GW Pharma continues upward momentum

GW Pharma (GWP) is currently up nearly 6% without any evidence that big buys are coming through for the company.  Momentum is certainly positive with the regulatory announcement last week on the progress of the European Sativex application. A  move over 130p seems feasible during the week and closer to 150p on final approval in May. Of course, an institutional buy of any size would accelerate matters as trading seems to be focused on private investors for now. Perhaps those boys in the City just fall asleep when it comes to decentralised applications, mutual recognitions and the like?!

U.S. Healthcare bill passes House of Representatives

On Sunday evening President Obama scored a major personal victory, with the House of Representatives approving the Senate bill overhauling the U.S. health-care system with the aim of extending insurance coverage to about 32 million Americans. The margin of victory was narrow, with the vote in favour 219 to 212 to approve the bill. All Republicans and 34 Democrats opposing. It bans insurance company practices like denying care for pre-existing conditions, imposing lifetime caps on coverage, while providing subsidies to buy private insurance in newly-created marketplaces called “exchanges”.

This means its potentially bad news for the big pharmaceutical companies given pricing concerns for the new "exchange" insurance schemes which may create downward pressure on reimbursement prices for branded drug. On the flip side, the extra population covered by the scheme will drive additional volumes of prescriptions. Astra Zeneca (AZN)  generates half its earnings in the U.S., whilst GSK, Novartis and Roche generate over a 1/3 of their earnings in the American market.