The Impact of Eliminating Rebates on Drugmakers

We like Roche, which has been less exposed to rebates and can defend its growth.

Karen Andersen, CFA 11.06.2019 | 9:04

 

 

Karen Andersen: The regulatory landscape for branded prescription drugs in the U.S. has become dynamic, with many proposals on the table for reducing drug spending. And with nearly half of revenue at top drug firms stemming from U.S. branded drugs, this has become a key issue in our analysis. Overall, we see the wide economic moats held by most of the large-cap drug firms we cover as steady, and as pricing pressure from competition and regulatory changes are countered by stronger patents, faster FDA reviews, and strong innovation. Our coverage in this area is on average more than 10% undervalued, as compared to a more fairly valued broader universe of stocks.

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Om forfatteren

Karen Andersen, CFA  Karen Andersen, CFA, is a senior stock analyst with Morningstar.

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