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The President’s “executive orders” are likely to be … – not implemented! – Commerzbank column

The US President has announced four so-called “Executive Orders” (EO, German “Implementing Ordinance”), which aim to lower the prices of pharmaceuticals in particular. For example, states, wholesalers, and pharmacies should be allowed to import pharmaceuticals from abroad. In addition, insulin (a unit costs around several times the price compared to Germany!) And the corresponding injection systems should be cheaper. However, many details, such as the schedule for implementation or the specific implementation process, are still unclear. Executive orders are also not a law. The implementation process can be accelerated, but this increases the likelihood of a legal challenge. It is u. E. quite unlikely that the four EOs can be implemented. The announcement has u. E. Purely symbolic with regard to the presidential election, we do not expect any effects on the margins of the pharmaceutical industry – due to the lack of implementation of the EOs.

We are currently worried, among other things, that profits in the industry have recently fallen overall, but we believe that many of these companies’ share prices do not reflect this accordingly. There are undoubtedly some corporations in the sector that are currently enjoying increased demand for their products and services. However, this does not apply to the majority, as the current reporting season for the second quarter shows. The mostly positive outlook should also be critically examined. For example, some U.S. governors have announced plans to cut government health budgets. This is likely to leave much more likely traces in the operational business of the groups. In relative terms, however, the industry is still doing better than many others!

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