Monday, August 22, 2005

Merck Fallout

There are only few people like James Cramer (JJC) of who understand what is happening here with Merck. His two conclusions are:
- Merck is in much deeper problem than people realize and
- Log term drug makers in USA are in for some serious change.
He has been mild I would say so far. His last line is ominous – “It's funny, we have the most anti-tort lawyer president in history in office now, and nothing's happened to rein these guys in. What happens when we elect another president who simply couldn't be more antagonistic than this guy?” Just think of it. Whichever way you cut, America is simply incapable of getting a right balance between people’s life, their rights and drug makers’ interest of making money.
What will happen long term?
- First Drug makers will be very cautious in terms of marketing and advertising their products. Merck had been as aggressive as Drug makers have been so far. This does not work anymore.
- Next, the concept of Billion Dollars Drug or tablets would come under further attack. Drug as a “packaged product” may start to fade in USA.
- It may be give further fillip to turn health industry into service. Drugs could be open source or of minor consequences. Business proposition will be in providing service or custom build drugs with appropriate legal protections for the vendor.
All said and done, as JJC maintains; indeed there are some serious changes taking place in drug making business. He may sound too harsh or calculative; but that is the nature of the beast here. I would say he was been very decent and tries to be less cynical as much as possible.

Umesh Patil
San Jose, CA
August 22, 2005.

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