BUZZ-Healthcare, Biotech remains under siege

Tue Oct 6, 2015 12:04pm EDT
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** Biotechnology and broader healthcare stocks plunge further as industry drug pricing scrutiny intensifies

** Nasdaq Biotechnology index falls 6.6 pct, biggest 1-day drop since Aug 2011; Healthcare worst S&P sector down 3.75 pct with all stocks in the red

** WSJ article discusses drug industry's practice of raising prices to compensate for sluggish demand and rising competition.

** Across 30 top-selling drugs sold by pharmacies over past five years, US revenue growth averaged 61 pct, 3x the increase in prescriptions (WSJ analysis)

** Industry's pricing power twofold: 1) patent protection drug makers have on new products keeps competitors from offering copies for up to 20 years; 2) third party, either insurer or large employer, usually pays for prescriptions, which shields consumer from price increases - WSJ

** Vertex, Celgene, Bristol Myers, Biogen, Alexion down 5 pct to 8.5 pct

** Johnson & Johnson, Gilead, Merck , Amgen fall 2 pct to 3 pct

** Diagnostic co Illumina Inc biggest NBI loser down 14.5 pct after negative preannouncement

** Separately, Canada's Valeant Pharmaceuticals, subject of a New York Times article about its pricing strategies {ID:nL3N125390], files an 8K to correct claims made in recent reports and blogs.   Continued...