Nachfolgend der original Kommentar der Pictet-Experten:
President Obama released a first outline of his goals in healthcare and provided some concrete details in his fiscal 2010 budget. The most important items to come out of this statement and its implications for the PF(LUX)-Biotech fund are summarized below by Michael Sjöström, founder and Chief Investment Officer of Sectoral Asset Management and Senior Fund Manager of the PF(LUX)-Biotech fund.
"Obamacare"
"Obamacare", limited impact on biotechs, as expected: Not surprisingly, the overall goal is to provided Americans with universal healthcare coverage. While there were no details on how this will be achieved, it is clear that the cost will be substantial, well in excess of USD 600bn over ten years. Its financing will require concessions from all the parties involved: government, insurers, employers and suppliers of healthcare services and goods. This re-emphasizes that the pricing framework for healthcare companies is not going to get any easier. Innovators and providers of low-cost solutions will be the ones most likely to best navigate in this environment.
The important outcome of the 2010 fiscal budget:
- A commitment to create a pathway for generic biologics. This seems to be the main source of investor worries, which sent the Nasdaq Biotech Index down by almost 9% in the last two days of February. We firmly believe that the US will put in place an approval pathway for generic biologics, as already exists in Europe. We are equally convinced that this will, as in Europe, require generic biologic manufacturers to perform relatively extensive clinical trials, thereby increasing the required investment and reducing the number of players in the segment. As a consequence, the markets for follow-on biologics will not be anything like the current markets for commodity pharmaceuticals. They will be oligopolies.
- Re-considering the re-importation of drugs from cheaper countries, like Canada. The real world impact of such a measure is widely overestimated. The quantities that could be supplied to the US markets are limited.
- Allowing competitive bidding in Medicare Advantage (a privatized form of Medicare).
- Increasing the mandatory Medicaid rebate from 15% to 22%. Currently, firms supplying drugs to Medicaid have to offer a 15% discount on the list price. An increase to 22% would certainly hit margins, however, list prices could be increased too.
Biotech (and pharmaceutical) stocks will recover
In conclusion, nothing really new was unveiled last week. In addition, nothing has been put into legislation yet and there will be several meetings between Capitol Hill and the White House. The market´s reaction was significantly exaggerated and disorderly, highlighting investors current nervousness. Stocks like Gilead and Celgene suffered alongside Amgen and Biogen, demonstrating that investors did not make any distinction between manufacturers of biologics and others.
While we believe that biotech (and pharmaceutical) stocks will recover in due course from this disorderly sell-off, we also recognize that such a recovery might not be immediate in an already fragile equity market. Fundamentally, we think the first moves of the Obama administration in the field of healthcare policy are consistent with the outlines provided during the campaign. Universal healthcare in the US will benefit the industry by pulling in some 50 million new consumers. The cost will be greater pricing pressure as the federal government will become the industry´s main customer. Again, innovators, biotechs and selected med-tech companies, along with providers of low-cost solutions, namely generics, are best suited to navigate this environment.
