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Reik posted:It's actually illegal for the CEO to not try and produce the best results for the shareholders. No, it isn't, and people should stop claiming it is. (The rest of your post is similarly ill informed but I'm too lazy to dissect it.)
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Dec 23, 2016 21:07
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Vladimir Putin posted:Don't you mean ROI. ROE is rules of engagement like people shooting each other. Return on Equity Kalman posted:No, it isn't, and people should stop claiming it is. Are you saying fiduciary duty is not a thing? Dodge v Ford http://www.casebriefs.com/blog/law/corporations/corporations-keyed-to-klein/the-nature-of-the-corporation/dodge-v-ford-motor-co/ Katz v Oak http://www.casebriefs.com/blog/law/corporations/corporations-keyed-to-klein/corporate-debt/katz-v-oak-industries-inc/ Hobby Lobby is not a publicly traded company. The fact that it is a private closely held company is why the Supreme Court ruled the way they did in that case. Reik fucked around with this message at 21:28 on Dec 23, 2016 |
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Dec 23, 2016 21:25
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11 billions is high for an acquisition based on garden variety deals that go on in the industry. I'd argue that both Pharmassett and Gilead knew the potential and pitfalls and the purchase price was more or less appropriate. Which again is to say that it had potential but it wasn't a slam dunk case. Finally I'd say that for innovation based industries that value based pricing is the only way to go. The market doesn't care how much you spent on developing it or in your stupid deals in either direction. Nobody will care if you overpaid for your candidate and likewise the market doesn't care if you underpaid. You price based on what value you bring and how you differentiate to what's on the market and that's it. All this blah blah investors...whatever. If you stupidly invest 11 billion on something that the market doesn't want it doesn't entitle you to any return. You get zero. The reverse is also true. There are numerous examples of both of these scenarios.
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Dec 23, 2016 21:29
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Vladimir Putin posted:11 billions is high for an acquisition based on garden variety deals that go on in the industry. I'd argue that both Pharmassett and Gilead knew the potential and pitfalls and the purchase price was more or less appropriate. Which again is to say that it had potential but it wasn't a slam dunk case. The 2003 MMA prevents Medicare from negotiating drug prices down in the case of Sovaldi, and baby boomers have about 4 times the prevalence of Hep C than the rest of the US population. The market or "value" of Sovaldi has nothing to do with this. The price of Sovaldi is based on the fact that the Medicare population makes up about 75% of the cases of Hep C in the US and between Medicare and Patent law they have no reason to price their drug competitively.
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Dec 23, 2016 21:37
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Reik posted:The 2003 MMA prevents Medicare from negotiating drug prices down in the case of Sovaldi, and baby boomers have about 4 times the prevalence of Hep C than the rest of the US population. The market or "value" of Sovaldi has nothing to do with this. The price of Sovaldi is based on the fact that the Medicare population makes up about 75% of the cases of Hep C in the US and between Medicare and Patent law they have no reason to price their drug competitively. Nonnegotiation was the buy in for pharma on the ACA and one of the outcomes of which was that they would help pay to close the Medicare donut hole and a defined pathway for generics for biologics. Many of which are about to hit the market by the way. And the government has tried to go back on the nonnegotiate deal many times since then. Edit: and this is another reason why repealing the ACA would throw the entire system into chaos. Vladimir Putin fucked around with this message at 21:47 on Dec 23, 2016 |
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Dec 23, 2016 21:43
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Reik posted:Return on Equity He's saying, as the article in the link makes clear, that "shareholder value" is not a synonym for net next-quarter profits or short-term RoE or any specific metric like that, but a more generalized duty to prioritize the interests of the shareholders over any other (presumably, however the shareholders define that) A Wizard of Goatse fucked around with this message at 21:48 on Dec 23, 2016 |
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Dec 23, 2016 21:45
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Vladimir Putin posted:Nonnegotiation was the buy in for pharma on the ACA and one of the outcomes of which was that they would help pay to close the Medicare donut hole and a defined pathway for generics for biologics. Many of which are about to hit the market by the way. And the government has tried to go back on the nonnegotiate deal many times since then. Please find me the section of PPACA that talks about not negotiating drug prices for Medicare. After doing that, feel free to read section 303 "Payment reform for covered outpatient drugs and biologicals." from "MEDICARE PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF 2003" The donut hole is something completely different and is designed to try and steer utilization away from brand drugs to generics (or biosimilars in the case of biologics). A Wizard of Goatse posted:He's saying, as the article in the link makes clear, that "shareholder value" is not a synonym for net next-quarter profits or short-term RoE or any specific metric like that, but a more generalized duty to prioritize the interests of the shareholders over any other (presumably, however the shareholders define that) I get what you are saying, but the "shareholder value" for a publicly traded company has a much narrower scope than the "shareholder value" for a privately held company though.
