granted (like the NHS).

The last part is seen here “Ed Balls, the shadow chancellor, said: “I am not that bothered about being behind on economic competence. In opposition, we are always behind on economic competence. Brown and Blair were at this point before the 1997 election. “I would rather we were further ahead in the polls but the Tories are leaving it a bit late for a feel-good surge. That’s why Cameron is talking about red lights flashing on the dashboard. Maybe he thinks he can scare people into voting Tory.”

I disagree, Ed Balls needs to get scared shitless real fast! George Osborne needs to do something similar! Economic competence is not something that is behind, the indicators are that they are close to non-existent. As numbers are hidden behind the statistics of ‘% of GDP‘ we are diluting ourselves that we have a handle on things, once the message is that the total debt has decreased below 750 billion, we have an actual message, but for now, that 25% decrease is nowhere in sight. Life in the UK is all about meeting the payment of the interest debt, whilst none are tackling any solution regarding the total debt for the future. That danger has been voiced by several players all over the field. The message now is that ‘Investors Underpricing Risk May Threaten Growth, IMF Says‘ (at http://www.bloomberg.com/news/2014-09-17/investors-underpricing-risk-may-threaten-growth-imf-says.html) as well as ‘Flug Flags Underpriced Risk as Investors Drop Corporates‘ (at http://www.bloomberg.com/news/2014-09-30/flug-flags-underpriced-risk-as-investors-drop-corporates.html), which gets a punch from today’s news ‘New York Hops on $15 Billion Israeli Corporate Bond Boom‘ (at http://www.bloomberg.com/news/2014-11-30/new-york-hops-on-15-billion-israeli-corporate-bond-boom.html). Like the housing in Hackney through Westbrook Partners and Round Hill Capital in the Netherlands, we see again a change in markets (like they always will), but this is different. Like Greece (again) last week with “A Greek official says the country is under pressure from rescue creditors to impose new austerity measures to resolve an ongoing budget disagreement worth a reported 2 billion euros ($2.5 billion)” (at http://www.cnbc.com/id/102222375), we see a market that keeps on getting pushed whilst there is no money left. By the way, those two players (Westbrook Partners and Round Hill Capital), did you consider combining these facts?

Have you considered when Westbrook goes market value and they merge with 2-3 other players (perhaps Round Hill Capital as one of them), when they merge, how much taxation will be missed out then, also, what danger will these tenants be placed in at that point?

So back to Greece and their dwellings, Greece should both be dissolved and offered to Turkey (just to make it sting a little more) or they need to clean up their act, including dealing with these massive strikes. Let’s not forget that Greeks themselves did this to Greece (partially through Goldman Sachs). We see cogs of greed interacting, finding new connections not to be held accountable, whilst its population gets the bill, blaming Germany for all of this. In that same light we see how we are now confronted with underpriced risks. So, not unlike the 2008 crash with all these “sub-prime” borrowers and bailing on 8 trillion, we now see governments trying to intervene by ‘forcing’ banks to make low cost loans to the underprivileged “sub-prime” borrowers, trying to create a fake boom, whilst at the same time, they have created a more likely than not risk that it will only explode in their faces, whilst imploding their economy (this is as I personally see it). Here in the end, we see that the bank wins no matter what, either the government pays them, or they just own it all. Like the landlords of London, it will destroy the quality of life for more and more people, whilst not showing any resolution in solving the actual problems.

