|
|
ONLINE FEATURES
Book Reviews
BW Video
Columnists
Interactive Gallery
Newsletters
Past Covers
Philanthropy
Podcasts
Special Reports
BLOGS
Auto Beat
Bangalore Tigers
Blogspotting
Brand New Day
Byte of the Apple
Economics Unbound
Eye on Asia
Fine On Media
Green Biz
Hot Property
Investing Insights
Management IQ
NEXT: Innovation
NussbaumOnDesign
Tech Beat
Working Parents
TECHNOLOGY
J.D. Power Ratings
Product Reviews
Tech Stats
Wildstrom: Tech Maven
AUTOS
Home Page
Auto Reviews
Classic Cars
Car Care & Safety
Hybrids
INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | |
MARCH 21, 2005
What's Really Behind Pfizer's Funk? Despite extensive research, Pfizer Inc. (PFE ) and the other drug companies have to realize that the industry is maturing and no longer capable of returning profit margins of 40% ("Pfizer's funk," Cover Story, Feb. 28). The stock market has already accepted the fact, as price-earnings ratios have been steadily declining for this segment. The reevaluation is reminiscent of chemical companies in the 1960s and 1970s. Despite large research expenditures, they became a mature industry with shrinking profit margins and lower p-e ratios. History is repeating itself. Nelson Marans Silver Spring, Md. Your analysis of what happens when pharmaceutical blockbusters fizzle focuses only on economic consequences. What about the human cost? Unlike other industries, which are driven by product improvements catering to convenience and fashion, pharma caters to life. Discovering and developing new drugs is getting more difficult and expensive. The low-hanging fruit has been plucked. As the pipeline dries up and the supply of new and innovative drugs declines, it will come at a cost to human health and lives. It's time to look for ways and regulations to support pharma -- not strangle it. Jasjit S. Bindra Groton, Conn. Amy Barrett wrote that CEO Henry A. McKinnell Jr. said he had an executive coach who advised him to "stop jumping in with an answer before someone has finished talking." Excellent advice. However, if, as McKinnell states, he tends "to know your question before you ask it," the advice has fallen on deaf ears. Granted, if he pauses before answering, he may be perceived as someone who listens, and this may improve his relationships with others. Those who study communications will tell him that as long as he continues to think he knows the answer before the question is asked, he is not really listening. He is busy formulating his response, and most of us are not good enough to do that and listen at the same time. Are you listening, Chairman McKinnell? Aaron Gewirtz University of Maryland University College Ramstein, Germany I would suggest that Pfizer should concentrate more on new products and outsource the total marketing chain, making it a separate business center. This will help McKinnell concentrate more on the core part of the business. Vinay Singhal Goa, India Why S&P Companies Raked It In Last Year The excellent article "A persistent profit machine" (Corporate Scoreboard, Feb. 28) reports that profits for U.S. corporations are up about 25% in the last quarter of 2004, and there was a 14% increase in revenue from last year. The article fails to point out why U.S. corporations from the Standard & Poor's 500-stock index are doing so well. U.S. multinationals produce about $2.5 trillion of goods and services abroad -- about a quarter of U.S. gross domestic product. We observed a plunge in the dollar last year against other major currencies, particularly the euro and yen. In 2004 the dollar declined 18%, and the greatest decline occurred in the last quarter. That translates into higher profits for U.S. multinationals producing abroad and repatriating their profits to the U.S. The greatest profits were reported in the last quarter of 2004, when the dollar was at a record low rate of $1.37 to the euro. Examining the profit scoreboard, one can observe that higher profits for companies relate to a high degree of multinational production. Pelegrino Manfra New Rochelle, N.Y.   Microsoft's New Weapon In The Game Wars As an amateur video game writer and player, I believe "Game wars" (Entertainment, Feb. 28) underestimates the growth potential for Microsoft Corp. (MSFT ). The next-generation consoles for all three major game manufacturers are going to be based on the same type of IBM (IBM ) supercomputer processor. Microsoft's next-gen software platform, called XNA, will cut video game production budgets by as much as 80% by having a standard operating code that is shared across the platform. As a game maker, you will be able to spend more time (and money) on the creative side of the job. Also, the XNA platform will be shared across all next-gen Microsoft products, including the new version of Windows, Windows for cell phones, and Windows for next-gen PDAs. A game for one system will require that little, if any, modification be made for another system. More than 20 major U.S. game developers, including Electronic Arts (ERTS ) and Ubisoft, have been working with XNA for over the past year and a half, while not one major U.S. developer has announced it is working with Sony's (SNE ) new platform for their next-gen console. I think it's safe to say Microsoft will be a potential winner in the video game industry, which is why I was sad to see it omitted from your list. Carl A. Patrick Cincinnati Medicaid And The Middle Class It is overly simplistic to blame Medicaid's problems on the legal shifting of savings by the middle class ("The new face of Medicaid," Government, Feb. 21). Financially helping one's children and grandchildren is not amoral; it is part of the fabric of our society and helps our economy through the spending and consumption of the younger generation. At an average cost of some $9,600 per month for nursing-home care on Long Island, N.Y., even many of the so-called wealthy who end up in nursing homes will find themselves on Medicaid. If the federal government redirected a more realistic portion of the taxes we already pay toward the high cost of nursing-home care or otherwise addressed the problem, perhaps the state and its counties would not now be facing such a financial burden. Thomas J. Pellegrino New York I have been practicing Medicaid law in California since the inception of the "spousal impoverishment" provisions in 1989. While many contend there is widespread abuse of the system, one glaring inconsistency in the law remains unaddressed. Those who try to care for their spouses at home are reduced to keeping a scant $3,000 in assets (excluding the home) and $934 in monthly income before they can qualify for Medicaid benefits. Meanwhile, those who send their spouses to skilled nursing facilities are permitted to keep $95,100 in assets and $2,378 in income. This forces seniors and the disabled into nursing homes rather than allowing them to remain in their homes. Sara G. Senger McKinleyville, Calif. "Mooching off Medicaid" (Editorials, Feb. 21) castigated middle-class seniors for shifting assets to relatives to qualify for government-paid long-term nursing care. There can be honest debate over whether the established rules on who qualifies for government-paid nursing home care should be changed. But no one should be accused of immorality for simply following the rules. Ben Gumm North Berwick, Me. Long Commutes Have Their Joys, Too I would have gladly enumerated the advantages and pleasures of "Extreme commuting" (Working Life, Feb. 21). On a daily basis I drive, board a bus, do some walking, and then take two subways to reach my office at the southernmost tip of Manhattan. When I board the bus, I am on my "cruise ship," during which time I have the marvelous luxury of relaxing, reading, planning, etc. The subways give me a precious insight into America, which I would never understand were I to remain behind the lavish shrubbery of my suburban milieu. I have met some marvelous people during my commute, one of whom, a corporate chairman, has become my treasured friend. The commute keeps me energized, enthusiastic, and informed (as does my subscription to BusinessWeek). Evanne Geltzeiler Mountainside, N.J.
| | |
 Copyright 2005, by The McGraw-Hill Companies Inc. All rights reserved.Terms of Use | Privacy Notice |
Printer-Friendly Version
