Tuesday, August 28, 2007

The Business of Diabetes: Medco Acquires Liberty

This morning, drug distributor giant Medco Health announced they were buying PolyMedica, whose public face is depicted by its Liberty Healthcare division, featuring everyone's least favorite diabetes spokesman, Wilford Brimley's TV pitches.

You can catch the full press release here. According to Dow Jones, Medco is buying PolyMedica in an all-cash deal, and is paying a hefty 17% premium to PolyMedica's stock price, which is yet another sign of how much money goes into treating diabetes rather than eliminating the disease, and then we wonder why a cure still hasn't been found. Talk about a cash cow -- for diabusiness, that is.

As Medco pointed out to investors this morning, "With spending increasing by 14.5% annually, diabetes treatments by 2009 are expected to overtake cholesterol medicines as the fastest-growing therapeutic category."

Ironic, considering that investments in prevention of type 2 diabetes have been marginal at best, and investments made towards advancing treatment for type 1 have been largely off the radar for most major pharmaceutical companies (that may not be a bad thing). But for what its worth, were you aware that not one new insulin is in the drug pipeline at Lilly (in spite of having lost 35% of its market share over the last 5 years), and even Novo has only 1 major insulin in advanced trials now in the works? Novo's pending contribution: yet another long-acting analog which supposedly doesn't encourage weight gain, and they dare call it an advance over Levemir? Please ...

I for one, find at least some humor in all of this, in spite of the disturbing message it sends about the rich premiums ... in cash ... that big business now places on diabusiness. With that in mind, I am including a few clips that most of us have seen on YouTube, but seem very appropriate here. By the way, its unclear whether Medco is likely to fire Brimley (one could hope, anyway). Medco noted that PolyMedica will "retain its successful patient engagement and service model, Liberty brand, culture and focus," while providing an integrated and complementary set of services and solutions in support of Medco's Therapeutic Resource Center for diabetes care. Truthfully, I suspect Mr. Brimley will have work for a while to come, because in spite of being incredibly annoying, he is also well-recognized, which means a lot in a commodity business like pharmaceutical and medical equipment distributors.


Christine said...

Oh gosh, I don't think I like this news at all. I order my pump and testing supplies from Liberty. They bill my insurance, BCBS. BCBS subcontracts Medco to handle my presciption benefit. Therefore, I have the option of of ordering strips through Medco and having them paid for through my drug benefit, or ordering through Liberty and having them billed through my DME benefit. I can even do both if I wish. It works out better for me to order through Liberty. I have a feeling that this isn't going to work out well for me.

Anonymous said...

makes you wonder how else they are perpetuating diabetes...eh?