Big Pharma Catches a Chill, Fearing Democrats' Prescriptions on Pricing
Fears that Democrats will tackle drug pricing have investors reconsidering the pricing of drug stocks, too.
Shares of major pharmaceutical companies slipped yesterday amid concerns that Democrats will push for changes that could cut prices paid under Medicare for some medications, among other things. Still, analysts cautioned that Democratic control of the House of Representatives is unlikely to bring much immediate change for the industry. For one thing, many proposals on the Democrats' agenda could face a veto from a Bush White House, if they make it that far.
Even as the Dow Jones Industrial Average hit a record, the Dow Jones Wilshire U.S. Pharmaceuticals Index fell 1.7%, a reversal from the upward trend that has lifted the group about 17% in the past 12 months. Merck shares fell 3.4%, Schering-Plough lost 2.5% and Pfizer dropped 1.6%. (Options on drug stocks also stir. See article.)
Also weighing on drug stocks was Merck's disclosure Tuesday that U.S. and Canadian authorities are requesting an additional $5.58 billion in taxes and interest going back to 1993. GlaxoSmithKline, the British pharmaceuticals company, agreed to settle a similar dispute with the Internal Revenue Service two months ago, which cost it roughly $3.1 billion.
Analysts stress that the major challenge to the industry isn't Washington rhetoric but issues that drug makers have struggled with for years -- few new drugs in the pipelines and threats from generic competitors. Although Big Pharma hasn't freed itself from those concerns, signs of progress have driven drug stocks' strong performance so far this year.
At least some drug companies appear to be refilling their pipelines with products that can take the place of blockbusters that will lose patent protection and taking other steps to ameliorate the situation. Merck, Schering-Plough and Pfizer are in varying stages of aggressive restructuring programs. Merck has had five new drugs approved this year alone.
The rumblings in Washington may be a short-term distraction. "We continue to view a potential recovery in the sector's pipeline as a more important long-term value driver" than the elections, Banc of America Securities analyst Chris Schott wrote in a recent note to clients. "We see many near-term positive pipeline catalysts."
Catherine Arnold, a pharmaceutical analyst at Credit Suisse, says next year's earnings look to benefit from favorable comparisons to this year, which saw profits hit by generic competition, and by increased benefits from cost-cutting programs. But she is neutral on drug stocks, noting that clouds loom with a presidential election in 2008 and potentially lower prices.
Democratic leader Nancy Pelosi of California, who is expected to become speaker of the House, has said Democrats will introduce legislation allowing the government to negotiate directly with drug companies to secure better prices for medications offered to senior citizens under Medicare. Democrats also have backed making generic drugs more accessible and expanding the ability to import cheaper drugs from overseas.
Democrats' new dominance in the House -- and possibly the Senate -- could bolster drug-safety efforts at the Food and Drug Administration. Democrats have a chance to put their stamp on critical legislation that must be renewed next year, including FDA user fees and the law that gives drug companies extended protection against generic competition if they study the use of their medications in children. Democrats will be able to launch and lead investigations and oversight hearings that will likely focus on drug pricing and safety.
Rep. Henry Waxman of California, who will now be chairman of the House Government Reform Committee, has introduced a bill to create a pathway for generic versions of biotech drugs. Though the complexity of the issue makes quick legislative changes unlikely, it will likely find more traction with Democrats in charge. Democrats are also eyeing other moves, including boosting funding for the FDA's generics-drug office. They may also look to discourage some tactics that the branded drug makers use to protect their turf, such as deals for so-called "authorized generics."
"There's no question that the world just changed for us, but it's not a big surprise, and no one's panicking," said Ken Johnson, senior vice president at the Pharmaceutical Research and Manufacturers of America, the industry trade group. He vowed to redouble public-relations efforts leading up to the 2008 presidential election, which he called "even more important" than most elections for the drug industry.
Implementation of the Medicare prescription-drug benefit shored up drug-company revenues during a research and development drought, and fed healthy profits, especially toward the end of this year. Industry executives say the Medicare drug benefit has served patients well, with high satisfaction and lower costs than originally forecast. "The free market has created competition and prices are going in the right direction," said Tony Zook, president and chief executive of AstraZeneca's North American unit.
Analysts said yesterday's stock-price declines reflected a psychological defeat for the drug companies rather than anything immediate that could affect their businesses. "The stocks are reacting to the perception that Democrats are in charge, and Democrats are mean to the drug industry," said Richard Evans, a pharmaceutical analyst at Sanford C. Bernstein & Co.
Some on Wall Street are concerned about whether the election results foretell a Republican loss in 2008. "If this is an indictment of the Republicans, then it does not give the industry a warm-and-fuzzy feeling for the presidential election in 2008," said Barbara Ryan, a pharmaceutical analyst at Deutsche Bank.
In the near-term, Democrats are likely to support new powers for the FDA. A senior Democratic House staffer with experience in health care says Democratic lawmakers are likely to be "very receptive to the recommendations" in a recent report from the Institute of Medicine, an independent research organization that advises the federal government. Changes called for in the report include restrictions on direct-to-consumer advertising for the first two years a drug is on the market.
