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Erez Vigodman will, indeed, succeed Jeremy Levin as the chief executive officer of Teva Pharmaceutical Industries Ltd.
Teva made the announcement Thursday morning before the stock market opened in Israel, hoping it will calm investors and the Wall Street community, which was concerned that disagreement and disarray at the top of the drugmaker was further delaying plans to rebuild.
Reports last week in Israel-based media suggested Vigodman was the leading candidate, though Teva declined comment at the time.
A local pharmaceutical company bidding war has erupted, with Teva Pharmaceutical Industries trying to trump a December offer by Endo Health Solutions to buy NuPathe, Inc.
Endo offered $105 million upfront in December. Teva offered $149 million upfront on Monday.
Teva, like Endo, is slightly desperate to find ways to generate cash right away to satisfy stockholders and Wall Street.
The rate of increase in spending on prescription drugs declined in 2012 compared with 2011, which was a key factor in why the cost of healthcare is not rising as fast as it once was, according to new analysis from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS). The analysis was published in the January 2014 issue of Health Affairs.
The annual study estimated that health care spending in the United States grew at a rate of 3.7 percent in 2012 to $2.8 trillion. CMS said the level of annual growth is similar to spending growth rates since 2009 (between 3.6 percent and 3.8 percent), meaning that growth during all four years has occurred at the slowest rates ever recorded in the fifty-three-year history of the National Health Expenditure Accounts. Healthcare spending accounted for 17.2 percent of gross domestic product, a slight decline from the 2011 figure of 17.3 percent.
“The low rates of national health spending growth and relative stability since 2009 primarily reflect the lagged impacts of the recent severe economic recession,” Anne B. Martin, an economist in the Office of the Actuary at CMS and lead author of the Health Affairs article, said in a statement. “Additionally, 2012 was impacted by the mostly one-time effects of a large number of blockbuster prescription drugs losing patent protection and a Medicare payment reduction to skilled nursing facilities.”
Mayor Michael Nutter had hoped to create major drug-company bookends in Philadelphia, with Teva Pharmaceutical Industries in Northeast and GlaxoSmithKline in the Navy Yard in the south end of town.
The Teva piece did not work out as planned and is unlikely to, but the Navy Yard piece with GSK has worked out quite well. Nutter discussed that in his remarks to the crowd at the British American Business Council of Greater Philadelphia holiday lunch on Dec. 11 at The Ritz Carlton, a block from City Hall. A link to the council site is here.
Nutter told the group he met with GSK chairman Christopher Gent during his recent trip to England and Israel. The trip was meant to foster business relations between the city and those countries.
GlaxoSmithKline said Tuesday it will stop paying doctors in many - but not all - situations that it and other drugmakers do now and will make further changes to the compensation system for sales representatives by removing individual sales targets.
GSK is based in London, but has a facility in Philadelphia's Navy Yard and other facilities in the suburbs.
For decades sale reps made money by urging doctors to write prescriptions for a drug company's medicine. The more prescriptions written, the more money that went to the rep. That basic commission system exists in many industries and is still in use with most drug companies. To further encourage doctors to pick a drug company's medicine, drugmakers would pay doctors consulting fees, pay for travel to conferences in warm and sunny places, all under the guise of continuing education.
Bernstein Research analyst Ronny Gal was skeptical about some of the things said and projections made by top officials from Teva Pharmaceutical Industries Ltd., during a conference call with analysts on Tuesday. The reason for the call was to give financial guidance and projections for 2014.
But everything is relative.
Gal wrote in a note to clients that the risk-reward calculation for Teva has improved for three reasons, but the first was a case of being damned by feint praise.
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