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| Author: | Lippman, S. Rosan, D.E. Seitchik, A. |
| Title: | Why lower drug prices benefit institutional investors: An application of universal ownership theory |
| Journal: | Corporate governance
2007 : MAY, VOL. 15:3, p. 455-466 |
| Index terms: | institutional investors pharmaceutical industry prices health service costs social responsibility theories |
| Freeterms: | ownership |
| Language: | eng |
| Abstract: | This paper deals with the net impact of cuts in drug prices (here as: d-prs.) on investor portfolios. It is found that falls in pharmaceutical company profits resulting from price cuts would be largely, if not fully, offset by a combination of health plan cost savings and increases in consumer spending power. In addition, falling d-prs. benefit investors through the dynamic benefits from a healthier workforce with greater access to prescription drugs. It is concluded that (as to the "universal investor"s perspective), support for lower d-prs. is consistent with a fiduciary duty to seek attractive long-term returns at the portfolio level. |
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