David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Pharma's Pricing Troubles Will Get Worse in 2017

    This article by Max Nisen for Bloomberg may be of interest to subscribers. Here is a section:

    A structural decline in U.S. pricing power is ominous for every pharmaceutical company -- particularly if it extends to brand-new drugs, or to areas, such as cancer, that traditionally have strong pricing power. Highly effective new cholesterol-lowering drugs from Amgen and Sanofi/Regeneron have had notably sluggish launches since being approved in 2015, as a result of cost-driven roadblocks to patient access. Meanwhile, the market for expensive, immune-boosting cancer drugs -- dominated by Merck & Co. Inc. and Bristol-Myers Squibb Co. when 2016 began -- gained a new entrant this year in Roche Holding AG. Pfizer Inc. and AstraZeneca PLC may join next year. Having five similar drugs on the market would make pricing pressure all but inevitable. These trends quietly gathered strength in 2016, and 2017 will give us more of a sense of just how far they will go. This, regardless of what Donald Trump decides to do, could well be the defining biopharma story of the year.

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    Indian Sugar Shortage Deepens as Cane Crop Set to Disappoint

    This article by Isis Almeida for Bloomberg may be of interest to subscribers. Here is a section:

    India’s sugar shortfall is worsening as disappointing cane crops boost the need for imports this season.

    Reduced cane supplies in the states of Maharashtra and Karnataka mean output will probably fall to the equivalent of 21.3 million metric tons of white sugar, according to Tropical Research Services, which advises several hedge funds on agriculture markets. That’s 4 percent smaller than forecast last month and 15 percent below a year earlier.

    The El Nino weather pattern that ended this year hurt cane crops in India, the biggest sugar-consuming country and second- largest producer. At the same time, the harvest in No. 2 exporter Thailand is running behind last season’s pace, helping tighten global supplies already forecast to fall short of demand.

    “Early reports from both the key Maharashtra state in India and also from Thailand suggest their cane crops could disappoint," James Liddiard, a partner at Agrilion Commodity Advisers LLC, said in a report Wednesday.

     

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    Musings from the Oil Patch December 28th 2016

    Thanks to a subscriber for this edition of Allen Brooks’ ever interesting report for PPHB. Here is a section:

    With the election of Donald Trump as the nation’s 45th president, there are signs environmental restrictions on fossil fuels will be loosened and more room will be made for fossil fuels. That will be a significant shift in the recent trends for environmental and energy regulation. Whether it significantly alters the current trajectory for the dirtiest of our fossil fuels – coal – remains to be seen. Clearly, short of an outright ban on renewable energy plants, the current backlog of new, cleaner power plants will not change, so our near-term energy mix will continue to shift toward more renewable fuels. The issue for the energy industry is whether the economic trends in place boosting renewable fuels are altered and slow down the pace of additions of new renewable fuel plants. That will partially depend on whether current renewable fuel mandates and subsidies are renewed once they reach their expiration dates, or even if they are outright cancelled early.

    At the present time, businessmen, energy executives and consumers are struggling to understand the true economics of electricity. Analysts have strived to produce cost estimates for electricity produced by different fuels in such a way that they can be analyzed on the same basis. Standardized cost estimates provide a means to assess the impact on different fuel sources of various environmental policies. The process is called levelized cost of electricity. This tool enables direct comparison of electricity costs from power plants fueled by either fossil fuels or renewables. One drawback from this tool is that it assumes every kilowatt of power generated has the same value to consumers regardless of when during the day it is produced. It ignores the reality that during summer days in the southern regions of the United States, electricity to power air conditioners in the afternoon when temperature reach their highest levels is of greater value to consumers than during the middle of the night when temperatures drop.

     

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    Africa's mixed political transitions in the 3 Gs: Gabon, the Gambia, and Ghana

    This article by Vera Songwe for the Brookings Institute may be of interest to subscribers. Here is a section:

    Ghana is the pride of Africa when it comes to democratic transitions. Once again, its most recent election has proven this point.  Despite the tense and intensely fought campaign both parties continue to pledge respect for the process. Indeed, there is much to celebrate around Africa’s leadership transitions, but much remains to perfect the process the continent over. This year many elections were held freely and fairly on the continent, and both incumbents and new leaders were elected to office—including Benin, Cabo Verde, São Tomé and Príncipe, and Zambia for example. And in an unprecedented move the President of Mauritania and Angola all declared they will not seek re-elections at the end of the term. A very positive and encouraging trend if the pronouncements come to pass.

    However, in a number of countries the old has not given way to the new, and the evolution of democracy is still in motion with too-often deadly consequences for the citizens in Burundi, Gabon, and the Gambia to name a few. These examples demonstrate that the concept of leadership transition has not yet been fully adopted. A number of lessons can be drawn from these latter experiences. The populations are increasingly more vocal about transparency of elections. Both sides incumbent and opposition have increasingly equal chances of getting their voices heard and results tend to be closer in these countries. There is still a need for vigilance, and the tendency to slip remains. Peaceful leadership transitions are not yet the norm.

     

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    The Chaos Theory of Donald Trump: Sowing Confusion Through Tweets

    Here is the opening of this article from The Washington Post:

    Donald Trump’s sudden embrace this week of a nuclear arms race — and his staff’s scramble to minimize the fallout — underscored an emerging modus operandi for the president-elect: governance by chaos.

    Since winning the election, Trump has seemed to revel in tossing firecrackers in all directions, often using Twitter to offer brief but provocative pronouncements on foreign and domestic policies alike — and leaving it to others to flesh out his true intentions.

    In the past week alone, Trump has publicly pitted two military contractors against one another, sowed confusion about the scope of his proposed ban on foreign Muslims and needled China following its seizure of a U.S. underwater drone.

    But nothing has created more consternation for many foreign policy experts than Trump’s assertion on Twitter Thursday that the country should “greatly strengthen and expand” its nuclear capability.

    On Friday, after his staff had tried to temper his comments, Trump doubled down — telling a television talk show host that in an arms race against any competitor, the United States would “outmatch them at every pass.”

    Trump has pledged to shake up both Washington and the world order, and boosters argue that a degree of unpredictability can be useful, particularly when it comes to foreign policy. But the mixed messages and erratic nature of his pronouncements have alarmed even some Republicans, who say it’s important to know how seriously to take the leader of the free world.

    “We’re just operating in this world where you cannot believe the things he says,” said Eliot Cohen, a foreign policy expert and former George W. Bush administration official at the State Department. “It will have large consequences for our allies and our adversaries, and it’s going to greatly magnify the danger of miscalculation by all kinds of people.”

    Trump’s team has struggled with the new resonance that becoming president-elect has given Trump’s Twitter habit. They have repeatedly said that his statements on social media do not necessarily reflect his official policy and have at times sought to play down the import of his actions.

    But Trump supporters say the rest of Washington is going to have to get used to his more freewheeling style.

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