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Dec 23, 2016 21:52
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You're wrong on the donut hole. Pharma is helping to pay for it to steer towards branded drugs. The nonnegotiate wasn't written into PPACA but it was a lever used by the administration to get pharma to the table. You can obviously see why. In the end nonnegotiate remained but the ACA got passed and both sides got something out of it, which is one of the reasons why I think the PPACA is a better piece of legislation than people give it credit for.
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Dec 23, 2016 21:56
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I don't think you're particularly wrong, to be clear, I just agree that it takes more to establish that drug companies are solely motivated by maximizing value from month to month than the existence of the concept of fiduciary duty (I don't think that, say, a commitment to the betterment of mankind would be a legally defensible discharge of their duty, but where short-term greed might conflict with the long-term stability of the company there'd be a strong case, else every corporation would get liquidated the minute it went public), and don't know offhand how you'd be able to prove what a giant faceless drug company's truest motivations are in charging extortionate prices except that given their continued existence post-haggling they plainly don't need to do so just to survive.
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Dec 23, 2016 21:58
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Vladimir Putin posted:You're wrong on the donut hole. Pharma is helping to pay for it to steer towards branded drugs. The nonnegotiate wasn't written into PPACA but it was a lever used by the administration to get pharma to the table. You can obviously see why. In the end nonnegotiate remained but the ACA got passed and both sides got something out of it, which is one of the reasons why I think the PPACA is a better piece of legislation than people give it credit for. I'm sure the pharmaceutical companies love that the donut hole is being closed, but it has nothing to do with not being able to negotiate down the prices of drugs like Sovaldi.
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Dec 23, 2016 21:59
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A Wizard of Goatse posted:He's saying, as the article in the link makes clear, that "shareholder value" is not a synonym for net next-quarter profits or short-term RoE or any specific metric like that, but a more generalized duty to prioritize the interests of the shareholders over any other (presumably, however the shareholders define that) There's no duty to prioritize the shareholder's interests as primary over all other interests. You owe a duty to shareholders to consider and pursue their interests but those interests have to be balanced against other interests (e.g. the interests of the corporate entity itself, as well as third parties.) Dodge v Ford also didn't say that shareholder value was the only interest (and even if it did, it's a loving Michigan case that is only relevant in Michigan courts, and that in and of itself states that the rule is essentially unenforceable, which has been born out and extended in the decades since.) The only people who think that the law requires shareholder value maximization are people who didn't study corporate law. (In other news, Gilead owes Merck around 2.5 billion on Sovaldi/Harvoni as a result of patent litigation. There's another reason pharma companies charge prices above recoupment value for you.)
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Dec 23, 2016 23:03
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Kalman posted:There's no duty to prioritize the shareholder's interests as primary over all other interests. You owe a duty to shareholders to consider and pursue their interests but those interests have to be balanced against other interests (e.g. the interests of the corporate entity itself, as well as third parties.) That Merck/Gilead thing is a loving hot mess. They originally ruled that the Merck guy lied under oath and Merck was totally hosed. Now that got reversed and Gilead now owes Merck billions. Total loving mess.
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Dec 24, 2016 02:56
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Yeah, having a prosecution attorney in the call when Pharmasset disclosed their hep C research who proceeded to rewrite the claims to cover that is a liiiiiiittle bit sketchy. Juries, man. Juries.
