Novartis (NVS)

[flatlander_60048]

I keep convincing my self that there should be a premium for being an innovator. Pharma, biotech had a long standing premium valuation which has evaporated. I agree with the PBM comment, as a society we need to value companies that bring cures to patients rather than the ones that squeeze margins. The PBM game is already hitting the point of diminishing returns. Walgreens pushing back against ESRX is just the start. Any company who's business model is to go out year after year and try to squeeze margins in the distribution channel is going to hit resistance at some point. Kudos to Walgreen for fighting back.

I'm watching NVS to see if the Lincoln Neb QA issue is an isolated case or the early signs of a change in corporate culture, such as was observed at JnJ McNeil.

If this period of multiple contraction continues, I believe that Pharma is closer to the end of the multiple contraction than many other market segments.

FL