Today’s Managing Health Care Costs Number is 13.7%
Here's a shout-out to recent HSPH alum Michael Sinha, who co-authored “Physicians and Insider Trading”“ which was e-published by JAMA Internal Medicine yesterday. The article reviews the last 6 years of physicians who were accused of insider trading, and offers recommendations about how physicians and companies they work for and with can avoid insider trading.
The article references an article published in 2011 in the Journal of the National Cancer Institute that investigated stock price changes immediately before the public release of either positive or negative clinical trials. Stocks went up on the average 13.7% over the baseline price before a positive public release, and went down an average of 0.7% from the baseline price before a negative public release. The article published yesterday noted a few cases where investors provided with inside information from physician researchers where the avoided losses were in the hundreds of millions of dollars. The JNCI data does not reach clinical significance – but the graph tells an important story, and there’s every reason to believe that with a larger number of observations this will reach statistical significance.
Physician researchers have valuable information not available to the public about the future value of publicly traded companies. They cannot use that information, and should be exceptionally careful not to discuss it with anyone else!
