The Boston Globe - 13.09.2019

FRIDAY, SEPTEMBER 13, 2019 The Boston Globe Business B

25

THEBOSTONGLOBE

Indexof publicly traded companiesin Massachusetts

Stocks rose after the United States and China took steps to
ease tensions in their costly trade war. Tech, financial, and
consumer-focused stocks helped power the modest rally,
which extended gains from the day before, despite losing
some momentum in the final hour. The S&P 500 closed
within 0.6 percent of its record high, set July 26. The Unit-
ed States agreed to delay another round of tariffs to Oct. 15,
and Chinese importers asked US suppliers for prices for
soybeans, pork, and other farm goods — a sign they might
step up purchases of American agricultural products. Sev-
eral weeks of solid gains have helped the S&P 500 more
than recoup its August losses, nudging it closer to another
record high close this week. It’s also on track for its best
September since 2013. Small companies are the star per-
formers so far this month — they’re seen as more insulated
from the trade war. On Thursday, Intel gained 0.4 percent;
Advanced Micro Devices rose 1.5 percent. Microsoft added
1 percent. Consumer stocks also helped lift the market;
Starbucks rose 1.2 percent. Energy companies tumbled as
oil prices slid 1.2 percent. Schlumberger lost 1.1 percent.

Markets

Stocksriseonnewtradeoptimism

DOW JONES industrial average

NASDAQ Composite index

S&P 500 index

Globe 25 index

SOURCE:BloombergNews

By Jack Ewing

NEW YORK TIMES

FRANKFURT — The Euro-

pean Central Bank took unex-

pectedly aggressive steps on

Thursday to head off a down-

turn before it gained momen-

tum, but the bank signaled that

it was reaching the limits of

what it could do to stimulate

the eurozone economy.

The central bank cut a key

interest rate and revived a mon-

ey-printing program, but later

issued an unusually strong call

for eurozone governments to do

more of the economic heavy

lifting. Those countries that can

afford it should stimulate

growth by increasing public

spending, Mario Draghi, the

central bank president, said

during a news conference.

Asked whether the message

to political leaders was that

they can’t expect the central

bank to come to their rescue

forever, Draghi answered: “Def-

initely yes.”

Draghi’s call for government

action, which he said had the

unanimous support of the

bank’s 25-member Governing

Council, was also an expression

of unity with his soon-to-be-

successor, Christine Lagarde.

Lagarde, who will become the

ECB’s president in November,

issued a similar plea when she

spoke to members of the Euro-

pean Parliament last week.

For much of the last decade,

the ECB has prevented the eu-

rozone economy from collaps-

ing with an array of measures.

But economic growth has al-

most stalled, and there is a

growing consensus among ana-

lysts that wealthier countries

like Germany or the Nether-

lands need to pump money into

their economies, and by exten-

sion the rest of the eurozone,

with tax cuts or public works

projects.

The measures the ECB re-

vealed Thursday go beyond

what many analysts were ex-

pecting. Recent comments by

members of the Governing

Council had cast doubt on

whether the bank would restart

purchases of government and

corporate bonds. The bank will

buy 20 billion euros’ worth of

bonds ($22 billion) every

month starting in November, a

form of money printing intend-

ed to inject money into the sys-

tem and hold down interest

rates.

In a bid to increase lending,

the bank also pushed even low-

er the so-called negative inter-

est rate it imposes on commer-

cial banks that hoard cash. In

normal times, banks earn inter-

est when they deposit money in

central banks. But since 2014,

the ECB has imposed a negative

rate — essentially, a charge —

on such deposits to pressure

commercial banks to lend

more. On Thursday, the central

bank changed this deposit rate

to minus 0.5 percent from mi-

nus 0.4 percent. It was the first

cut in interest rates since 2016.

Further, the bank said it

would ease the terms of a pro-

gram that allows banks to bor-

row money on favorable terms,

provided they lend it to custom-

ers.

ECBtrimsrate,urges

morepublicspending

By Ed Silverman

STAT

After protracted haggling,

Vertex Pharmaceuticals struck

a five-year deal with the Scot-

tish government to

provideitscysticfibro-

sis treatments at a

“confidential discount,” a nota-

ble win for the drug maker as it

battles with several countries

over providing coverage.

