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December 31, 2004
I Hate To Say This...
But if I was a financial counselor, I could not recommend investing in pharmaceutical companies this year.
Why? Well, they are now in the culteral cross-hairs with several groups targeting them. This will mean depressed stock prices, but more importantly - investors will gamble less of their money into pharmaceuticals. This means less research and more small drug companies unable to raise the money needed to stay alive.
So who is targeting the pharmaceutical industry?
Some on the FDA staff & anti-pharmaceutical groups - You may have seen the testimony last month, a FDA staffer appeared before a congressional committee arguing that several drugs should be pulled from the market due to side effects. What you may not have seen was others, testifying before the same committee, disagreeing strongly with that staffer. What's the big deal you say? After all, we all want safe drugs! The big deal is that they arguing for more long-term testing and slowing the rate that it takes (now 5-10 years) for a new drug to come to market. Ours is just one community that would see more deaths due to these delays.
Lawyers - Many prominent law firms are sharpening their knives at the prospect of suing pharmaceutical companies. Ultimately this will cost the industry billions. Some of the law firms are funding groups that are mentioned in the last paragraph. This generates positive articles in the press and more sympathetic juries.
Michael Moore - It seems each movie he releases is more popular than his previous one. He has a strong fan base. He is also a master at generating publicity and his latest target appears to be the pharmaceutical industry. There are reports that he is now doing his on-camera ambushes at various pharmaceutical companies.
I didn't see his last film, "Fahrenheit 9/11" though I know it has its fans & critics, but let me tell you about one that hit close to home - "Bowling for Columbine". I live near Columbine High School and I saw his distortions. I would even call them lies. Some examples that I can confirm from local coverage: The killers didn't go bowling, the Lockheed plant makes rockets for satellites not WMD's, he lied about the plaque & the plane, and many who appeared in the film state they were deceived by him.
Having seen his work first hand, my belief is his pharmaceutical movie will be filled in a similar, misleading way. That can't be good for the industry.
Am I overly concerned? Maybe, but I don't think so. Pharmaceutical stocks dropped 10% in 2004 while the S&P 500 rose 9%.
Posted by Dave at December 31, 2004 05:39 AM
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