中期选举大局已定 医药类股应声下跌
美国中期选举大局已定，民主党占据上风已成定局，有鉴于此，担心药价可能会下调的投资者也开始重新考虑医药行业的股价前景了。
昨天，大型医药公司的股价出现下跌，市场担心，民主党可能会作出一些改革动作，比如要求下调医疗保健项目部分报销药品的价格。不过，分析师提醒说，民主党获得众议院控制权后不太可能立刻对医药行业拿出很多改革措施。首先一个原因是，民主党议程表上的许多提案如果走得太远，必定会遭白宫腰斩。
尽管道琼斯工业股票平均价格指数创下记录高点，但道琼斯威尔希尔美国医药类股指数却一改前期的上扬走势，下跌1.7%。过去12个月来，医药类股总体呈上扬走势，累积涨幅达到17%。个股方面，默克(Merck)跌3.4%，先灵葆雅(Schering-Plough)跌2.5%；辉瑞(Pfizer)跌1.6%。此外，医药类股期权也出现大幅震荡。
默克周二披露的一条消息又给制药类股当头一棒。默克称，美国和加拿大政府要求该公司补交可追溯到1993年的55.8亿美元税款及利息。此外，两个月前，英国制药公司葛兰素史克(GlaxoSmithKline)已同意就类似纠纷与税务部门达成和解，为此，该公司需从腰包里掏出大约31亿美元。
分析师强调说，对制药业来说，现在的主要难题并不是华盛顿的政策法律会有什么变化，而是新药匮乏及仿制药的激烈竞争这些他们多年来一直疲于应付的老问题。不过，虽然大型制药公司尚未完全摆脱这些问题的困扰，但已取得不少进展，今年以来，他们的股价也因此表现不俗。
不过，至少已有一些制药公司的研发部门正在酝酿新产品，这些产品带来的收入将对畅销药专利到期后的销售下滑有所弥补；同时这些公司还在采取其他步骤缓解困难局面。默克、先灵葆雅和辉瑞都在进行大规模重组，虽然各家的进度有所不同。
至于华盛顿酝酿的潜在变革或许不会产生长期的影响。美银证券(Banc of America Securities)分析师克里斯?斯科特(Chris Schott)在给客户的研究报告中表示，我们仍认为，制药业在新药研发方面可能到来的复苏对制药类股长期价值的推动作用将比这次选举更重要。我们已经看到了许多近期能对研发起到积极推动的迹象。
瑞士信贷(Credit Suisse)制药业分析师凯瑟琳?阿诺德(Catherine Arnold)说，由于今年制药企业的盈利受仿制药竞争影响较大、从而使今年的利润偏低，相信这对明年的盈利增幅会比较有利。此外，制药公司的成本削减措施也将对明年的利润增长有助益。不过，阿诺德对制药类股整体持中性评级，她认为，2008年总统大选及大选后药价可能下调的前景将给该行业留下阴影。
有望成为众议院议长的民主党领袖南希?佩洛西(Nancy Pelosi)曾表示，民主党有可能提出立法议案，要求允许政府与制药企业直接谈判，确保面向老年人口的医疗保障计划报销药品的价格更易接受。民主党还曾支持让仿制药更易获取，并加强从海外进口低价药品的能力。
民主党重新控制参、众两院有望给美国食品和药物管理局(FDA)加强药品安全的工作带来更多支持。在必须于明年更新的重要法案中，民主党届时将有机会加入他们的想法。这些法案包括FDA许可使用费，还有对那些研究药品对儿童疗效的制药公司，可允许延长他们的专利药有效期等等。民主党将可以牵头发起有关药品价格和安全问题的相关调查和听证活动。
将出任众议院政府改革委员会主席的加利福尼亚共和党人亨利?威克斯曼(Henry Waxman)提出了一项议案，要求给生物药品的仿制药提供生存空间。虽然立法方面不太可能对这个复杂问题很快作出调整，但民主党主政国会后，它将获得更多的推动。民主党还在考虑其他措施，比如增加对FDA仿制药办公室的拨款等等。他们可能还会提出阻止大型制药公司采取某些旨在保护自身利益的手段，比如所谓的“授权仿制药”等。
美国医药行业组织Pharmaceutical Research and Manufacturers of America高级副总裁肯?约翰逊(Ken Johnson)说，制药业周围的环境无疑发生了变化，但并没有什么太大意外，没有人因此惊慌失措。他表示，在2008年大选之前，他们将进一步加强在公共关系方面的努力。他认为，这次大选将比其他大多数选举对制药业更重要。
医疗保健计划实施的处方药福利使制药公司在新药研发处于低潮时期在收入方面获得了很大支撑，这也给他们带来了丰厚的盈利，特别是年底前的这段时间。
业内人士说，联邦医疗保险计划对患者非常有帮助，患者们的满意度很高，参保成本也低于人们原先的预期。阿斯利康(AstraZeneca)北美子公司首席执行长兼总裁托尼?祖克(Tony Zook)表示，自由的市场带来了竞争，药价正沿着正确的方向调整。
分析师表示，昨天的股价下跌只是市场对制药公司的一种心理反应，不会对企业的业务产生任何立竿见影的影响。Sanford C. Bernstein & Co.制药业分析师理查德?埃文思(Richard Evans)说，有观点认为，现在民主党占上风了，而民主党对制药业是不会客气的，昨天的股市就反映了这种观点。
华尔街一些人士现在担心，不知道这次中期选举的结果是否意味着共和党在2008年的大选中也没有机会了。德意志银行(Deutsche Bank)制药业分析师芭芭拉?瑞恩(Barbara Ryan)说，如果这次选举结果被视为对共和党的宣判，那么，制药业对2008年的大选也不会有什么舒心的感觉。
近期而言，民主党可能会支持FDA的新权威。一位有保健行业背景的众议院民主党高级职员表示，对医疗学会(Institute of Medicine)近期提交的报告提出的建议，民主党议员可能会作出非常认可的表态。医疗学会是一家为联邦政府提供咨询意见的独立研究机构。该学会在报告中提出的建议包括，对一种药品在上市后前两年所作的直接面向消费者的广告应有所限制。
Avery Johnson / Anna Wilde Mathews
