Big Pharma’s Laughing All the Way to the Bank
It’s an issue that affects millions of Americans.
It’s an issue that affects those that need help the most.
And now Congress has had enough.
In a rare bipartisan effort yesterday, seven high-profile executives of the biotech community were ordered to stand in front of a congressional committee and explain why prescription drug prices are so ridiculously high.
“‘It’s Finally Pharma’s Turn’: Drug CEOs Face Capitol Hill Reckoning,” Politico reported ahead of the meeting.
The seven companies represented on Capitol Hill yesterday included:
- Merck (NYSE: MRK)
- AstraZeneca (NYSE: AZN)
- Pfizer (NYSE: PFE)
- Johnson & Johnson (NYSE: JNJ)
- AbbVie (NYSE: ABBV)
- Sanofi (NASDAQ: SNY)
- Bristol-Myers Squibb (NYSE: BMY).
At the conclusion of the meeting Big Pharma looked very much “the bad guy.”
Congress told Big Pharma current drug prices are unacceptable. Big Pharma conceded that point without much of a fight. They even admitted high drug prices hurt the poorest families worst.
But when Congress asked what Big Pharma would do about it they essentially said they’ll do nothing, noting constraints created by previous legislation leave them handcuffed.
Big Pharma did say they would support new legislation to help control drug pricing, but the message is clear.
Big Pharma is in it for the money and they won’t be dissuaded without new health care legislation.
Wall Street’s Reaction?
Pre-market, reaction to the news is mixed, if not downright muted.
A few of the companies represented on Capitol Hill yesterday were in the green pre-market. A few were also in the red, but not by more than 1%.
This is quite surprising considering the results of yesterday’s meeting. Make no mistake, this is a big deal for Big Pharma.
But even as Congress grilled Big Pharma yesterday the Nasdaq Biotech Index (NBI) barely took a dip.
And pre-market this morning NBI still was sitting squarely above its 50-day (blue line) and 200-day (red line) moving averages despite the circus in Washington:
Of course, we’ve seen this movie before.
Congress talks tough when it comes to drug pricing and other hot-button issues. But when it comes time to act, nothing gets done…
A few weeks ago I noted that we needed to wait and see if the biotech bull had more life. Specifically, we needed to see if NBI could smash through resistance and finally break above its 200-day MA (blue line).
Last week NBI finally broke through, which bodes well for the biotech bull.
The remainder of this week’s action could solidify the bullish trend. If NBI holds strong at or above its 200-day MA through Friday despite Congress’ grilling…
Watch the biotech melt-up begin!
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Chief Technology Expert, Technology Profits Daily