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Financial Markets - 04.021.15

The Gilmer Free Press

Benchmark indexes closed mixed Tuesday with the S&P 500 and Dow Jones Industrial Average pressured by a series of poor earnings, while the Nasdaq popped on deals news.

Travelers Companies (TRV) was the worst performer on the Dow after first-quarter profit fell 21% on a drop in investment income.

DuPont (DD) was also a drag after reporting a sharp decline in sales owing to the negative impact of a stronger dollar.

Harley-Davidson (HOG) was the biggest loser on the S&P 500 after reporting a decline in the number of new motorcycles sold over the first quarter.

ports apparel brand Under Armour (UA) tumbled after reporting a 13% decline in quarterly profit.

What to Look For In an Investment Property

The Gilmer Free Press

Historically, the appreciation rate for real estate is very strong. Even when the housing market declines, long-term investors in real estate can rest easy knowing that property values tend to rebound rather quickly, rewarding patient investors in the process.

Looking at real estate as a long-term investment is just one way approach a potential investment property. The following are a few additional considerations prospective investors should contemplate before buying an investment property.


Location

Many people are familiar with the real estate industry axiom, “location, location, location!” When buying an investment property, location is everything. A great location should outweigh your own personal feelings about the home, especially if you do not intend to live at the property. You will likely define a great location for an investment property differently than you would a property you intend to live in, so don’t let your own desires in a home cloud your judgement when choosing an investment property. Properties in safe neighborhoods that boast good schools and offer easy access to public transportation tend to make great investment properties.


Décor

Décor is another thing to consider when looking for an investment property. If you don’t plan to reside in the property, your opinion of the décor should not carry much weight. When viewing a property, try to imagine how much it might appeal to prospective tenants. Quirky properties typically do not appeal to as many prospective tenants as properties whose décor are similar to other homes in the area. Though you might find a tenant who prefers properties with unique interiors, a property that appeals to as many prospective tenants as possible often makes for a better investment and a lot less stress when the time comes to find tenants.


Condition

The condition of the property also must be considered before buying an investment property. Some investors want a fixer-upper, while others prefer turnkey properties that won’t require any elbow grease. The former type of property likely won’t cost as much as a fully renovated property, but those cost savings might be lost when it’s time to renovate. Find a property that’s in the type of condition you’re comfortable with. If you decide to go with a fixer-upper, learn the cost of your potential projects before submitting an offer.


Cost

Real estate makes a great investment, but don’t go overboard when buying an investment property. Before making an offer on a property, research rents in the area and the cost of insurance in that particular neighborhood. You want a property that essentially pays for itself, so make sure the rent you’re likely to collect is enough to cover your monthly costs, including the mortgage on the property, insurance and the costs associated with managing and maintaining the property.

Real estate investors often reap great rewards when selling their properties. But it’s still important for potential investors to consider a host of factors before investing in a property.

Glaxo Recalls Flu Vaccine Due To Potency Problem

The Gilmer Free Press

WASHINGTON, D.C. — GlaxoSmithKline is recalling remaining doses of a popular four-in-one flu vaccine because of effectiveness problems.

The company alerted U.S. customers Tuesday that the vaccine can lose potency over time and fail to adequately protect against some strains of the flu. The Flulaval Quadrivalent Thimerosal-free vaccine in prefilled syringes is designed to protect against four strains of influenza virus.

But Glaxo said in a letter it “cannot rule out potential suboptimal protection” in people who received the vaccine in early January or later. The letter was sent to about 1,000 customers throughout the U.S., including wholesale distributors, pharmacies, government agencies and physicians.

The recall affects about 1.7 million doses, but a company spokeswoman says it’s unclear how many of those actually remain on the market. More than 99 percent of the vaccines were distributed in 2014, before the product began losing potency, according to GlaxoSmithKline’s Anna Padula.

“The lots are being recalled due to the potential for reduced efficacy offered by the vaccine and not as a result of any identified safety concern,” Padula said in a statement. The British drug and vaccine maker has also notified the Food and Drug Administration.

The recalled vaccines represent about 7 percent of the total 24 million flu vaccine doses Glaxo distributed in the U.S. this season.

Health authorities generally recommend getting the flu vaccine in the fall but many people don’t get vaccinated until later months. Flu season generally peaks around January or February.

Glaxo’s so-called quadrivalent vaccine is part of a new group of injectable and inhalable products that protect against four strains: two for Type A flu and two for Type B flu. Older vaccines traditionally only protected against three strains: two Type A strains and one Type B strain.

Glaxo said it launched the recall after company testing showed its vaccine’s potency against the B strains could fall below minimum effectiveness standards. Type B flu tends to strike children more than the middle-aged.

