Food is Less Regulated than Medicine

     In big business news, Eli Lilly (LLY) has purchased the entire animal health segment of the Swiss multinational company, Novartis (NVS).

Lilly plans to merge the acquisition to its highly profitable Elanco business, which has a 60 year history.  "Elanco" derives from Eli Lilly ANd CO.

The integration of the two segments will create the second largest animal health business in the world, under Eli Lilly's control, with all of the streamlining advantages of size and resulting efficiency.

I have been analyzing this move, and believe that a large shift of capital from human medicine to food, and its production, is a smart decision for the following reasons:

(1) Obamacare is proving more stubborn than many expected.  I still predict that it will collapse.  However, the real danger is that it will settle into some kind of compromise that leaves American medicine much more regulated than it was at pre-ACA levels.

(2) Medicine is "needed" more than food in America.  This makes the takeover of the medical industry a more sympathetic issue to a lot of people.

(3) Massive government control over food production in this country lacks such a mandate--creating an inherently safer market to do business in.

(4) In light of Obama's across the board damage to the American economy, investors may want to know that Lilly's acquired Novartis animal health segment includes business that is 70% outside of the United States.

Eli Lilly still continues to remain a vibrant, human pharmaceutical company.  However, I agree with the expansion into food production and other animal products--as waiting around for the FDA to "approve" the legal purchase of medicine, while it blocks productive activity, is not a path to profitability.

One final note: If America can shake Obamacare, and reverse the Government Health Care slide, Eli Lilly (LLY), with the huge, pharmaceutical pipeline surge it has been investing in, should be in a much more advanced position to bring numerous, tested drugs to market than competitors that have been cutting their R&D budgets.

Paul Wharton
Objectivist Capitalist Medicine Promoter

Special thanks to Eli Lilly & Co. (LLY) for being the fuel of my mind