Displaying items by tag: pharmaceuticals

(New York)

Market breadth has not been very good this year. In fact, it has generally been terrible. Tech stocks have delivered virtually all the gains. However, one bright spot in this uneven landscape has been healthcare shares, and that seems likely to continue. According to Barron’s, “Positives in the sector include attractive valuations, upward earnings revisions, share buybacks, and policy tailwinds”. Drug price pressure is still a concern for pharma companies, but right now things look strong, with over 90% of companies in the sector beating earnings forecasts.

FINSUM: We will be honest in saying that we do not have much expertise in the sector, but demographics also seem to be a supportive factor for the long-term investor.

(Washington)

President Trump made what may turn out to be a landmark move yesterday when he announced a proposal to reign in drug prices. The plan is a blueprint to drive down costs, and it transfers more power to health insurers to compete on pricing. Medicare is also involved, as the huge US health care service has a major influence on drug prices. Critics say the plan falls well short of what Trump promised during his campaign, when he said drug companies were “getting away with murder”.

FINSUM: We do not fully have the expertise to comment on the potential effectiveness of the plan, but it certainly seems a step in the right direction, and one in which drug company shareholders don’t need to be too worried.

(Seattle)

There have been numerous articles covering it over the last few months, and it has caused some excitement and alarm in the market. The story? Amazon is going into healthcare. The hype started to build when Amazon received licenses to be a pharmaceuticals distributor. Now, Barron’s has published a piece explaining why Amazon sees an opportunity. The Internet of Things is supposed to transform the pharmaceutical and healthcare business and Amazon wants to be a part of that, especially now that it has the explicit goal of trying to lower healthcare costs in the US.

FINSUM: We think the high-minded goal of lowering healthcare costs needs to be thought of separately than Amazon’s interest in drug distribution. The fact is, the company sees a solid-margin business it can eat up with its logistics prowess.