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Trump pledge sends Swedish pharma stocks down

Swedish pharmaceutical firms saw their stock prices drop on Thursday morning after US President-Elect Donald Trump used part of his chaotic press conference the day before to say that the US should negotiate better prices from drug companies.

Trump pledge sends Swedish pharma stocks down
Donald Trump at a press conference on Wednesday. Photo: AP Photo/Evan Vucci

The stock of Swedish-British pharmaceutical giant AstraZeneca was trading 1.5 percent lower when the Stockholm Stock Exchange opened for business. By 11am it was down 1.76 on the day before.

Formed in a merger of Swedish Astra AB and the British Zeneca Group in 1999, AstraZeneca is one of the world's largest pharmaceutical companies.

Share prices for Solna-based biotechnology firm Swedish Orphan Biovitrum, which develops specialist drugs to patients with rare or life-threatening diseases, dropped by -2.62 percent.

Medical technology company Getinge, which provides equipment for healthcare and life sciences, meanwhile rose 4.2 percent. Overall, the Stockholm Nasdaq Stock Exchange fell to -0.4 percent in early morning trading, but climbed to -0.19 percent by 11am.

Trump said at his press conference in New York that he would make the pharmaceutical industry bid for government contracts.

“There's very little bidding on drugs. We're the largest buyer of drugs in the world. And yet we don't bid properly. We're going to start bidding,” Trump said.

US law currently does not allow federal insurance programme Medicare to negotiate drug prices, essentially allowing the pharmaceutical industry to set their own drug prices.

“They're getting away with murder,” Trump said about the industry. “Pharma has a lot of lobbyists and a lot of power and there is very little bidding.”

The trend was replicated on stock markets across Europe on Thursday morning, with pharma firms also underperforming in DenmarkSpainGermanyFranceSwitzerland and Italy

Bloomberg Markets reported that the Nasdaq Biotechnology Index and the Standard & Poor’s 500 Pharmaceuticals, Biotechnology & Life Sciences Index both had their biggest single-day drops in three months, falling 3 and 1.7 percent respectively. 

 

 

For members

EUROPEAN UNION

Pensions in the EU: What you need to know if you’re moving country

Have you ever wondered what to do with your private pension plan when moving to another European country?

Pensions in the EU: What you need to know if you're moving country

This question will probably have caused some headaches. Fortunately a new private pension product meant to make things easier should soon become available under a new EU regulation that came into effect this week. 

The new pan-European personal pension product (PEPP) will allow savers to take their private pension with them if they move within the European Union.

EU rules so far allowed the aggregation of state pensions and the possibility to carry across borders occupational pensions, which are paid by employers. But the market of private pensions remained fragmented.

The new product is expected to benefit especially young people, who tend to move more frequently across borders, and the self-employed, who might not be covered by other pension schemes. 

According to a survey conducted in 16 countries by Insurance Europe, the organisation representing insurers in Brussels, 38 percent of Europeans do not save for retirement, with a proportion as high as 60 percent in Finland, 57 percent in Spain, 56 percent in France and 55 percent in Italy. 

The groups least likely to have a pension plan are women (42% versus 34% of men), unemployed people (67%), self-employed and part-time workers in the private sector (38%), divorced and singles (44% and 43% respectively), and 18-35 year olds (40%).

“As a complement to public pensions, PEPP caters for the needs of today’s younger generation and allows people to better plan and make provisions for the future,” EU Commissioner for Financial Services Mairead McGuinness said on March 22nd, when new EU rules came into effect. 

The scheme will also allow savers to sign up to a personal pension plan offered by a provider based in another EU country.

Who can sign up?

Under the EU regulation, anyone can sign up to a pan-European personal pension, regardless of their nationality or employment status. 

The scheme is open to people who are employed part-time or full-time, self-employed, in any form of “modern employment”, unemployed or in education. 

The condition is that they are resident in a country of the European Union, Norway, Iceland or Liechtenstein (the European Economic Area). The PEPP will not be available outside these countries, for instance in Switzerland. 

How does it work?

PEPP providers can offer a maximum of six investment options, including a basic one that is low-risk and safeguards the amount invested. The basic PEPP is the default option. Its fees are capped at 1 percent of the accumulated capital per year.

People who move to another EU country can continue to contribute to the same PEPP. Whenever a consumer changes the country of residence, the provider will open a new sub-account for that country. If the provider cannot offer such option, savers have the right to switch provider free of charge.  

As pension products are taxed differently in each state, the applicable taxation will be that of the country of residence and possible tax incentives will only apply to the relevant sub-account. 

Savers who move residence outside the EU cannot continue saving on their PEPP, but they can resume contributions if they return. They would also need to ask advice about the consequences of the move on the way their savings are taxed. 

Pensions can then be paid out in a different location from where the product was purchased. 

Where to start?

Pan-European personal pension products can be offered by authorised banks, insurance companies, pension funds and wealth management firms. 

They are regulated products that can be sold to consumers only after being approved by supervisory authorities. 

As the legislation came into effect this week, only now eligible providers can submit the application for the authorisation of their products. National authorities have then three months to make a decision. So it will still take some time before PEPPs become available on the market. 

When this will happen, the products and their features will be listed in the public register of the European Insurance and Occupational Pensions Authority (EIOPA). 

For more information:

https://www.eiopa.europa.eu/browse/regulation-and-policy/pan-european-personal-pension-product-pepp/consumer-oriented-faqs-pan_en 

https://www.eiopa.europa.eu/browse/regulation-and-policy/pan-european-personal-pension-product-pepp_en 

This article is published in cooperation with Europe Street News, a news outlet about citizens’ rights in the EU and the UK. 

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