Small Drug Firms Get Boon From D.C. --- Large pharma companies need innovation to deal with drug-price law, and that will help smaller biotechs.

"Engaging in a legal brawl with the U.S. government isn't necessarily the wrong move when your back is against the wall, but it does signal desperation.

Pharmaceutical companies and insurance giants are generally known for having it their way more quietly, deploying armies of lobbyists to shape lawmaking in the capital. That approach failed last summer, when the government empowered Medicare to negotiate some drug prices.

Merck's lawsuit against the U.S. government is probably just the beginning of a wider industry effort to fight the law all the way to the Supreme Court. So far, though, Wall Street isn't particularly enthused. By the end of Tuesday, when Merck announced the legal complaint, its stock was among the worst laggards in the S&P 500, dropping 2.7%. It fell another 1.4% on Wednesday.

Barring any surprises, in less than three months Medicare will publish a list of top-selling drugs set to face negotiation. Merck, in its lawsuit, said it expects its diabetes drug Januvia, which had global sales of $4.5 billion last year, to be among the initial batch. It accuses the government of extortion and of violating the Fifth Amendment's clause against taking private property for public use.

Legal experts said Merck will face an uphill battle. "Merck doesn't have a constitutional right to sell its drugs to the government at the price that it sets," wrote University of Michigan Law professor Nicholas Bagley. "That'd be nuts."

More broadly, the industry's main argument is that the law will harm innovation. While the precise impact to innovation is debatable, what is clear is that it will hurt pharma's earnings: A recent Wells Fargo analysis estimated a hit of up to 5% to some companies' revenue in the first three years of the law. An additional consequence is more deal making, benefiting many biotech players.

Even before the law, known as the Inflation Reduction Act, passed, pharma companies had been under pressure to boost business development to offset nearly $200 billion of blockbuster-drug annual sales going off patent by the end of the decade. Since the law effectively speeds up the clock on that revenue cliff, the industry's need for new drugs has only grown.

For an illustration of that, take Merck: Its biggest drug is cancer immunotherapy Keytruda, which had sales of $21 billion last year. Whereas Keytruda would likely face a biosimilar in 2029, the IRA means its price could be negotiated down earlier, in 2028, writes Wells Fargo's Mohit Bansal. While a one-year difference isn't a huge earnings hit, it adds more urgency to build out the pipeline, he says. That helps explain why Merck was willing to pay an eye-popping $10.8 billion for Prometheus, a company with a promising experimental drug but no approved products. More such deals are likely to come across the pharma space.

For investors, that means that betting on nimble innovators, rather than the acquirers, should continue to pay off. So far this year, the SPDR S&P Biotech ETF is up 6.5% while the NYSE Arca Pharmaceutical Index is down 1.7%. The gap is even starker when isolating for biotech's likely targets. That is a reversal from last year, when the pharma index returned 4.9% versus a 26% decline for the biotech fund.

Broader market shifts also are at play. Last year, investors poured money into healthcare, which is seen as defensive during a market downturn. This year, money is flowing back into riskier industries like tech and anything with "artificial intelligence" in the company description.

It also doesn't help that we are about to enter an election year, when healthcare companies tend to underperform as political rhetoric escalates, says Goldman Sachs senior healthcare strategist Asad Haider. Rather than rolling back the IRA, the talk among Democrats is about expanding the law, he notes.

Anna Kaltenboeck, who helped write the IRA and now oversees the drug-pricing practice at ATI Advisory, a consulting firm, notes that healthcare isn't likely to go away as a hot-button issue because it is at the top of the list of complaints that members of Congress field from constituents.

Trading at 15 times forward earnings versus 19 for the S&P 500, pharma will eventually be too cheap for Wall Street to ignore. But until the political dust has settled and the tech rotation has played out, investors in smaller drug developers can reap the gains from pharma's headaches." [1]

1. Small Drug Firms Get Boon From D.C. --- Large pharma companies need innovation to deal with drug-price law, and that will help smaller biotechs. Wainer, David. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 09 June 2023: B.10.

