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Biotech / Medical : Pharma News Only (pfe,mrk,wla, sgp, ahp, bmy, lly) -- Ignore unavailable to you. Want to Upgrade?

To: Henry Niman who wrote (1603)	9/14/1999 4:17:00 PM
From: Thomas J Pittman	Read Replies (2) \| Respond to of 1722

I think we are going to see the big pharmas lower at least until the end of the year. 1) They havent done well this year and I think you could see some tax loss covering on these. 2) The rest of the market has had decent profit growth and after a few years, it is reasonable for folks to rotate out of these gains. 3) The medicare stuff. I am saving my pennies in hopes of being able to pick up some of these names at prices below their 1 year range. I think we are going to see PE contraction on these and that by the November December timeframe I will be able to buy some of the big names at 1.0 to 1.2 of market multiple. I plan to play this sector with individual purchases (probably elan, pfe, wla, maybe ahp) and through the funds jaglx, invesco, fidelity (health and/or biotech). If this pans out I will be grateful to the market for giving me this chance to load up on these stocks for my kids college and my own retirement. Is there a 'non news only' thread for this kind of stuff? J

To: Henry Niman who wrote (1603)	9/22/1999 7:25:00 PM
From: Anthony Wong	Respond to of 1722

HMOs to Cut Medicare Drug Benefit, U.S. Report Says (Correct) Bloomberg News September 22, 1999, 6:05 p.m. ET HMOs to Cut Medicare Drug Benefit, U.S. Report Says (Correct) (Changes second paragraph to indicate that people in certain areas of the country have access to free coverage.) Washington, Sept. 22 (Bloomberg) -- The Clinton administration, trying to build support for its Medicare prescription-drug plan, said HMOs will raise co-payments for Medicare patients next year and eliminate free coverage. HMOs, which serve more than 6 million of the nation's 40 million Medicare beneficiaries, will raise co-payments an average 21 percent for brand-name drugs and 8 percent for generic drugs, an administration report said. Co-payments will be charged for all prescription drugs, it said. More than 1 million Medicare patients in HMOs live in areas where free coverage is available. Industry representatives say Medicare payments, cut under the 1997 balanced-budget law, haven't kept pace with costs. Administration officials counter that even if payments to HMOs rise, there will still be a need for President Bill Clinton's comprehensive prescription-drug benefit plan for Medicare, the government health-insurance program for the elderly. ''Too many of America's working families depending on Medicare cannot depend on their HMOs to deliver the affordable, critical benefits that convinced them to choose an HMO in the first place,'' Vice President Al Gore said in a statement. Gore argued that the Republican-controlled Congress should pass the President's prescription-drug coverage plan, expected to cost $118 billion over 10 years. The proposal faces stiff opposition from the industry and in Congress. Capitol Hill Rally The American Association of Health Plans, gathered 100 senior citizens to rally on Capitol Hill today for higher Medicare reimbursements. The industry said the administration didn't heed industry warnings that the payment cuts would lead to reduced benefits. PacifiCare Health Systems Inc., the HMO with the largest number of Medicare enrollees, and other health plans said this summer they were considering raising co-payments for the elderly to help offset cuts in the growth of their Medicare payments. The companies are paid a fixed fee to care for Medicare patients, which is adjusted regionally for differences in health costs. The 1997 law reduced the annual growth of those payments by $22 billion over five years. ''Beneficiaries' access to affordable coverage is eroding altogether,'' because of the Medicare cuts, said Karen Ignagni, chief executive of the American Association of Health Plans, the industry trade group. The 1997 Medicare cuts were enacted after reports that HMOs were largely treating healthy senior citizens who, on average, cost far less to treat than what Medicare was paying in reimbursements. Medicare Payments Medicare payment increases to HMOs have been held to 2 percent this year in many parts of the country, compared with raises of 6 percent to 10 percent before the passage of the 1997 law. Payments to HMOs will rise 2 percent to 12.9 percent next year, in the 100 U.S. counties that have the largest numbers of Medicare HMO patients. Still, 99 HMOs have said they will drop coverage of 327,000 senior citizens next year. The Clinton administration attributes the withdrawal of coverage to competition among HMOs. ''Decisions about pulling out of the program have much more to do with market forces -- competition'' than Medicare cuts, said Chris Jennings, a White House health aide. HMOs, which control costs by restricting patient access to services and limiting patients to a roster of affiliated doctors, have attracted Medicare beneficiaries by offering them prescription drugs and other benefits not available in the traditional fee-for-service program. The administration report said statistics show a decline in HMO drug benefits. The report says that next year: -- All health plans will charge beneficiaries a co-payment for medicines for the first time. -- The percentage of HMOs that limit a patient's annual prescription-drug coverage to $500 or less will rise to 32 percent, from 21 percent in 1999. -- HMO monthly premiums will rise sharply in some states. In New Hampshire, for example, average premiums will rise to $40 from $11. -- Only 4 percent of Medicare beneficiaries in rural areas will be able to get drug coverage through an HMO. The only way to ensure affordable access to drug benefits, Jennings said, ''is to ensure a drug option is offered (to all Medicare beneficiaries) and make sure it is subsidized.'' ''We are not saying HMOs are bad,'' he said. ''We're saying under the current system they can't ensure a meaningful drug benefit for all beneficiaries.