As a sales and marketing person, there is nothing more exciting than getting a chance to play in the sand!
With the advent of Healthcare Reform (specifically changes in Medicaid reimbursment provisions), many Big Pharma groups are taking full advantage of the opportunity to dampen future earnings estimates as reported in Seeking Alpha. This despite a seeming positive turn in the economic environment and the fact that the sector as a whole beat industry analyst estimates by 3% on sales and a more impressive 10% on EPS.
However, given the clear immediate term impact of changes in Medicaid discount rates from 15.1% to 23.1%, it is a great time for Big Pharma to restate earnings estimates for the balance of this year and next. This is also an opportunity to set the bar at a target that can be more easily hit! At least 1/2 dozen major companies have done just that in the past couple of weeks.
Katherine Hobson of the WSJ Health blog has been keeping a nice running total of companies who have downgraded their revenue and earnings estimates for the balance of 2010 and 2011.
With any luck, these Companies should be able to beat these estimates & look like heroes. Let the sandbagging begin!
Posted by Bruce Lehr May 12th 2010.