 

Kinija planuoja šnipų bazę Kuboje

  „Vašingtonas – Kinija ir Kuba pasiekė slaptą susitarimą, kad Kinija įkurtų elektroninio pasiklausymo įrenginį saloje, o Pekinas kelia grėsmingą naują geopolitinį iššūkį JAV, pranešė JAV pareigūnai, susipažinę su labai įslaptinta žvalgybos informacija.

 

     Pasiklausymo įrenginys Kuboje, maždaug 100 mylių nuo Floridos, leistų Kinijos žvalgybos tarnyboms perimti elektroninius ryšius pietryčių JAV, kur yra daug karinių bazių, ir stebėti JAV laivų eismą.

 

     Su šiuo klausimu susipažinę pareigūnai sakė, kad Kinija sutiko sumokėti pinigų stokojančiai Kubai kelis milijardus dolerių, kad ji galėtų pastatyti stotį, ir kad abi šalys pasiekė principinį susitarimą.

 

     Šis apreiškimas sukėlė susirūpinimą Bideno administracijoje. Vašingtonas Pekiną laiko svarbiausiu savo ekonominiu ir kariniu konkurentu. Kinijos bazė su pažangiais kariniais ir žvalgybos pajėgumais JAV kieme gali tapti precedento neturinčia nauja grėsme.

 

     Trečiadienio vakarą Nacionalinio saugumo tarybos atstovas spaudai Johnas Kirby sakė negalintis komentuoti žurnalo pranešimų detalių, tačiau pažymėjo, kad JAV stebi ir imasi veiksmų, siekdama atremti Kinijos vyriausybės pastangas investuoti į infrastruktūrą, kuri gali turėti karinių pajėgų tikslus.

 

     Ketvirtadienį, paskelbus šį straipsnį, Kirby pasakė, kad „ši ataskaita nėra tiksli“, nepateikdamas jokios informacijos. Jis pridūrė: „Esame įsitikinę, kad galime įvykdyti visus savo saugumo įsipareigojimus namuose ir regione“.

 

     Kubos ambasada Vašingtone ketvirtadienį pareiškė, kad straipsnis yra „visiškai melaginga ir nepagrįsta informacija“. Kinijos ambasada nekomentavo.

 

     JAV pareigūnai žvalgybos duomenis apie planuojamą Kubos vietą, matyt, surinktą pastarosiomis savaitėmis, apibūdino kaip įtikinamus. Jie teigė, kad bazė leistų Kinijai vykdyti signalų žvalgybą, šnipinėjimo pasaulyje žinomą kaip sigint, kuri galėtų apimti ryšių, įskaitant elektroninius laiškus, telefono skambučius ir palydovines transliacijas, stebėjimą.

 

     Pareigūnai atsisakė pateikti daugiau informacijos apie siūlomą pasiklausymo stoties vietą ir ar buvo pradėtos statybos. Neįmanoma nustatyti, ką Bideno administracija galėtų padaryti, kad sustabdytų objekto užbaigimą.

 

     Aukščiausi Senato žvalgybos komiteto įstatymų leidėjai teigė, kad Kinijos pasiklausymo įrenginys Kuboje kels „rimtą grėsmę mūsų nacionaliniam saugumui ir suverenitetui“, ir paragino administraciją imtis veiksmų.

 

     „Esame labai sunerimę dėl pranešimų, kad Havana ir Pekinas dirba kartu, siekdami nusitaikyti į JAV ir mūsų žmones“, – komiteto pirmininkas Markas Warneris (D., Va.) ir senatorius Marco Rubio, jo pavaduorojas, (R., Fla.) sakė.

 

     JAV jau anksčiau kišosi, kad neleistų užsienio valstybėms plėsti savo įtakos Vakarų pusrutulyje, ypač per 1962 m. Kubos raketų krizę. JAV ir Sovietų Sąjunga atsidūrė prie branduolinio karo slenksčio po to, kai sovietai Kuboje dislokavo branduolines raketas, todėl salai buvo paskelbtas JAV karinio jūrų laivyno karantinas.

 

     Sovietai atsitraukė ir pašalino raketas. Po kelių mėnesių JAV tyliai išvežė iš Turkijos vidutinio nuotolio balistines raketas, dėl kurių sovietai skundėsi.

