Why Secular Trends May Hurt Some Companies and Benefit Others?by Bill Miller
The secular trend in healthcare is cost containment. How do you slow the growth in the total cost of healthcare as a percentage of GDP? The convergence of secular trends in healthcare will not be positive for big pharmaceutical companies. It has been and will be positive for companies like Aetna and United Healthcare. The cost structures of companies that have earned excess returns for decades don’t reflect a lot of competition. That’s where the danger is when the secular trends change – because these companies have a culture that doesn’t know how to compete – but it’s also the opportunity when someone comes in and changes things.