Medicare Drug Plan: Which Big Pharma Wins?
Unique Medicines Will Do Well,
Crowded Fields Face Discounts;
A Boon for J&J, Risks for Pfizer
Come January, millions of Medicare patients will be eligible for prescription-drug coverage. The government estimates the coverage will cost $720 billion over 10 years, much of which will flow to drug makers.
"This is the biggest thing that has happened to the industry in the last 20 years," says Mason Tenaglia, managing director at the Amundsen Group Inc., a Lexington, Mass., consulting firm.
So, will this new flood of cash be just the tonic the ailing pharmaceutical industry needs?
Not at all, maintain the drug companies, which have played down the effect the Medicare drug benefit will have on profits. Peter Dolan, chief executive officer of Bristol-Myers Squibb Co., echoing comments by other pharmaceutical-company executives, says that for his company, "short term, the impact is neutral to negative," and "long term, it's negative."
Unique drugs that have a benefit unmatched by any other medication will be in greater demand, says Daniel Vasella, CEO of Novartis AG. Such drugs will get a boost because of new consumers who previously couldn't afford them. But makers of similar drugs within the same class will be forced to offer discounts to be included in the benefit plan.
So, for investors the question is, who stands to benefit once the Medicare drug benefit kicks in? Amundsen's Mr. Tenaglia says the answer is Bristol-Myers, Johnson & Johnson, Roche Holding AG and Abbott Laboratories, which have less than 20% of their drug portfolios at risk from generic substitution, as well as Novartis and Sanofi-Aventis which have a bit more than 20%. These companies make drugs that have less competition and higher markups, including cancer, AIDS and Alzheimer's medications.
Companies more at risk, Mr. Tenaglia calculates, are Pfizer Inc., Merck & Co., Eli Lilly & Co. and AstraZeneca PLC, which have more than 60% of their sales in classes built more with marketing muscle than product differences. These drugs include cholesterol-lowering statins; antidepressants; ACE inhibitors, used to treat high blood pressure; and proton pump inhibitors, used to treat stomach ulcers.
"These guys are now vulnerable to being squeezed by managed care" and the prescription-drug plans that will offer the benefit to seniors, he says.
So far, most investors haven't focused on the Medicare drug benefit. More acute issues are clouding the picture for the sector, such as Merck's Vioxx litigation, the patent challenge facing Pfizer's Lipitor and concern about potential safety hurdles to drug approval at the Food and Drug Administration. For the year, most drug stocks are flat or down anywhere from 3.1% at Johnson & Johnson to 16.3% at Merck. A few are faring better, such as Sanofi-Aventis, up 5.2%, and Astra-Zeneca, up 33%.
While drug companies still boast high profit margins, they aren't any longer the pricey growth stocks of old, but rather big dividend payers. Pfizer's stock now yields 3.1% a year; Merck's 5.9% and Bristol-Myers's 4.9%. Recently, the drug industry's trade group, seeking to deflect political heat over safety and aggressive marketing issues, put out a pamphlet emphasizing the industry's financial woes.
The Medicare drug benefit will affect some of the industry's most dependent customers: 91% of Medicare beneficiaries took at least one medication in 2002 to manage their acute or chronic health conditions, according to the Henry J. Kaiser Family Foundation. Of the 43.1 million Medicare beneficiaries in 2006, 29.3 million are expected to enroll in one of the optional Medicare prescription-drug plans next year, according to a Kaiser study that cited the Bush administration for those figures.
An estimated nine million Medicare beneficiaries lacked any drug coverage in 2001, U.S. officials said recently. Those people have been paying full price for drugs out of their own pockets. But once they get coverage they will likely buy more medicine. Medicare beneficiaries without drug coverage filled one-third fewer prescriptions than those who had some form of coverage in 2002.
And people with insurance often take newer, more expensive branded drugs, rather than older generic medicines, says Michael Krensavage, an analyst for Raymond James & Associates, who doesn't own any drug stocks personally. "People on expense accounts order room service," he says. "But when they travel on their own, they go across the street to the Waffle House."
The drug benefit could also spur expense cuts. Mr. Tenaglia says the current model for the drug industry's sales force "is about finding the doctors who write the most prescriptions. The new model will be about finding the states where the most previously uninsured patients are coming on line." Should the prescription-drug plans squeeze prices, drug companies may have further incentive to cut back their sales ranks, and possibly advertising expenses.
