Damien Conover: When we look at the drug market right now, we see a lot of opportunity for investment. We see a lot of the large-cap biotechnology firms and a lot of the large-cap pharmaceutical stocks as undervalued. One of the key themes we're seeing that is causing this opportunity is concern about drug prices. Right now, there's a lot of concern about whether or not drugs will be able to continue to increase their prices or be able to launch at high drug prices. And when we've done the research on this topic, we found two things.
First off, it's very unlikely that a Republican-controlled Congress will force drug prices to come down. We think market prices will continue to drive the drug price equilibrium. And then the second point is, we think the current private pay market that's really controlled by the PBMs will continue to put pricing pressure on drugs, however, not to the same magnitude that we think is incorporated by the current drug prices.
We think certain areas have particularly strong drug pricing power, most notably cancer drugs, HIV drugs, MS drugs. These are areas where prices have held up very strongly in the past, and we think they will continue to hold up going forward. And the key to drug pricing power is innovation. The more innovative the drug is, the better, the stronger enabling pricing power that these firms will have.
And when we think about which firms are really well-positioned, we think about Roche as a dominant force in oncology. We also think about Pfizer that has a wide group of products in oncology as well as in several other areas that have strong pricing power such as vaccines. And then lastly, one other name we're highlighting is Celgene, a very strong position in oncology as well. So, across the spectrum a lot of areas where there is strong pricing power, that's where we would be recommending investors look at.