This all comes together when we consider the IMF part on underpricing risk (mentioned earlier), there we see the part that is truly linked to all our woes: “Policy makers from the Group of 20 nations meet this week in Cairns, Australia, to discuss ways of boosting global demand. The Fed today maintained a commitment to keep interest rates near zero for a “considerable time.” At the same time, Fed officials raised their median estimate for their policy interest rate at the end of 2015 to 1.375 percent, compared with the 1.125 percent estimate made in June“. The crux: “ways of boosting global demand” it is at the heart of the failures we see. It is worse than bad marketing. The last thing we need to do is boost demand. We need to resolve debts. Yes, the US wants to see demands boosted, as it was one step away from bankruptcy 5 steps ago. They are trying to bluff into a new era of not being dead, whilst they have been unsuccessful in dealing with their debts, having no solution and even less options. We must find another way. If the Netherlands, one of the smallest nations in the world can turn around an age of innovation to their advantage in a novel way never seen before, then so can we! If you wonder how this linked, then consider how their solution can become a new era of energy independence all over South America, parts of America and all over Europe and Africa. Solar panelled roads, a patented solution that can change the face of the earth in one mere step. Once the high pressure solution is done for cars, we will see a new era of energy. Not bad for a place that is famous for wooden shoes and a leaky dike! So where are we in the Commonwealth? Where is our innovation?

In the end Larry Elliott spoke the facts, the truth and wrote an excellent article, I just disagree with the views they link to, in the end, it might be me who was wrong and it is all in the eye of the beholder!

In this age of debt, innovation and Intellectual Property are soon to become the only currency that will have any true value! The Commonwealth needs its own share of those, less it becomes as desperate as America currently is.

 

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The Illusion of control

It is three days after writing ‘Concerning the Commonwealth!‘, I stand by my piece. I think that the Commonwealth is facing increasing issues all over the field and as the numbers go up and up and up, healthcare will take a centre seat in a diminishing population of workers, which by the way include issues that will hit Australian shores too. Today (at http://news.sky.com/story/1287088/government-has-lost-control-of-the-nhs) we get to see more about the NHS, the mention of a 3 billion pound fiasco, which gets attached to the name Andrew Lansley, who is currently Leader of the House of Commons. He is also behind the Health and Social Care Act 2012, which is regarded to be highly controversial. However, before we go into any controversial parts, try finding a document called ‘ABPI UK NHS medicines bill projection 2012 – 2015‘, it is a PDF file (the Google link was too messy). There is a massive revelation on page 5, which diminishes a bible chapter with a similar name to a mere Paddington bear story.

As we ignore earlier mentions of a shake-up gone awry at 3 billion and mentions of an IT structure at the price of 10 billion that never worked, here we see that over the term 2013-2015 the use of brands go up from 14.2 to 15.5 billion, yet generic medication needs only rises from 3.2 to 3.9 billion. The interesting part is that even though there is still a brand growth, the bio-similar mention (generics) go up from 134 to 328, so there is more than 100% growth in change to generic medication, whilst the cost is still growing steadily on both sides (generic versus brands), what would the brand side have done if the generic side did not exist?

Three days ago I was extremely outspoken in regards to the need to get the NHS costs down. It seems that the search for generic alternatives is taking a backseat to other options. In an age of finding ways to make ends meet, the Health and Social Care Act 2012 has no space reserved in regards to the need for a stronger presence of generic medication.

When we look at:

233 General duties
(1) In exercising its functions NICE must have regard to—
               (a) the broad balance between the benefits and costs of the provision of health services or of social care in
               England,
               (b) the degree of need of persons for health services or social care in England, and
               (c) the desirability of promoting innovation in the provision of health services or of social care in England.

Why was the following not added?

                (d) the choice of generic medication where possibility for a responsible health care alternative warrants it.

Now, I will be the first one to admit that my choice of words is not the best one, but it seems where it is known that generic medication is such an important part for the survival of the NHS, that no mention at all (as far as I could tell) seems to raise a few more questions. Key message 4 on page 11 of the PDF shows exactly the part that matters: “Nine of the current top 20 selling brands lose patent exclusivity between 2012 and 2015” and when we consider the growth through bio-similars, we see that the right path seems to be taken as we read the numbers from the office of health economics. So, there is a path to better growth through managed costs (to some degree), the question becomes, why is this report quoting Jane Ellison as secretly taped? More important, why is Sky News not giving proper light to the NHS issues as they are (to a small extent) resolved? Why are they not taking a look a Professor Adrian Towse, Jon Sussex, Lesley Cockcroft or Martina Garau. I would think that the latter two as statistician and economist might be able to light a candle in the tunnel of ambiguous ‘tell tailing’ darkness ‘some’ are sailing.

