Dec. 18 at 12:36 AM
PickAlpha Mid-Day:
Pharma “price deals” are a valuation reset, not a headline
$NVS $RHHBY $XLV
White House is expected to announce drug-pricing deals with Novartis and Roche as soon as Friday, with others potentially included. The pitch is familiar: lower prices in select channels/programs in exchange for tariff/regulatory relief and de-escalation with Switzerland.
Our view is this is a multiple compression event for large-cap pharma — less about one quarter’s revenue, more about the market re-pricing US “pricing power” as a policy variable. Winners are the names that can trade a contained concession (narrow scope, limited products, time-bounded) for certainty; losers are companies with US-heavy mix + high list-price exposure where “voluntary” quickly becomes a template. If this expands beyond a couple of deals, expect defensive rotation inside healthcare: higher-quality, diversified pipelines hold up; single-asset/high-US-exposure gets hit first.
