Morning Business Memo…
The price of brand-name drugs has been soaring, but at the same time generic prices fell. A new report by pharmacy benefits manager Express Scripts says prices for widely used brand-name drugs rose more than six times the rate of inflation from September 2011 to September 2012. The increase was more than 13 percent while generic drug prices dropped by nearly 22 percent. Government and private insurance plans encourage patients to use cheaper generic drugs as they try to control costs. The Pharmaceutical Research and Manufacturers of America, a trade group that speaks for drug companies, criticized the Express Scripts report, saying it was cherry picking some of its findings, which were skewed by a small number of specialty drugs.
If you want to know how the fiscal cliff negotiations are going, one way is to check the daily swings of the stock market. Although the financial markets often respond to mere rumors, right now the speculation is that prospects for a deal could be improving. Talk of possible compromise by both Democrats and Republicans to avert the fiscal cliff sparked stock market gains. The Dow Jones index rose 107 points yesterday. Stock futures are higher this morning and global averages are up. Comments by both President Obama and House Speaker John Boehner that a deal could be reached by the end of this year were enough to boost markets. Concern that tax hikes could be triggered in the New Year has weighed on stocks since the election.
Construction jobs are coming back, but where are the workers? The revival of housing market and commercial real estate has many contractors scrambling to find qualified workers. "The crunch is affecting a handful of states, including Texas, Arizona, Iowa and Florida," says USA Today. "It's expected to worsen across the USA over the next few years." Contractors reportedly are raiding each other's job sites, in some states, to look for workers - who either left the field, retired or moved somewhere else. It's a problem that could spread as the economy improves.
The slow improvement in the economy gave a boost to entrepreneurship in the US last year. That's the finding of a study released today by Babson College in Wellesley, Massachusetts and Baruch College in New York. The study shows that more than 29 million people were starting or running new businesses last year. That was a 60 percent gain from 2010, when entrepreneurship was hurt by the weak economy.
Moody's is lowering its long-term credit rating for Hewlett-Packard, saying the technology company will have trouble increasing sales of many of its products. The ratings firm says it lowered H-P's senior unsecured credit rating by one notch, to "Baa1?. The rating agency cites concerns that H-P's finances will remain weaker than previously expected "over the immediate term." A Moody's executive says the company's revenue will probably decline next year and its profit margin will narrow.
Richard Davies Business Correspondent ABC NEWS Radio ABCNews.com twitter.com/daviesabc