None of these matters are coming to light at any stage. Even the Guardian on April fool’s day, did little more then http://www.theguardian.com/society/2014/apr/01/health-service-biggest-challenge-history-nhs-boss. I will admit that the article of the Guardian was decent, yet the quote “the NHS is facing a perfect storm of rising demand, funding pressures and worryingly low staff morale“, no matter how true, seems to be about the hardships (which remain true). Yet the information that the Office of health economics seem to have is escaping these Journo’s of bad news writings. Slide 13 of the initial PDF shows an even stronger view on how the UK is getting by, whilst the US is facing an overall hike from 176% to 281% compared to the UK index, Only Spain, Finland and France were barely better off. That part remains in question when we consider their population, if the results was correctly weighted (small oops on that slide), then the pressures for patent change from American shows just how desperate the American position is, which is shown even stronger on slide 6 when we see just how hard medication hits both Japan and USA as they spend well over 2% of GDP there, whilst the population of Japan is twice that of UK and the population of the USA is set at well over 400%. These slides will also leave is with other questions in several regards, yet the initial positive view is not reverberated over the press sites, or by the UK journalists. It seems to me that the information by certain newsgroups, especially in the LACKING sight on the importance of generic medication leaves us with questions. However, the Guardian was all over the business side of Pfizer trying to take over AstraZeneca. Did no one properly wonder why they were willing to dish over 69 billion? When did a US company EVER spend such an amount unless they knew that they would end up with double the amount? When we consider those events, we should wonder why the papers aren’t a lot more outspoken in regards to informing the public.

Even if this was all not true, don’t you think that the press would (should is a better word) have been all over the members of the Office of health economics I mentioned asking them the questions I am voicing and a few more after that? Is the silence of the press not deafening? The late April article in regards to Pfizer – Astranezeca headlines as ‘Pfizer refuses to guarantee UK jobs if AstraZeneca takeover goes through‘, which should make us wonder whether this is about income, jobs or patents. Would that takeover stopped any patents, or at least delayed them? If many patents have 1-2 years left, why pay that many billions, which information was kept hidden from us? It is the quote from Pfizer CEO Ian Read that states “The combination of Pfizer and AstraZeneca could further enhance the ability to create value for shareholders of both companies and bring an expanded portfolio of important treatments to patients.” This is a fair, honest (to some degree) and clear message. It is about the shareholders and the message that these billion will come back to ‘us’ and then some. This is clear business, I do not object, yet the overview for the UK? What will it cost them besides jobs? We saw little of that and the NHS has been played like a piñata donkey for a little too long. This is not me stating that the NHS is okay. Actually it is far from that, it is about getting the proper illumination on events, which does not seem to be happening either.

In the end, the quote in the Sky News article “A spokesman for the Department of Health told Sky News: ‘Giving operational control for the day-to-day running of services to doctors was the right decision but we’ve always been clear that ministers are responsible for the NHS’” might have been a correct one, the added information could have been a lot more insightful. When you Google ‘Office of health economics‘ you will not find any links to any newspaper, which is puzzling when you go to the Office of health economics and look at some of their publications. If I would add one more ‘light‘ remark then it would be that the members of the editorial and the policy board of the Office of health economics seem to have more degrees then a Kelvin scale, making them in my mind an essential source of health information for any journalist.

So where are these articles informing the public?

 

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Concerning the Commonwealth!

There is no easy news. The Commonwealth is having several issues that are not easily solved. There is always blame, but who to blame and more important, will it get us anywhere to begin with? I also believe that the Commonwealth has its share of solutions, but in that regard we will have to make some drastic changes. Some will be good, many will not be good and a lot of them will have to be different.

It is the last one that is likely the strongest salvation we might hope for, but we can no longer think the way we are, as we currently end up planning to go nowhere.

First of all, one member will need to step up to the plate and the others must protect this part. They started being regarded as a simple land, this land became a colony and later part of what would be known as the British Empire. It became independent and it is now a Commonwealth nation. Now, India must step up to the plate and become a Commonwealth leader. We (Australia, Canada, New Zealand and United Kingdom) must stand firmly and strongly next to India.

