It wasn’t just Valeant Pharmaceuticals that was on trial Wednesday before Congress, but a business model embraced by drug companies and professional investors. It was an investment thesis conceived and popularized among hedge funds and one core performance driver was summed up in a code phrase: “pricing power.” The core investment thesis was Valeant would purchase drug companies where they had a controlling decree to determine pricing without worrying about free market competition to various degrees. The lack of competition, in this case, came from a patent but also from a government system that doesn’t allow Medicare and Medicaid to negotiate…
Valeant Testimony Uncovers Core Problem: Drug Companies Soaking U.S. Government
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.