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The healthcare sector is weighing heavily on the UK Index this morning (specialty pharma in particular) with the quartet of Astra, Glaxo, Hikma and Shire making up for over 35% (18pts) of the index’s declines, enough to keep it below the key 6800 mark. This comes after US peers finished the day on the back foot thanks to fresh political disquiet about excessive and potentially unethical pricing of life-saving drugs, Democratic presidential candidate Hillary Clinton demanding that generic and specialty pharma group Mylan lower the ‘outrageous’ price ($300; +500% over 6 years) of its allergy injection EpiPen.
This echoes the populist swipe and US congressional challenge of Martin Shkreli, founder and former CEO of Turing Pharma which recently hiked the price of an Aids medicine by 5,000% overnight. It also serves to strike fear into the hearts of healthcare groups and their investors everywhere. As always, the industry remains between a rock and a hard place, treading the fine line between balancing the costs of clinical success (and failure) with the economic laws of supply and demand, all the while trying (often in vain) to satisfy demanding stakeholders without appearing to view the sick as merely a commercial opportunity.
Mike van Dulken, Head of Research, 25 Aug
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