Buffett owns more than 3.9 million shares of Sanofi Aventis and he holds 1.51 million shares of GlaxoSmithkline.
Chanos recently told an Australian radio station:
The US healthcare system is probably the most interesting large group of companies that are heading for major problems that we've seen in a long, long time. Healthcare is growing now at about 10 per cent per annum in the US top line,versus 3 per cent for the economy. As someone with a sharp pencil and an eye forthis kind of thing, this can't last.It may not happen right away, but Obamacare will destroy the pharmaceutical industry. It appears that Chanos gets this. Does Buffett's occasional left-wing thinking blind him to what a nationalized healthcare system will do to the development of new drugs and pharmaceutical revenues? Big pharma may think their lobbyists will have things under control if Obamacare is implemented. They have no clue. Nationalization will mean bureaucracy, politicization and slow payments, for starters.
ViaJohnCarney
What Buffet "gets" is that ObamaCare isn't going to pass.
ReplyDeleteRobert, the analysis makes sense to me. But what I don't understand is how it's possible. That is, how is it that the Obama political machine is working in such direct opposition to the big pharma interests?
ReplyDeleteIs there another, larger interest group which I'm not considering? Is it simply and overpowering do-gooder complex? I understand why the average leftist wants single-payer, because they don't understand the basic economics of it. But are the entrenched political leeches in D.C. so ready to bite one of the hands that feeds them?
@Stewart
ReplyDeleteGood question.
I don't think Obama is working against the interests of Big Pharma.
I don't think they realizie how bad it will get under governmant control. There thinking, "We have Obama in our pocket." They are not thinking about the fact that Obama won't have the money to buy the anount of pharmecuticals that are pirchased now. They are not thinking about how politics will eventually force rules and regulations that will damage Big Pharma. Big Pharma thinks it is taking control of Fed Ex, when it is only getting the right to work with the post office.