India has basically become the world leader in generic pharmacy and many are so eager to take up the Trans Pacific Partnership that we ignore the part that this US and Japanese conclave is not just about ‘trade‘ or ‘fairness‘, the indications are that it will give even more power to the US companies. A level of power they should not have to this degree.

They were complacent; they were lazy and became the facilitator for flaccid economists (yes, that was a Viagra joke).

If we accept a Canadian source, we see the following: “One proposed TPP provision would require governments to grant new 20-year patents for modifications of existing medicines, such as a new forms, uses or methods, even without improvement of therapeutic efficacy for patients. Another provision would make it more expensive and cumbersome to challenge undeserved or invalid patents; and yet another would add additional years to a patent term to compensate for administrative processes. Taken together, these and other provisions will add up to more years of high-priced medicines at the expense of people needing treatment, who then must wait longer for access to affordable generics. Meanwhile, provisions in the proposed investment chapter would give pharmaceutical companies the right to sue governments for instituting any regulation that reduces their expected profits, using private tribunals that circumvent a country’s judicial process.” (at http://www.msf.ca/en/article/negotiators-must-fix-most-harmful-trade-pact-ever-access-medicines).

This is not what we signed up for in any way shape or form (nor should we ever). It had been stated in several sources that Australia was one of the least objecting partners. The fact that this would be done and through this ensure the consequence that a large part of the Commonwealth will then have another decade of expensive medication to look forward to is just too absurd. when we read the additional quote “U.S. pharmaceutical company Eli Lilly is using similar provisions in NAFTA to demand $100 million from the Canadian government for invalidating one of its patents, claiming, among other things, that the company’s expected profits were “expropriated” when the patent was overturned“, we see a pattern where the use of such a partnership is not a partnership at all, it feels more that America is applying republican dictatorship, through arranged courts in order to thwart almost two decades of laziness and stupidity. Them overspending their treasury by well over 17 trillion is not helping them either and is at the centre of the current push we see.

India is proving slowly to be the leading authority on generic medication, even now in the last two years we see players like Kroger, Axium, Pfizer and Wyeth in multi-billion dollar mergers. They are setting up shop to have their own corners, which will grant them stability and income for the next decade. Guess what! We cannot afford that. The UK NHS is in shambles, healthcare all over Europe is unaffordable and the other Commonwealth nations see the cost of medication go up and up and up. These costs forced upon governments are the new way to get the maximum revenue, whilst in the end not being taxed on it (or for the ultimate minimum). India as a Commonwealth leader in generic medication can step up to the plate. We will not go to India, no, it seems that under these conditions India comes to the UK, Australia and Canada to build their places for generic medication to be produced. India would become a leader here. I wonder if President Pranab Mukherjee had ever envisioned that, to visit the other nations, including the UK as a leader, paving the way for a solution to the other heads of states of the Commonwealth.

If you think that this is ludicrous, then think again. In the Independent we see at http://www.independent.co.uk/news/uk/politics/government-accused-of-losing-grip-on-nhs-as-58-failing-trusts-now-have-241m-debt-9544181.html the following headline “Government accused of ‘losing grip on NHS’ as 58 failing trusts now have £241m debt“. Australia is feeling the pinch of healthcare hard and Canadian healthcare will soon be a sizeable chunk of a 2.2 trillion dollar debt. This must change!

We need to pull our resources. We need to think of other ways. Medication from India is only a first step. How about the option for healthcare graduates to work off their debts in a few years overseas in the UK or Canada? They’ll have a place to live, some income and over a period of 5-10 years (depending on the degree) their debt is settled. These are but a few of the options we can resort to. The old ways are not working and the few that do are drowned into costs of a faltering IT system. We need to group ourselves together and build a new system on different scopes. The old way has not worked and the more we delay the deeper the debt becomes and the less solvable the problem becomes.

