Berenberg says pharma ’emerging from the pill penalty box’

Berenberg says the pharma industry is “emerging from the pill penalty box” after the Trump administration removed the “pill penalty” within the Medicare prescription drug negotiation policy. Amid many threats hanging over the sector since the Trump administration took office, this is a “recent bright spot,” the analyst tells investors in a research note. Berenberg believes the companies which could benefit most from a delay to price negotiation on pills are AbbVie (ABBV), AstraZeneca (AZN) and Eli Lilly (LLY). The firm says the majority of large pharma companies are trading at the bottom of their 10-year valuation multiple range. It expects a tariff valuation discount to remain in place until the conclusion of the “Section 232” investigation into the effects on U.S. national security of imports of pharmaceuticals around mid-year, however. Berenberg says the upside is “most compelling” at AstraZeneca and Sanofi (SNY).