谁将成为处方药计划中的赢家？
从明年1月份开始，美国老年保健医疗制度(Medicare)下的数百万患者将具备报销处方药的资格。政府预计，未来10年里报销的医药成本将达到7,200亿美元，其中大多数将流入制药商手中。
马萨诸塞州咨询机构Amundsen Group Inc.的董事总经理曼森?泰纳利亚(Mason Tenaglia)说，这可谓是过去20年里制药行业发生的最重大的事件。
那么，新流入的现金是否是低迷的制药行业急需的灵丹妙药呢？
制药公司的看法恰恰相反，他们一直对Medicare医药福利将给利润带来的影响持消极看法。百时美施贵宝公司(Bristol-Myers Squibb Co., 又名：必治妥施贵宝)首席执行长彼德?多兰(Peter Dolan)也赞同其它制药公司管理人员的看法，他说，对百时美施贵宝而言，短期内，影响是中性至负面，长期而言，影响是负面的。
诺华制药公司(Novartis AG)的首席执行长丹尼尔?瓦塞拉(Daniel Vasella)说，有著其它药品难以匹敌的优势、独具特色的药品的需求将会增长。由于原来负担不起的新消费者的购买，这些药品的销量将得到提振。但疗效相同的类似药物的制造商将被迫提供折扣，以进入到福利计划中。
因此，投资者面临的问题是，在Medicare医药福利启动后，谁会从中获益最大？Amundsen的泰纳利亚说，名单中包括百时美施贵宝、强生公司(Johnson & Johnson)、罗氏公司(Roche Holding AG)和雅培制药(Abbott Laboratories)，他们受到仿制药影响的药品比例低于总药品种类的20%，另外还有比例稍高于20%的诺华制药和Sanofi-Aventis。这些公司生产竞争压力较低、定价较高的药物，如治疗癌症、艾滋病和阿尔茨海默氏病(Alzheimer's)的药品。
泰纳利亚认为，处境将更为艰难的公司包括辉瑞制药有限公司(Pfizer Inc., 简称：辉瑞公司)、默克公司(Merck & Co. Inc.)、礼来公司(Eli Lilly & Co.)和阿斯利康(AstraZeneca)，他们销售的药品中受仿制药影响的比例超过60%。这些药品包括降低胆固醇的statin类药物、抗抑郁药、治疗高血压的血管紧张素转换酶(ACE)抑制剂、还有治疗胃溃疡的质子泵抑制剂。
他说，这些公司现在将受到管理式医疗和向老年人提供的处方药计划的冲击。
迄今为止，大多数投资者还没有关注Medicare的医药福利。许多尖锐的问题给该行业蒙上了一层阴影，如默克的万络(Vioxx)面临的诉讼、辉瑞公司的立普妥(Lipitor)面临的专利纠纷和对美国食品和药物管理局(Food and Drug Administration)批准的药物可能存在安全问题的担忧。今年，大多数制药类股持平或下跌，从强生的下跌3.1%到默克的下跌16.3%。少数股票表现较好，如Sanofi-Aventis上涨5.2%，阿斯利康上涨33%。
尽管制药公司仍具有很高的利润率，但它们已经不再是价格高企的成长类股，而是高额股息的支付者。辉瑞公司股票目前的年股息收益率为3.1%；默克公司为5.9%，百时美施贵宝为4.9%。最近，制药行业的贸易组织发行了一本小册子，强调该行业面临的财务困难，希望以此转移对安全和激进营销问题的政治关注。
Henry J. Kaiser Family基金会称，Medicare医药福利将影响到该行业中依赖性最强的部分客户：91%的Medicare受益人在2002年至少开药一次，治疗他们的急性或慢性疾病。Kaiser根据布什政府公布的数据研究后认为，在2006年的4,310万Medicare受益人中，预计有2,930万明年将选择登记一项Medicare处方药计划。
美国官员最近表示，估计2001年有900万Medicare受益人无法报销药费。这些人一直自费全额购买药品。但一旦他们能够报销，他们很可能购买更多药品。在2002年，不能报销药费的Medicare受益人服用的处方药比能以某种形式报销的受益人要少三分之一。
Raymond James & Associates的分析师迈克尔?克伦塞维兹(Michael Krensavage)说，具有保险的人常会开更新、更贵的品牌药。克伦塞维兹本人没有持有任何医药类股。他说，就像能够报销高额饭费的人会要求上门服务，但当他们自己旅行时，就会步行到街上的餐馆了。
药品福利也可能带来费用的下降。泰纳利亚说，制药业销售人员目前的模式是找到能够开更多处方药的医生。新的模式将是找到能涵盖以前大多数未参保患者的州。假如处方药计划真的导致价格下跌，制药公司可能就会有更大的动力削减销售人员，可能还会降低广告支出。