This is no longer Labour versus Conservatives; this is now finding a way to avoid deaths through inaction. I agree that simply starting something new is not the way to go, the Labour IT systems of the NHS have proven that ten billion pound invoice, and yet doing nothing is another non-option. The heads of the Commonwealth must come together and find surpluses on one side to stop drainage in other sides. We are one commonwealth and we must save us! From there we will have the stability to come to the European aide, especially with affordable medication.

This side was ignored by the USA as the cash was flowing so nicely. Guess what, we are all broke and we need to find WORKABLE alternatives. The ones we claim to have at present do not work!

Let me also take a step back. This is not an anti-American thing, they are welcome to be part of this (even as a non-Commonwealth nation) and the issue is that they have been blocking affordable solutions through the FDA for a long time. What was good for Canadian was apparently not good enough for Americans and cheaper medication. The information from RxRights.org stated: “Threats to Economic Creativity and Theft of Intellectual Property Act of 2011 (PROTECT IP Act). This new act moves far beyond COICA’s blacklist of pharmacy websites. It would categorize all non-U.S. based online pharmacies as a risk to public health. It would require that Internet service providers and search engines block these sites that credit card companies stop their payments. Even worse, under this new law, Canadian and international pharmacies would be prohibited from defending themselves against those who shut them down“. This situation is even more ridiculous as this is instigated by a president claiming to bring ‘affordable‘ healthcare. If that were true, then why not let people find the cheapest option? Is a Canadian less than an American? No, it is all about a Democratic party with minus 17 trillion and they are firmly in the pockets of big pharmacy! That is the part and the Commonwealth cannot afford this shallow minded greed based approach. We must entertain the best option for the Commonwealth. As General Motors left Australia for cheaper options in China, so we must find our cheaper options in India and the TPP will not help us here. Signing it would be a massive mistake. By the way, all them Americans spamming my email for cheap Viagra was legal? Interesting double standard the FDA has.

We can see more in regards to Indian patents (at http://timesofindia.indiatimes.com/home/stoi/all-that-matters/Changes-to-Indias-patent-law-will-impact-prices-of-life-saving-drugs/articleshow/32519848.cms), of course, as it is the Indian Times, it would be all in favour of India, but are the facts incorrect? That part is in debate on several issues. One question that has not been answered over a term of at least two years is “Access to Medicines – Will the Trans-Pacific Partnership FTA allow governments to produce and/or obtain affordable, generic medications for sick people?

That is not just the question which is not answered; it is one if the questions that seem to be actively avoided whilst the TPP is continued behind closed doors. The response from Doctors without borders is “Governments have a responsibility to ensure that public health interests are not trampled by commercial interests, and must resist pressures to erode hard-fought legal safeguards for public health that represent a lifeline for people in developing countries.

This is at the heart of the issues for the Commonwealth, because if these steps stop affordable medication, then there will be no healthcare at all, the Commonwealth nations will be broke as they are decimated through age and sickness, after that what will be left of Western Europe?

It is only a first step; if we look at the NHS, then staffing and expertise are also a worry, which is by the way a worry in many Commonwealth Nations. Most of these nations have well over 5% unemployed; can some not be re-schooled in the healthcare sector? In the UK many IT trained staff are without a job, can they not help rebuild the NHS IT systems? Too many issues that are overlapping and someone threw away 10 billion. It is time to rewrite the tactical guide and start building a solution that will work. Sitting at home will not help anyone, not even one’s self.

 

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Year of the last Euro?

Wednesday’s news on ‘George Osborne lays down ultimatum‘ seems to have remained a little quiet. So, was it all hot air, or are there silent runners under the waterline? The situation reminds me of a poster I once saw. It was a photograph of water, with the by-line ‘Submarine racing, a spectator sport!‘ I thought it was quite funny. Whilst scanning for the latest on this event, I find several people mentioning it, but no real update for a day. The Guardian article was quite informative (at http://www.theguardian.com/politics/2014/jan/15/george-osborne-reform-eu-quits-tory-dismantling ). However, I regard the BBC version of it a little better (at http://www.bbc.co.uk/news/uk-25740462)

The BBC article does however have two items I do find interesting, but they are slightly debatable.

