Why are profits surging so much?

Corporate profits have come roaring back to life, with the S&P 500 beating the average analyst expectations by more than half in Q4, according to its latest earnings season. For one reason, though, profits…

Why are profits surging so much?

Corporate profits have come roaring back to life, with the S&P 500 beating the average analyst expectations by more than half in Q4, according to its latest earnings season.

For one reason, though, profits have not yet reached the same scale of splurge that they did before the financial crisis of 2008: They’re still only back to the 2008 peak before the global meltdown.

That’s because of the DRAM chip shortage, which caused prices to rise about five times as fast as they do now. Forrester says shortages of DRAM chips – essential for many popular smartphones and tablets – increased shipments by more than 400 percent in the last few quarters.

Chip makers like Apple (AAPL), Intel (INTC) and Samsung (SSNLF) have already blamed the DRAM shortage for the troubles they’re currently experiencing.

The good news is that the DRAM shortage looks like it’s temporary. It’s also bad news for Volkswagen (VLKAY), GM (GM) and Ford (F), all of which depend on Samsung and Intel to produce their DRAM chips. If both companies can’t meet demands, GM might have to hike car prices significantly, Ford might have to start shutting down plants, and even Google’s Motorola division might have to do the same.

Then there’s the whole ethical conversation surrounding the rise of patent trolls.

The cost of drugs in some European countries have risen far faster than those in the US. The reason is a policy, meant to rein in drug-price gouging, that allows drug companies to charge whatever they want in the European market. A survey found that drug prices in the UK had risen by 200 percent since 2002, and that the average 10-year gain in prices for cancer drugs in the UK was 125 percent.

The UK’s Ministry of Health has always ensured that drug companies have to prove their product is helpful to patients before it’s reimbursed for by the government. This “evidence-based” approach works for cancer treatments, in most of the cases. However, we don’t think it’s appropriate for other diseases like diabetes.

Partly as a result of these two policies, more than 600,000 Europeans currently have no access to essential medicines, and that number is increasing. Essentially, that means that patients who are stuck in the dark about whether they really need a new medication are forced to pay for it out of pocket, or if they can afford to go without, often resort to dangerous and unproven therapies like unlicensed drugs.

So what are drugs that aren’t evidence-based doing suddenly available here in the US?

And how can regulators help fix it?

That’s what we want to ask you. Send us your thoughts and questions to Human [email protected]

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