Lyon released a report indicating that President Trump's comments regarding pharmaceutical pricing have reignited market volatility. The firm believes that the multi-payer structure of the USA's medical system limits the government pricing power, and any meaningful reforms will affect a wide range of stakeholders, making actual implementation highly uncertain.
Although concerns are growing over peak sales of overseas products, the USA remains an incremental market for Chinese companies. The policy environment in China is becoming more supportive, particularly with a more relaxed approach to pharmaceutical pricing. The firm believes that the recovery of hospital pharmaceutical sales will be the main driver of the next domestic cycle, and data from April has already shown positive signs of improvement.
The firm has increased its allocation to leading pharmaceutical companies in its investment portfolio, including CSPC Pharmaceutical Group (01093.HK), Hansoh Pharmaceutical (03692.HK), and Jiangsu Hengrui Medicine (600276.SH). Additionally, due to the easing of the China-USA trade conflict, the firm has increased its allocation to WUXI APPTEC (02359.HK).