The first one is “I believe it is in no-one’s interests for Britain to come to face a choice between joining the euro or leaving the European Union.” Why is it one or the other? In my view, the only part keeping the EU from collapsing is because the United Kingdom DID NOT embrace the Euro coin. I will get back to this a little later.

The second part is “The 28-member group also had to do more to ensure economic competitiveness with rivals like India and China, he added.

I feel that the UK could become a lot stronger if the Commonwealth brethren embrace each other as family and as mutual protectors. This means that the UK should become the centre force in group that includes Canada, Australia, New Zealand and India.

In my view, the issue is that Chancellor Osborne is too adamant to sing-a-long with the American tune. I view this like a game of musical chairs. An iteration game of leave one out! The problem is that this game includes one chair that is only meant for the rear end of America, so it will always have a chair to sit on. They should not even be included in this game, but there you have it, for some reason they are part of the EU game.

So let us get back to the first part as promised. The EU (or EEC if you prefer), has 28 nations. In the GDP rankings the UK is at number three. The issue is that the top 7 has Germany, France, Italy, Spain, the Netherlands and Sweden (these 7 are 79% of the entire EU GDP). Only Germany is in a good position, The Netherlands is on the thinnest ice imaginable, whilst Sweden in its economic state seems to remain skating on the ice it has (for now). The rest has gone through the ice and are in a bad place. So, why should the UK risk it all and add themselves to a currency that is drowning itself because the local politicians refused to stop spending when they could, they kept on spending when they should have stopped and now they are in that bad place. Many should be thankful that the UK and Sweden are not part of the Eurozone at present.

In addition, Greece, according to Finance Minister Yannis Stournaras does not need any more austerity (Nov, 2013). Spain stated “The budget is based on a forecast that the Spanish economy will grow 0.7 percent next year, up from the government’s previous forecast of 0.5 percent.” (at http://www.nytimes.com/2013/09/28/business/international/spanish-budget-avoids-austerity-measures.html). Yet Bloomberg noted on September 5th “Spain’s bid to meet its budget-deficit target for the first time in five years is running into trouble, fuelling concerns that increased financial stability is masking deeper economic problems.” So, what is actually happening here? Are we witnessing new waves of creative accounting?

In light of all the bad news, it must also be noted that France is at least still fighting to keep the austerity in place, even though President Hollande is slowly becoming the least popular president in French history. I applaud him for standing firm and I do hope he will not share the fate of Louis XVI (a one-time treatment at ‘La Guillotine’). Italy is for now also on the Austerity track, but internal developments are not good and there are signs that Italy cannot continue the course it currently is going. So out of the 6 (not including UK) one is doing decently well, two are on the edge and the rest is for now in a bad place. This is not the time to switch currency, especially as the UK is slowly recovering, to add their heads to a block whilst the Axeman is spending the night away. It is more than just bad politics to do so.

So, we see percentages all over the place, but in the end, what does it mean? Well, let’s take a look at the numbers (as far as I found them, and a stern warning, the numbers are unverified and not from the best sources). In my defence, the numbers do not seem to be clearly presented anywhere.

Sweden, the smallest and not in the worst state is a little over 1 trillion debt at over 180% of GDP, Spain at 2.3 trillion, which is over 150% of GDP, Italy at 2.4 trillion, but interestingly seems to be at almost 100% of GDP, the Netherlands at 2.6 trillion, however the numbers I found place them at almost 350% of GDP, France is at a whopping 5.1 trillion and like Sweden around 180% of GDP, lastly Germany owns over 5.5 trillion at a ‘mere’ 140% of GDP.

Whatever some of these so called economists are trying to tell you (they are hoping you do not revolt against additional borrowing), the current nightmare is far beyond the issues you can imagine. the populations of Sweden is almost 10 million, the Netherlands is at almost 17 million, Spain 47 million, Italy 60 million, France 66 million and Germany at well over 80 million. You see, in the end, the taxpayer gets to deal with these trillions. So, a large nation might seem safe, but consider France, where austerity seems unbearable and with that sizeable population, the debt comes to over 74,000 euro per person. The average income for a Frenchmen is almost 32,000 euro a year (before taxation), which makes the debt more than 2 annual incomes from every implied French resident. So, when people get angry, they need to get angry at previous government administrations that had spent to such a degree that the current debt is unbearable! (Something I have mentioned in several previous blogs.)

