Markets

By Ross Tieman

French news magazine Le Point has published its third annual ranking of the “best” hospitals in France.

The survey raises interesting questions that go beyond whether a patient in Nice would do best to jump on the high-speed train to Lille to get his or her stomach complaint sorted out.

What is the purpose of such rankings, are they an effective barometer of hospital competence, and what effect might they have on the quality of care hospitals provide?

Andrew Jack

There are two kinds of senior executive in the pharmaceuticals sector: those who are against mega-mergers, and those who have recently completed or are actively considering doing one.

After a decade of big deals up to the mid-1990s in which many of the world’s biggest medicine manufacturers were created – such as GlaxoSmithKline (GSK), AstraZeneca and Sanofi-Aventis – there was a period of four quiet years, before the onset of a new wave of consolidation this year.

At least in part, this has been set off by the downturn as valuations have fallen and any structural issues such as pricing have been accentuated.

Pfizer, a serial acquirer, sealed the $68bn takeover of Wyeth in January, while Merck – which traditionally has preferred to concentrate on organic growth – said in March that it would buy Schering-Plough for $41bn.

Even Roche, which had long championed an arm’s length model of ownership and management for its leading subsidiaries in Japan and the US, has changed tack. It concluded a peace treaty in the same month with biotech company Genentech in San Francisco, and bought out its minority shareholders for $47bn after a protracted hostile bid.

Continue reading “Pharma split on nature of mergers as kill or cure”

Andrew Jack

Stock markets may be depressed, house prices plummeting and employees worried about losing their jobs, but “big pharma” is feeling perky.

With healthcare less discretionary than most other forms of spending, equity valuations low and smaller companies struggling to survive, the balance of power has swung in favour of the large drug companies with cash to spend.

Pharmaceutical consolidation

Interactive graphic: Pharmaceutical consolidation

GlaxoSmithKline, the UK-based group, is set to buy a stake in Aspen of South Africa; Novartis of Switzerland is buying out minority shareholders in its Indian subsidiary; and investment bankers are hawking around all manner of more ambitious combinations, not least the possible sale of BMS, Allergan and Biogen.

But – like the recent Pfizer-Wyeth and Merck-Schering Plough “mega mergers” – this relative strength in deals masks an underlying weakness. Geographical and product diversification offers a way to spread risk; mergers provide the prospect for short-term cost cutting.

But while deferring the pain, they do little to tackle the biggest long-term challenge: the need for new models of innovation to bring promising new drugs to patients.

By Kiran Stacey in New York

US stocks clung on to their gains on Friday during a choppy trading session as rises in healthcare stocks took equities to their best weekly performance since November.

The remainder of the column can be read here. Please post comments below.

Health and science blog




This blog, part of the FT's health series, is a forum for readers interested in the science, policy, management, technology, business and delivery of healthcare.

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Margaret McCartney is a Glasgow-based GP and FT Weekend columnist. She started writing for the Life and Arts section in 2005 and moved to the magazine in 2008. She also has her own blog: www.margaretmccartney.com/blog

Clive Cookson has been a science journalist for the whole of his working life. He joined the FT in 1987. Clive, the FT's science editor, picks out the research that everyone should know about. He also discusses key policy issues, from R&D funding to science education.

Andrew Jack is pharmaceuticals correspondent, covering the industry and public health issues. He has been a journalist with the FT for 19 years, based in London, Paris and Moscow

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