 

     Žvalgybos informacija apie naująją bazę gaunama Bideno administracijos pastangose pagerinti JAV ir Kinijos santykius po kelis mėnesius trukusio nerimo po Kinijos šnipo baliono skrydžio virš JAV šiais metais.

 

     Prezidentas Bidenas gegužę išsiuntė Centrinės žvalgybos agentūros direktorių Williamą Burnsą į slaptą kelionę į Pekiną, o patarėjas nacionalinio saugumo klausimais Jake'as Sullivanas Vienoje surengė derybas su aukščiausiu Kinijos pareigūnu.

 

     Tikimasi, kad valstybės sekretorius Antony Blinken šį mėnesį vyks į Pekiną ir galbūt susitiks su Kinijos prezidentu Xi Jinpingu. Bidenas gegužę sakė manantis, kad JAV ir Kinijos santykiai atšils, nepaisant pastaruoju metu viešumoje tvyrančios įtampos.

 

     Tikėtina, kad Pekinas ginčys, kad bazė Kuboje yra pateisinama dėl JAV karinės ir žvalgybos veiklos netoli Kinijos, sakė kai kurie analitikai. JAV kariniai lėktuvai skraido virš Pietų Kinijos jūros, užsiimdami elektroniniu stebėjimu. JAV parduoda ginklus Taivanui, dislokuoja nedidelį skaičių karių, kad apmokytų savo kariuomenę, ir plaukia su karinio jūrų laivyno laivais per Taivano sąsiaurį.

 

     Pasiklausymo įrenginys Kuboje aiškiai parodytų, kad „Kinija yra pasirengusi daryti tą patį Amerikos kieme“, – sakė Craigas Singletonas, demokratijos gynimo fondo, Vašingtono nacionalinio saugumo tyrimų centro, vyresnysis bendradarbis.

 

     "Šio objekto įkūrimas signalizuoja apie naują, eskaluojamą platesnės Kinijos gynybos strategijos etapą. Tai šiek tiek keičia žaidimą", - sakė Singletonas. „Kubos pasirinkimas taip pat tyčia provokuoja“.

 

     JAV taip pat turi karinę bazę Kuboje Gvantanamo įlankoje, kur po 2001 m. rugsėjo 11 d. įvykusių išpuolių prieš JAV buvo įkurtas kalėjimas  užsienio teroristų, sulaikytų užsienyje. JAV naudojo bazę, kaip šnipų stotį.

 

     Vienintelė paskelbta Kinijos užsienio karinė bazė yra Džibutyje, Afrikos Kyšulyje. Ji pradėjo pasaulinę uostų plėtros kampaniją tokiose vietose, kaip Kambodža ir Jungtiniai Arabų Emyratai. JAV pareigūnai teigė, kad pastangos yra skirtos sukurti karinių uostų ir žvalgybos bazių tinklą, skirtą Kinijos galiai projektuoti.

 

     Vašingtono ir Pekino saugumo santykiai pastarosiomis savaitėmis įtempti po artimų JAV ir Kinijos laivų susidūrimų Taivano sąsiauryje ir abiejų šalių karinių orlaivių incidentų virš Pietų Kinijos jūros.

 

     Praėjusį savaitgalį Singapūre vykusioje konferencijoje JAV gynybos sekretorius Lloydas Austinas ir Kinijos gynybos ministras generolas Li Shangfu apsikeitė kaltinimais, nors jiedu paspaudė vienas kitam ranką plačiai nuskambėjusiu gestu. Austinas skundėsi Pekino nesikalbėjimu kariniais klausimais ir Li atsisakymu su juo susitikti. Kinija pareiškė nesutiksianti su tokiu susitikimu, kol Vašingtonas neatšauks sankcijų Li, įvestų 2018 m.

 

     Bideno administracija bandė priartėti prie Havanos, pakeisdama kai kurias D. Trumpo laikų politiką, panaikindama kelionių į Kubą ir iš jos apribojimus bei atkurdama šeimų susijungimo programą. Administracija taip pat išplėtė konsulines paslaugas, kad daugiau kubiečių galėtų apsilankyti JAV, ir sugrąžino kai kuriuos diplomatinius darbuotojus, kurie buvo pašalinti po daugybės paslaptingų sveikatos incidentų, paveikusių JAV personalą Havanoje.