This is also the danger of UKIP! I am against the UK moving out of the EU for several reasons, yet the changes could be forcing the current British government to consider the one step that UKIP desires most, what a mess that will make!

Part of the issue I am struggling with is actually in another article in the Guardian (at http://www.theguardian.com/commentisfree/2014/jan/15/europe-welfare-spending-george-osborne). I do not agree with parts of it, but the article is well written and the writer Alex Andreou does set out his position very well. So, please do read it for yourself. My issues is with “The fact that as a continent we have embraced values of social security and solidarity, a high standard of education and health for all, and dignity in old age, should be celebrated.” I am all for that and I am in favour of that too, yet governments all over Europe (including the UK) have overspend by such a massive amount that cutbacks in these times are extremely painful. I get it, but previous administrations lived under some umbrella with the picture of a sun, which they took as an eternal summer! Instead of caution, they ignored basic rules and just went all out on a spending spree. Now that all the money is gone, the coffers are instead filled with ‘I OWE U’ notes. When every nation spends more than they are receiving, no one will have any money left, yet governments started to borrow to one another. So, those in debt were borrowing massive amounts to one another, even though no one had any money, is no one catching on? This is my issue! I am all for social security, but if we do not have the money, how can we get it done? In addition, Latvia, the newest member of the Euro states (at http://www.bbc.co.uk/news/world-europe-25567096 ) “The former Soviet republic on the Baltic Sea recently emerged from the financial crisis to become the EU’s fastest-growing economy.” Is that so, in that regard we can read the following at http://www.baltic-course.com/eng/finances/?doc=83279The state budget is projected to have a deficit in 2014, 2015 and 2016, according to the medium-term budget framework that Saeima approved in the final reading yesterday, informs LETA.” so the newest member already goes into deficit from day 1? This is quoted in the following way in the article “The medium-term budget framework is based on the following GDP growth forecasts: 3.7% in 2014, 4% in 2015, 4.1% in 2016, 4.1% in 2017 and 3.9% in 2018.” so already above the limits as stated by Brussels. Compared to the top 7, the amounts they refer to seem peanuts in comparison (al 35 billion of them), the issue is moving forward and gaining economic strength, not add to the massive debt. As I see it, the Latvians have plenty to worry about and in my view; the UK and Sweden would remain well warned and not join the Euro.

Time to get back to issue 2!

I stated earlier “the UK could become a lot stronger if the Commonwealth brethren embrace each other“. As the issues evolve, the Commonwealth should revert to a new British Empire, but only in an economic way (undoing the work of Ghandi looks wrong on way too many levels). One of the big dangers is the Trans Pacific Partnership. Australia and New Zealand are in my view to eager to add their names to an approach that is all about keeping America in ‘power’! Why do I have this view?

There are several articles, but at http://www.businessspectator.com.au/article/2014/1/14/technology/tpp-trades-us-clout-expense-innovation we see some of the issues that will bug many in the Commonwealth.

The quote that starts to scratch the surface is “in 2009, total patent applications made through the patent co-operation treaty process from applicants in these nations also exceeded those from North American applicants for the first time.