The move comes one month

after the Scottish Medicines

Consortium had recommended

the National Health Service in

Scotland should not cover the

Orkambi and Symkevi medi-

cines, because Vertex failed to

present a “sufficiently robust”

clinical and economic analysis

to warrant the cost. The treat-

ments may be suitable for

about 400 of the 900 people in

Scotland who have cystic fibro-

sis.

“This is fantastic news for

those living in Scotland with

cysticfibrosisandtheirfami-

lies,” said Jeane Freeman, Scot-

land’s health secretary, in a

statement. She noted that Ver-

tex, which previously made its

medicines available to a few

dozen patients on a compas-

sionate use basis, also agreed to

collect outcomes data and sub-

mit the information to the Scot-

tish Medicines Consortium.

The agreement comes amid

growing pressure by patients

and their families in the United

Kingdom and elsewhere to gain

access to the medicines. How-

ever, several governments, in-

cluding France and Spain, have

balked at Vertex pricing, al-

though the drug maker has of-

ten played hardball, especially

in England, where a yearslong

stalemate has caused contro-

versy and embroiled members

of Parliament.

The logjam has roiled fami-

lies across the country and, on a

wider scale, has come to sym-

bolize the growing friction be-

tween drug makers and govern-

ments over the rising cost of

medicines.

The deadlock has grown

particularly bitter after the Na-

tional Health Service in Eng-

land last year called Vertex’s

pricing “unsupportable.” In

turn, Vertex called a govern-

ment offer “outrageous” and

“unconscionable,” and criti-

cized the cost-effectiveness

watchdog, the National Insti-

tute for Health and Care Excel-

lence, for using allegedly out-

dated methodologies to deter-

mine its pricing was

unjustified.

The vituperative remarks

prompted one member of Par-

liament to suggest the govern-

ment should sidestep Vertex

patents. And a parliamentary

committee then held a widely

publicized hearing six months

ago in which Vertex chief execu-

tive Jeffrey Leiden indicated he

would bring “new ideas” to the

negotiations. So far, though, the

impasse has continued.

This past June, meanwhile,

an advocacy group and several

familiesformedabuyer’sclub

to work with Gador, a drug

maker based in Argentina,

which will ship a generic ver-

sion of Orkambi to the United

Kingdom. Patients can expect

to pay roughly $25,000 a year,

or 80 percent less than the

roughly $132,000 that Vertex

reportedly wants to charge

England’s National Health Ser-

vice.

For this reason, the deal

with the Scottish government is

a significant development for

the company. The agreement is

not expected to generate a lot of

revenue, but “could serve to

mitigate concerns about Vertex

being an ‘outlier’ among drug

makers willing to negotiate, as

NHS and NICE have contend-

ed,” RBC Capital Markets ana-

lyst Brian Abrahams wrote in

an investor note. He added the

deal could “increase public and

political pressures on England”

to reach an agreement, given

the proximity.

This remains to be seen.

The deal in Scotland ap-

peared increasingly likely for a

couple of reasons, according to

Christina Walker, whose son

has cystic fibrosis and is a mem-

ber of a group of families called

UKneedsorkambi.

For one, Vertex had agreed

to make medicine available on a

compassionate use basis. Also,

Nicola Sturgeon, the Scottish

first minister, had promised in

Parliament that all patients

would get access and a political

deal was already being pursued

on the same day the Scottish

Medicines Consortium recom-

mended against coverage. In

England, however, Walker not-

ed the cost watchdog can’t be

overruled in this way.

Walker added that, under an

agreement between the United

Kingdom and the pharmaceuti-

cal industry, Scottish officials

will have to give details of the

deal to other home nations. “So

it’s crunch time now,” she ex-

plained. “NHS in England and

those in Wales and Northern

Ireland will be able to see how

much over and above what is

considered ‘cost effective’ that

Scotland has agreed to pay.

“If it’s not too much over,

maybe they’ll bend. If it is more

than is considered supportable

or acceptable, then there’s no

more excuse for delay on the

other options that the govern-

ment already committed to

look into to provide generic al-

ternatives.”

Ed Silverman can be reached at

[email protected].

Follow him on Twitter

@Pharmalot. Follow Stat on

Twitter: @statnews.

Vertex,Scotlandinmedicineaccord

STAT

SEAN GALLUP/GETTY IMAGES

European Central Bank chief Mario Draghi said countries

that can afford it should increase public spending.

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