 

     Kuba buvo dygliukas JAV šone nuo tada, kai po 1959 m. revoliucijos tapo komunistine diktatūra."

 

Iš tiesų, supervalstybių skverbimasis į viena kitos įtakos sferą yra nepatogus ir pavojingas žaidimas.

 

1.  China Plans Spy Base In Cuba. Strobel, Warren P;
Lubold, Gordon. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 09 June 2023: A.1.

China Plans Spy Base In Cuba.

 China related events are accelerating.

"WASHINGTON -- China and Cuba have reached a secret agreement for China to establish an electronic eavesdropping facility on the island, in a brash new geopolitical challenge by Beijing to the U.S., U.S. officials familiar with highly classified intelligence said.

An eavesdropping facility in Cuba, about 100 miles from Florida, would allow Chinese intelligence services to scoop up electronic communications throughout the southeastern U.S., where many military bases are located, and monitor U.S. ship traffic.

Officials familiar with the matter said China has agreed to pay cash-strapped Cuba several billion dollars to allow it to build the station and that the two countries had reached an agreement in principle.

The revelation has sparked alarm within the Biden administration. Washington regards Beijing as its most significant economic and military rival. A Chinese base with advanced military and intelligence capabilities in the U.S.'s backyard could be an unprecedented new threat.

On Wednesday evening, John Kirby, spokesman for the National Security Council, said he couldn't comment on the details of the Journal's reporting but noted the U.S. was monitoring and taking steps to counter the Chinese government's efforts to invest in infrastructure that might have military purposes.

On Thursday, after publication of this article, Kirby said "this report is not accurate" without providing any details. He added: "We remain confident that we are able to meet all our security commitments at home and in the region."

Cuba's Embassy in Washington said Thursday that the article was "totally mendacious and unfounded information." The Chinese Embassy had no comment.

U.S. officials described the intelligence on the planned Cuba site, apparently gathered in recent weeks, as convincing. They said the base would enable China to conduct signals intelligence, known in the espionage world as sigint, which could include the monitoring of communications including emails, phone calls and satellite transmissions.

Officials declined to provide more details about the proposed location of the listening station or whether construction had begun. It couldn't be determined what, if anything, the Biden administration could do to stop completion of the facility.

The top lawmakers on the Senate Intelligence Committee said a Chinese eavesdropping facility in Cuba would pose a "serious threat to our national security and sovereignty" and urged the administration to take action.

"We are deeply disturbed by reports that Havana and Beijing are working together to target the United States and our people," Chairman Mark Warner (D., Va.) and Sen. Marco Rubio (R., Fla.), the vice chairman of the panel, said.

The U.S. has intervened before to stop foreign powers from extending their influence in the Western Hemisphere, most notably during the 1962 Cuban Missile Crisis. The U.S. and the Soviet Union came to the brink of nuclear war after the Soviets deployed nuclear-capable missiles to Cuba, prompting a U.S. Navy quarantine of the island.

The Soviets backed down and removed the missiles. A few months later, the U.S. quietly removed intermediate-range ballistic missiles from Turkey about which the Soviets had complained.

The intelligence on the new base comes in the midst of the Biden administration's efforts to improve U.S.-China relations after months of acrimony that followed a Chinese spy balloon's flight over the U.S. this year.

President Biden in May sent Central Intelligence Agency Director William Burns on a secret trip to Beijing, and Jake Sullivan, the national-security adviser, held talks with a top Chinese official in Vienna.

Secretary of State Antony Blinken is expected to travel to Beijing this month and possibly meet with President Xi Jinping of China. Biden in May said he believed there would be a thaw in U.S.-China relations despite recent public tensions.

Beijing is likely to argue that the base in Cuba is justified because of U.S. military and intelligence activities close to China, some analysts said. U.S. military aircraft fly over the South China Sea, engaging in electronic surveillance. The U.S. sells arms to Taiwan, deploys a small number of troops there to train its military, and sails Navy ships through the Taiwan Strait.

An eavesdropping facility in Cuba would make clear "China is prepared to do the same in America's backyard," said Craig Singleton, a senior fellow at the Foundation for Defense of Democracies, a national-security think tank in Washington.