This is the fear America has, which is why they are so eager to get all the autographs. You see, as I see it, Americans became (or were in the eyes of some) complacent, lazy and greedy (the American industry, not the people). For example, as I see it, the IT industry took a page from the arms industry and stopped true innovation and replaced it with iteration. A disastrous step as you will soon see. The powers at IBM and Hewlett Packard, as I see it, decided to listen to military giants like Raytheon and Northrop Grumman. So, America went from the innovation based, which brought the leaps from the 386 through to the Pentium II, and we ended with iterations like I3, I5 and I7. Newly coated computers, which now move forward in stepwise motion. The issue is that Asia had a huge delay keeping up and this all changed as their comprehension improved, in addition, it is for technology insiders relatively easy to learn the path of an iterative technology. This is the first step of fear as America is now facing it. Asia has its own group of innovators and in my personal view the passing of Steve Jobs took away one clear path of innovation. When Apple moves in that same iterative path, the last true American innovator will be lost! Now Asia has a massive advantage and as such America needs to clamp down on whatever they can, with the massive debt and no clear future path their world will all be about Intellectual Property! The article touches on it with the following quote “But what if the real motive of one or more parties was to isolate, control, enrich, deprive, penalise and stifle? In effect, to put a toll on the drawbridge.

This is at the centre, but not at the core of all this. That is why we see the mention that India is seen as a competitor, because for America, they truly are the new competitor. That deadly error was made by the American administration in 2011. Forbes tells us about it in http://www.forbes.com/sites/henrychesbrough/2011/04/25/pharmaceutical-innovation-hits-the-wall-how-open-innovation-can-help/. They published it in April 2011. That story shows only part of it. The quote “The patents granted to these drugs last for 20 years from the date of filing, and since most drugs take 7-10 years to get to market, the pharma companies have known that this moment was coming for the last 10-13 years. It is the logical outcome of a deeper problem, which is that pharma R&D spending has been less and less productive for many years.” gives us two parts. One is that there are clear indicators that the pharmaceutical industry has been working on borrowed time. The second is that the ROI has been dwindling down and that these corporations will face the horror of generic medication as several patents hit the end date in 2015. That means in just over a year, the largest maker of generic medication (India, in case you were wondering) will get to have a go at several extremely lucrative prescriptions. Perhaps you remember news messages on how the FDA was so against Canadian medications. I personally considered that entire issue to be a joke, but the underlying horror for America was already there. I mentioned in other blog articles on the issues I have had with the Dow Jones index (‘Start making sense’, 11th march 2013). Now consider that the three large pharmaceuticals Johnson & Johnson, Merck and Pfizer represent 10% (3 out of 30) of this index, so America is plenty nervous here. Now take into account that these three will have several expiring patents by December 2015 and that means that within months India could have a quality generic alternative, which is likely to be more than 70% cheaper. Now, be aware that a generic medicine is often less effective than the original. Still, the price difference is huge. It is not just the US; the UK has its own share of pharmaceutical makers, so the knife does cut in two ways in this case. Still, when we need to cut back again and again, India could be a good thing for the Commonwealth at large. So, even though some see the TPP as an option, there is implied evidence that the TPP could strongly block innovation.

How does this link to the Euro? No matter how we twist or turn it, the hard times America will face as it has been facing them for the last few years will intensify as innovation remains absent. That will hit Europe in several ways. The Netherlands already saw that as Merck shut down activities like Aspen Pharmacare. The intertwining of corporations on that level are all over Europe, and as such as American Pharmacies are hit, their European links will suffer a lot more because of it. So, yes, India is a competitor there, but the UK together with Canada and Australia could look for a cooperative solution with India and not see them as the competitor (as America currently does).

So is this all linked to the end of the Euro? Yes! It does however depend on the actions of the UK. If is stops membership, the run on the markets and the panic Germany faces could be catastrophic for the Euro, especially as Germany cannot rely on the pillars named France, Spain and Italy. The other nations are either too weak or too small.

Could George Osborne be wrong?

That depends on your point of view and your allegiance. The latter is implied as I noted the reference to the musical chairs with the one reserved seat. News messages like “the call to end austerity by ‘insiders’ from Brussels”. Yet, in the other light governments must reduce their spending and they need to get clever about it fast. The UK non-working military recruitment solution at 1.3 billion is just one clear example. Pretty much every EU country has its own skeletons. I see that the UK could be stronger as the Commonwealth nations take a route of preference to strengthen their economies, it is clear that such a path in Europe would remain stagnate until late 2015. That does not make George Osborne right, it only means that a European route might work, however it will be a long term path and switching to the Euro (at present) does not seem to be a stable solution for the UK to implement.

 

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