The Centers for Disease Control and Prevention recommends the flu vaccine for nearly everyone ages 6 months and older. Yet usually less than half of that target population follows the advice. Flu is particularly risky for seniors, children, pregnant women and people of any age with asthma, heart disease and other chronic diseases.

GlaxoSmithKline is headquartered in London, with U.S. operations in Philadelphia and North Carolina.

IMS: U.S. Prescription Drug Spending Jumped 13% in 2014

The Gilmer Free Press

TRENTON, NJ — U.S. spending on prescription drugs soared last year, driven up primarily by costly breakthrough medicines, manufacturer price hikes and a surge from millions of people newly insured due to the Affordable Care Act.

Spending rose 13%, the biggest jump since 2001, to a total of $374 billion, according to a report just released by the IMS Institute for Healthcare Informatics. After accounting for population growth and inflation, the increase equaled 10%.

A record 4.3 billion prescriptions were filled in 2014, many of them for inexpensive generic pills going to patients now insured through Medicaid in states that expanded eligibility for the government health program for the poor and disabled. The number of prescriptions covered by Medicaid rose by nearly 17%, and that increase accounted for 70% of growth in the number of prescriptions filled at retail pharmacies. Another sign of the Affordable Care Ac’s impact was that prescriptions paid for in cash, normally filled by uninsured people, declined 5.5%.

The higher spending, though, was mostly due to the many recent drugs with eye-popping price tags: tens of thousands of dollars for a year or course of treatment.

Last year saw an unusually high 42 novel medicines launched, 18 for rare diseases, those that affect fewer than 200,000 Americans. Ten of the new drugs were designated as breakthrough therapies, for conditions including multiple sclerosis, various cancers and hepatitis C.

Altogether, spending on prescription medicines in the U.S. rose by $43.4 billion last year, including about $10 billion due to price increases and $20.3 billion spent on prescriptions for new drugs.

That included a combined $11.3 billion spent on just four new medicines for hepatitis C, a liver-damaging virus so tough to eliminate that until recently, patients had to endure flu-like symptoms and other awful side effects for nearly a year, yet barely 60% were cured.

The new hepatitis C treatments cure upward of 90%, usually in 12 weeks. However, they carry list prices of $84,000 or more for a course of treatment.

One of them, Sovaldi, was launched at the end of 2013 yet was the top-selling drug last year. It brought maker Gilead Sciences Inc. $7.9 billion.

Specialty medicines — drugs for complex, chronic and often expensive disorders including hepatitis C — last year accounted for a full third of prescription spending. That’s a likely harbinger of even higher prescription spending in years in the future.

The 2014 spending growth was somewhat restrained by insurers’ efforts to hold down their costs. More and more insurance companies have been shifting patients into plans that include high copayments for medicines, as well as large deductibles that must be met before insurance coverage kicks in.

IMS said that led to more prescriptions being abandoned at the pharmacy counters by patients who couldn’t afford their portion of the cost. That ultimately resulted in 8.4 million fewer prescriptions being filled at retail pharmacies in 2014, compared to 2013, by patients who were commercially insured, either through their employer or a new health exchange plan.

The IMS figures are based on list prices for brand-name drugs, though wholesalers usually get discounts and rebates amounting to about 6%. Generic drugs, which are often as much as 90% cheaper than the brand-name drugs they copy, don’t come with such large markdowns.

Last year, there were far fewer new generic drugs than in recent years, so generics reduced spending by only $11.9 billion, compared to the peak level of $30.7 billion in 2012.


U.S. prescription drug spending at a glance


Some figures on prescription medicine spending trends:

U.S. PRESCRIPTION SPENDING, 2014: $373.9 billion

U.S. PRESCRIPTION SPENDING, 2013: $330.5 billion

U.S. PRESCRIPTIONS DISPENSED, 2014: 4.33 billion

U.S. PRESCRIPTIONS DISPENSED, 2013: 4.24 billion

TOP DRUG TYPES BY PRESCRIPTION, 2014: Blood pressure, mental health, pain, antibacterials, cholesterol/blood fats, diabetes.

TOP DRUG TYPES BY SALES LEVEL, 2014: Cancer, diabetes, mental health, immune disorders, respiratory conditions, pain.

TOP DRUGS BY SALES, 2014: Sovaldi (hepatitis C), $7.9 billion; Abilify (schizophrenia), $7.8 billion; Humira (immune disorders), $7.2 billion; Nexium (severe heartburn), $5.9 billion; Crestor (cholesterol), $5.8 billion; Enbrel (immune disorders), $5.5 billion.


~~  Source: IMS Institute for Healthcare Informatics ~~

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