"Establishing this facility signals a new, escalatory phase in China's broader defense strategy. It's a bit of a game changer," Singleton said. "The selection of Cuba is also intentionally provocative."

The U.S. also maintains a military base in Cuba at Guantanamo Bay, where a prison was set up after the Sept. 11, 2001, attacks to house alleged foreign terrorists captured overseas. The U.S. has used the base as a sigint station.

China's only declared foreign military base is in Djibouti, in the Horn of Africa. It has embarked on a global port-development campaign in places including Cambodia and the United Arab Emirates. U.S. officials said that effort is aimed at creating a network of military ports and intelligence bases to project Chinese power.

Security relations between Washington and Beijing have grown tense in recent weeks after close encounters between U.S. and Chinese ships in the Taiwan Strait and between the two nations' military aircraft over the South China Sea.

U.S. Defense Secretary Lloyd Austin and China's defense minister, Gen. Li Shangfu, traded barbs at a conference in Singapore last weekend, though the two shook hands in a widely publicized gesture. Austin complained about Beijing's lack of communication on military matters and Li's refusal to meet with him. China has said it won't agree to such a meeting until Washington lifts sanctions it placed on Li in 2018.

The Biden administration has attempted to pull closer to Havana, reversing some Trump-era policies by loosening restrictions on travel to and from Cuba and re-establishing a family-reunification program. The administration has also expanded consular services to allow more Cubans to visit the U.S. and has restored some diplomatic personnel who were removed after a series of mysterious health incidents affecting U.S. personnel in Havana.

Cuba has been a thorn in the side of the U.S. since it became a Communist dictatorship after the 1959 revolution." [1]

Indeed, superpowers penetrating one another's sphere of influence is  an uncomfortable and dangerous game.

1.  China Plans Spy Base In Cuba. Strobel, Warren P;
Lubold, Gordon. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 09 June 2023: A.1.

Why is Ukraine not a member of NATO?

  "The former head of NATO, Anders Fogh Rasmussen, says that if Kyiv will not be provided clear membership prospects, Poland and the Baltic countries could send troops to Ukraine themselves."

 

  If individual NATO countries, such as Poland, Lithuania, Latvia and Estonia, can declare war on Russia freely and independently of NATO, then Ukraine, after becoming a NATO member, could also do so. Ukraine has already shown a willingness to attack Russian territory, although the West, for its own security, is asking Ukraine not to do so. If Ukraine were a member of NATO, America would have to support Ukraine attacking Russia with nuclear weapons. Therefore, Ukraine is not and will never be a member of NATO.

 

Kodėl Ukraina nėra NATO narė?

 "Buvęs NATO vadovas Andersas Foghas Rasmussenas (Andersas Fouhas Rasmusenas) teigia, jog Kyjivui nesuteikus aiškių narystės perspektyvų Lenkija ir Baltijos šalys galėtų pačios siųsti karius į Ukrainą."

 Jeigu atskiros NATO šalys, kaip Lenkija, Lietuva, Latvija ir Estija, gali laisvai ir nepriklausomai nuo NATO paskelbti karą Rusijai, tai Ukraina, tapus NATO nare, taip pat tą galėtų. Ukraina jau pademonstravo polinkį puldinėti Rusijos teritoriją, nors Vakarai, dėl jų pačių saugumo, prašo Ukrainą to nedaryti. Jei Ukraina būtų NATO narė, Amerika privalėtų ją užstoti su branduoliniais ginklais. Todėl Ukraina nėra ir niekada nebus NATO narė.

Ukrainians leave Poland for the West. They don't want to wait for economy's recovery

“The slowdown on the labor market in Poland and high inflation may have prompted some refugees from Ukraine to leave for the West, mainly to Germany and Canada.

  Ukrainians are no longer waiting in line for work, says Krzysztof Inglot, an expert and founder of the Personnel Service employment agency, which specializes in recruiting employees from abroad, mainly from Ukraine. As he admits, in the current recovery on the labor market, which he has been observing since May, he was surprised by the low supply of workers from Ukraine. "Usually, they waited for a flood of offers during this period, but something changed this time," assesses Inglot.

