The American Dental Association spends millions on lobbying in Congress each year and has a surprisingly significant pull on our legislative system.
In 2010 (a Congressional election year) the ADA spent $13 million on funding state and local politicians to get favorable votes. As an example of their pull, they successfully lobbied in 1965 to keep dentists out of Medicare. Now, in the midst of the 2012 election, it looks like they're going to open their checkbooks even wider.
A recent ADA newsletter claimed that the political backing and lobbying is to “keep well-intentioned fools from doing stupid things”, while referring to dentistry as a whole.
Dentistry Under ObamaCare
Part of the recently passed healthcare bill, coined Obamacare, has a clause meant to spread dental care to low-income families and individuals. The provision would allow some non-dentists to perform lower level procedures currently done only by fully certified Dentists.
More specifically, Dental hygienists and therapists would be allowed to do routine cleanings and in some cases even drill for cavities. As of this moment, only Alaska and Minnesota allow mid-level dental care professionals to practice.
The ADA naturally feels hesitant. This threatens the demand for their higher-level services and could result in salary adjustments. Those who disagree with the ADA stand firm that allowing lower level tasks to be provided by hygienists and therapists is the most effective way to get oral care to the poor.
Another Threat- Keep 32
Keep 32, developed by Jose Cordoba of Yale University and Erich Astudillo of Universidad de Santiago in Chile, is a miraculous new oral cleansing tool that kills all bacteria in the mouth within 60 seconds. The chemical has been in development since 2005 and is now ready for human testing. It may find its way to the public within the next 12-18 months. The patented product can be used in gum, toothpaste, mouthwash, floss, candies, and dental gels. As long as it remains in your mouth for 60 seconds, it will eliminate all bacteria present.
UCLA has also developed a “Smart Bomb” mouthwash that kills “S. mutans”, the main cause of tooth decay. The wash was tested on 12 patients and successfully killed the bacteria after one rinse and kept the same bacteria away for four days. What differentiates this wash from others is that it only targets the harmful bacteria inside the mouth, leaving the good bacteria that protect teeth unscathed. The developers of this breakthrough are confident that the product symbolizes the end of tooth decay and in many cases, cavities. The developers received substantial backing from Colgate-Palmolive (CL).
So how can the ADA protect itself against the threats to their business? Well, they're going to start by throwing money at Republican candidates this election. President William Calnon says they will do this because "there are more of them in Congress" and because they "have a good track record embracing ideas we support." Translation: Republicans are going to go after Obamacare so we’re going to give them money.
If the dentists help the Republicans into office, we can assume there will be a long struggle to prevent Keep 32 and the Smart Bomb mouthwash from getting any FDA approval, even if it does prevent cavities (more than 50% of kids get them and 92% of adults will get at least one cavity at some point).
Business Section: Investing Ideas
If the ADA has their way and helps Republicans into office this November, do you think the part of Obamacare that includes dental hygienists and therapists will be upheld? And what about these breakthroughs in the oral health field? Are their positive affects enough to persuade Congress, or will this special interest group have its way?
The oral health industry reaches many people in not only the United States, but the world. From providing simple products like toothpaste and brushes to the more technical devices used by dentists and oral surgens, the industry is quite large. Below is a list of companies involved in dentistry who have considerable interest in the outcome of the events mentioned above.
Interactive Chart: Use the Compar-O-Matic to compare market caps for the stocks mentioned below:
2. Colgate-Palmolive Co. (CL, Earnings, Analysts, Financials): Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. Market cap at $49.81B, most recent closing price at $104.37.
3. Align Technology Inc. (ALGN, Earnings, Analysts, Financials): Designs, manufactures, and markets the invisalign system for treating malocclusion or the misalignment of teeth. Market cap at $2.49B, most recent closing price at $30.98.
4. Biolase Technology Inc. (BLTI, Earnings, Analysts, Financials): Develops, manufactures, and markets lasers and related products focused on technologies for improved applications and procedures in dentistry and medicine. Market cap at 55.9M, most recent closing price at $1.75.
5. Danaher Corp. (DHR, Earnings, Analysts, Financials): Designs, manufactures, and markets professional, medical, industrial, and commercial products and services primarily in North America, Europe, and Asia/Australia. Market cap at $34.84B, most recent closing price at $50.29.
6. Henry Schein, Inc. (HSIC, Earnings, Analysts, Financials): Distributes healthcare products and services primarily to office-based healthcare practitioners. Market cap at $6.96B, most recent closing price at $77.45.
8. Patterson Companies Inc. (PDCO, Earnings, Analysts, Financials): Operates as a distributor serving the dental, companion-pet veterinarian, and rehabilitation supply markets in North America. Market cap at $3.79B, most recent closing price at $34.37.
9. Sirona Dental Systems Inc. (SIRO, Earnings, Analysts, Financials): Develops, manufactures, and markets dental equipment for dentists worldwide. Market cap at $2.48B, most recent closing price at $44.66.
10. DENTSPLY International Inc. (XRAY, Earnings, Analysts, Financials): Designs, develops, manufactures, and markets dental consumable products, dental laboratory products, and dental specialty products worldwide. Market cap at $5.09B, most recent closing price at $35.92.
11. Young Innovations Inc. (YDNT, Earnings, Analysts, Financials): Engages in the development, manufacture, and marketing of supplies and equipment used by dentists, dental hygienists, dental assistants, and consumers primarily in the United States, as well as in Canada, Europe, South America, Central America, and the Pacific Rim. Market cap at $281.39M, most recent closing price at $35.80.
(Written by Ryan Horch)
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- Procter & Gamble Co. (PG, Chart, Download SEC Filings)
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- Align Technology Inc. (ALGN, Chart, Download SEC Filings)
- Biolase Technology Inc. (BLTI, Chart, Download SEC Filings)
- Danaher Corp. (DHR, Chart, Download SEC Filings)
- Henry Schein, Inc. (HSIC, Chart, Download SEC Filings)
- 3m Co. (MMM, Chart, Download SEC Filings)
- Patterson Companies Inc. (PDCO, Chart, Download SEC Filings)
- Sirona Dental Systems Inc. (SIRO, Chart, Download SEC Filings)
- DENTSPLY International Inc. (XRAY, Chart, Download SEC Filings)
- Young Innovations Inc. (YDNT, Chart, Download SEC Filings)
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