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Dec 24, 2016 07:25
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Dodge v Ford wasn't about profit maximization, but rather profit minimization. Henry Ford was deliberately trying to make as close to zero profit as possible. He was altruistic and wanted every person to own a car and said in court that he was deliberately trying to keep profits as low as possible. Even still the courts didn't say that he was wrong about selling cars for next to no gain. The issue at hand was whether to re-invest the meager profits he was attempting to make or if he owed shareholders a larger chunk (he did). If Ford had been giving himself a small salary instead of paying himself lavishly well while trying to give his investors scraps, the Dodge brothers would have had a much tougher case to win. Basically the business judgement rule will pretty much cover any types of decisions like that, and simply not profit-maximizing does not violate the BJR and the director's fiduciary duty. Yes, directors have fiduciary duties to their shareholders. Profit-maximization is not one of them.
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Dec 24, 2016 18:21
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I don't think Henry Ford was altruistic, he was just ahead of the curve on the loss-leader idea. He knew that if people bought a Model T, they might buy a more luxurious car down the line and brand loyalty is a real thing that exists. It also looked good that the parking lot at his factory was full of his cars because his workers could afford them.
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Dec 24, 2016 19:13
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Anyone have a impact study on defunding Planned Parenthood. I know that there was one in the past that showed it dramatically over time increased over all spending, but can't seem to find it.
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Dec 24, 2016 21:28
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Mr. Nice! posted:Yes, directors have fiduciary duties to their shareholders. Profit-maximization is not one of them. A good example of this is Amazon. They might be worth zillions as a company but when you look at business news about the stock all you see is pissing and moaning from talking heads about how they almost never pay dividends.
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Dec 27, 2016 12:45
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Jan 17, 2017 00:46
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http://energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/documents/AmericanHealthCareAct.pdf This is draft Legislation from the Republicans on the replacement of Obamacare that USA today just reported on
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Mar 7, 2017 00:15
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MrBigglesworth posted:http://energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/documents/AmericanHealthCareAct.pdf Obamacare-lite. I don't see the Freedom Caucus backing this.
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Mar 7, 2017 00:18
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So there's two bills if I'm reading this right. One for reconciliation and another for statutory. Meaning republicans will need democrats in the senate and maybe the house to pass this thing. That said, kinda impressed with Paul Ryan afa leadership. He's calling the freedom caucus' bluff.
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Mar 7, 2017 00:25
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The Overton window has shifted. Government is now in your healthcare. For a health policy wonk, this is awesome.
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Mar 7, 2017 00:42
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MrBigglesworth posted:http://energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/documents/AmericanHealthCareAct.pdf Outside of the fact that the GOP is unusually obsessed with lottery winners and undocumented immigrants not getting Medicaid, can anyone else decipher this beast? I see the 3 month retroactive medicaid eligibility period is being removed.
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Mar 7, 2017 01:00
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Official summaries are here for Ways and Means, and here for Energy and Commerce.
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Mar 7, 2017 01:03
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Just heard a talking head say that the Obamacare subsidy will be replaced with a refundable tax credit. Is this just word games here? Aren't those the same thing?
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Mar 7, 2017 01:22
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Dr. Arbitrary posted:Just heard a talking head say that the Obamacare subsidy will be replaced with a refundable tax credit. If republicans want to play word games and not acutally touch the loving thing we'd all be better off to let them have this "win".
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Mar 7, 2017 01:26
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incoherent posted:If republicans want to play word games and not acutally touch the loving thing we'd all be better off to let them have this "win". Well they are touching it. The subsidies are far less generous and that's gonna mean more uninsured. We'll know how much when the CBO score drops. Which I hope happens this evening. AHCA also repeals the EHB's. CBO is not gonna like that. ~10m more uninsured, ish. 2020 it'll go up as the medicaid cap comes into effect.
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Mar 7, 2017 01:30
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Dropping the mandate and penalty on employers is pretty fantastically stupid if your fake talking point is to somehow control costs.
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Mar 7, 2017 01:33
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Bueno Papi posted:Well they are touching it. The subsidies are far less generous and that's gonna mean more uninsured. We'll know how much when the CBO score drops. Which I hope happens this evening. fffffffuuuuccckkkkkkk Subvisual Haze posted:Dropping the mandate and penalty on employers is pretty fantastically stupid if your fake talking point is to somehow control costs. But job creation tho.
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Mar 7, 2017 01:54
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New megathread for Healthcare reform / AHCA details https://forums.somethingawful.com/showthread.php?threadid=3812639 Leon Trotsky 2012 fucked around with this message at 03:39 on Mar 7, 2017 |
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Mar 7, 2017 03:24
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