According to him, the decreasing supply of workers from Ukraine is visible in all industries. The smallest problem is in odd jobs, especially those available to women. On the other hand, there has been a deficit of men from Ukraine.

Will Moroccans pick strawberries in Poland? Polish fruit producers are also nervously looking for employees in Nepal, Indonesia and other countries in Asia and even Africa.

Too few selections

According to the Personnel Service expert, the current deficit of employees from Ukraine is caused by a clearly noticeable slowdown in the economy on the labor market. This was well demonstrated by the report of the Polish HR Forum for the first quarter of this year, recently published in Rzeczpospolita, when a total of 235,000 people were employed. temporary workers - more than 6 percent. decrease compared to the beginning of 2022

Although almost eight out of ten newcomers from Ukraine work, and most are satisfied with their work in our country, the mismatch of their qualifications remains a challenge, especially among refugees.

Even more, by 8 percent. – up to 43 thousand – the number of hours worked in terms of full time equivalents (FTE) has decreased. The slowdown in the industry, which is the main recipient of temporary work services, contributed to this. – Companies reduce costs, which also reduces employment, and in the first place they give up temporary employees – comments Anna Wicha, president of PFHR.Their number fell by 2.9 percent, and in April by 6.4 percent year on year.

According to Krzysztof Inglot, employees from Ukraine, who in the first months of this year did not see such a large selection of job offers as before, started looking for work in other countries, especially in Western Europe and Canada.

Fall in social security system (ZUS)

In the first quarter of this year, According to the "Barometer of the Polish Labor Market" study by Personnel Service, Poland turned out to be the preferred country of economic migration for 20 percent. It was followed by Canada and the USA with the same share of indications, slightly ahead of Germany (16%).

According to German statistics, over one million (1.07 million) war refugees from Ukraine are already registered there. This is a similar number as in Poland, where at the end of March less than one million Ukrainians used temporary protection (confirmed by a PESEL number with UKR status). Alarming recently about the exploitation of seasonal workers from Central and Eastern Europe, the German media pointed out that last year, Ukrainians came to German fields and plantations.

Migrants from other countries cannot count on such good conditions of stay in Poland as newcomers from Ukraine. And this - apart from cultural proximity - affects their high professional activity on the Vistula.

“Employees from Ukraine migrate all over Europe because they can, and hourly rates are higher not only in Germany, but even in the Czech Republic, so you don't have to go far from Poland,” notes Anna Dzhobolda, director of the international recruitment department at the Gremi Personal employment agency. It also now has a labor shortage, although this is mainly due to the increased, seasonal demand for employees.

A recent study by the Gremi Personal Analytical Center and the Łódź Special Economic Zone showed that most of the companies operating there increased the share of Ukrainians among employees, and only 5 percent recorded their outflow. This outflow is indicated by the April ZUS data. While the total number of foreigners in ZUS registers increased to a record 1.078 million, employees from Ukraine - for the first time before the period of seasonal work - decreased slightly (by 1.1 thousand people).

Permanent stay overseas

Both the Personnel Service and EWL surveys, as well as the employment agencies themselves, assess that the main advantage of staying and working in Poland for Ukrainians is the geographical and cultural proximity of our country. According to Anna Dzhobolda, due to cultural closeness, Ukrainians feel better at working among Poles. The more that the lesser barrier is the lack of knowledge of the language. The presence of family and friends who have been living and working here for a long time is also significant.

Already 74 thousand. of foreigners stay in Poland with a visa from the program that helps us become a global IT hub.

Large Ukrainian Diaspora is also a factor that increases the willingness to go to Canada, where the number of refugees and migrants from Ukraine has been growing rapidly in recent months. According to the Canadian service CTV News, by mid-March this year. 190,000 came to Canada Ukrainians on the basis of a special migration program and a three-year Emergency visa issued to them, which has already been granted to over 610,000. citizens of Ukraine. Their number may increase because the federal government extended the possibility of applying for these visas (until mid-July this year), and Canadian Prime Minister Justin Trudeau recently announced that Ukrainians who came under a special migration program will be able to apply for permanent residence in Canada.

– If the deficits of employees from Ukraine visible in May continue or deepen in the coming months, this may generate greater wage pressure, especially in the lowest paid professions – predicts Krzysztof Inglot."