It is a low news day because everyone is still rubbing their eyes after the Third Debate. But we have two company reports all the same.

*Roche reported sales up 4% in constant exchange rates and 6% in Swissies today thanks to its immunology and cancer drug gains. It successfully launches cobas e801, a rapid immuno-diagnosis module. Dow Jones rated RHHBY the most sustainable healthcare company for the 8^th year in a row.

CEO Severin Schwan reconfirmed its outlook for 2017 and lauded its continuing success with Tecentriq against cancers, now given FDA approval for treating metastatic non-small cell lung cancers as well as advanced bladder cancer. It joins existing medicines Herceptin and Perjeta against HER2+ breast st cancer, and immunology treatments Actemra, Acivaste, Xolair, and Esbriet.

However the expected drop in sales of Tamiflu and eye meds kept sales growth back. Pharma sales hit CHF 29.14 bn in the first 9 months.

Diagnostics are the RHHBY special sauce and there sales grew 7% to hit CHF8.365 bn, up 7% from a smaller base with a lot of growth in Asia. Schwan cited “challenging market conditions” in diabetes care in the US. More on this and drugs below.

*JP Morgan analysts have downrated Banco Latino-Americano de Comercio of Panama to hold from overweight. It fell over 8% in reaction to this and its meh results reported yesterday afternoon. While Q3 income was off only $1 mn at $43.4 mn loan loss provisions soared to $11.5 mn from only $2 mn in the last Q3. Despite cost controls net profits came in at $22.3 mn, off by over a third, at 57 cents/sh vs 96 cents. The eps missed analyst forecasts by 13 cents.

Moreover, return on equity, a key banking metric, was also down by over a third and return on average assets fell to 1.2% from prior year's 1.85%. For whatever it is worth, profits did rise 26% sequentially and credit quality remained more or less stable. Part of the problem is syndication profits which can be lumpy and CEO Rubens V. Amaral said several transactions will close in the current quarter. BLX is using floating rate business to cut interest rate and currency risk (Panama operates in US$) using short term funding and deposits to finance its loans. BLX yields 5.3% which is why I am buying more for my yield portfolio as the board maintained the dividend before reporting results.

More Latinas

*Vale is up again after reporting higher iron ore output, beating forecasts. Output rose 6.1% sequentially and 1.5% y/y excluding shut-in jv Samarco. It was raised to outperform from neutral by analysts at Itau BBA in Brazil. VALE cut its forecasts for iron ore production next year by 5% however. It was charged by Brazilian Federal prosecutors today over the tailings disaster last Nov. at the jv it ran with BHP-Billiton, along with a consulting firm, a newcomer in the case.

*The Mexican peso rose another half percent overnight to 18.55 to the greenback, a commentary on last night's debate.

*Brazil's Cosan (CZZ) hit another 12-mo high in trading today. What else is new?

Drug Stocks

Challenged to support my argument that the Obamacare subsidies distort charges so much that the program needs to move to a single payer system, which I wrote yesterday, is not hard. I can quote Bloomberg-Business Week's Oct. 10 issue about Novolog rebates. Novolog is a diabetes insulin as part flexpen from Novo Nordisk used to treat juvenile diabetes, which is used in conjunction with a longer operating insulin. But the cost problem is general. People in high-deductible insurance plans have to pay the list price for Novolog. Rebates are then paid by NVO to the insurance companies or corporate drug benefit managers by but they do not count against the deductible the patient or his family have to pay before they are reimbursed. Parents of affected children have to pay up at full price to reach the deductible minimum before rebates they get to use their drug benefits. Meanwhile they are not getting the rebates NVO offers. In 2015 rebates and discounts paid to drug benefit managers and insurance companies topped $100 bn. But they were not paying for the drugs; the patients were and paid the full list price.

Insured families are having to meet ever higher deductibles. The amount rose from 17% of coverage to 25% last year. It more than quadrupled in the last decade, according to Kaiser Federation which tracks healthcare costs.

Asked why those who incur the out of pocket costs don't get the rebate, insurers say it comes in later and is hard to track. According to US PR Ken Inchaust of NVO, talking to Bloomberg, insurers may use the money they get from rebates to cut charges for other customers—but they are not now credited to those who paid for the drugs in the first place.

In the Internet era, I think it is not beyond the capacity of the insurance industry and corporate customers to link rebates to the payments people had to make to meet deductible minimums. It may also be necessary to remove the deductible requirement entirely for people who are dealing with chronic diseases like diabetes.

Insurers and company plans do not share the rebates with patients or those who paid for the pricey drugs because the Obamacare law doesn't require that they do so. I think they should be required to. Or just exempt chronic diseases from a deductible.

I expect Pres. Clinton will work on this improvement of Obamacare.

*Teva's chief scientist won a major victory after the US FDA accepted the re-submission of its SD-809 for treating chorea associated with Huntington's Disease, the genetic disease which killed Woody Guthrie. The ruling on allowing prescriptions of the drug will be made by April 4 under an Orphan Durg designation and two phase III trials. The re-submission follows a request for more information (Complete Response Letter) issued by the FDA in May.

TEVA's Michael Hayden, a South African-born Canadian, worked on Huntington's early in his career before being hired by the Israeli firm.

*Australia's Benitec (BNIKF) presented 3 posters in Florence this week at the Congress of the European Socieite of Cell and Gene Therapy in Florence, Italy. One on its BB-BH-331 DNA directed RNA interference pre-human suppression of hepatitis B virus; one on ddRNA therapy for treating choroidal neovascularization in macular dystrophy eye disease with UK 4D Molecular Theraputics; and one on how TRNA interference mediated knockdown of TCR (T-cell receptors) stops surface expression on T-cells and abrogates Interleukin-2 secretion.

*GlaxoSmithKline (GSK) won a buy rating from Investec today with a GBX 1925 target price. Of course I have no idea what the $ exchange rate will be.

*A reader asked what I think of Compugen. I expect that at some point it will come up with another deal with a drug major as it did with Bayer and again rocket up. It reports Nov. 7 but I do not hold my breath expecting profits form a drug startup like CGEN. InvestorPlace bloggers love it, which may not matter much.

Other Sectors

*The problems of CAT have not hurt Kubota, our recent Japan buy. KUBTY is now aiming at $80.

*Standard Life fell 6.3% yesterday in London trading after the downgrading. I chose not to sell SLFPF.

*Ready meals firm Greencore of Ireland rose 6.2% yesterday in London trading. GNCGF didn't move; it doesn't.

*Mysteriously,CAE is falling nearly 1% despite announcing a spate of new deals for civil and military aviation training.

*Paul Tustain, founder and board member of www.bullionvault.com has resigned to devote himself to peddling whisky on-line (but not to US persons). The legal and taxable way to buy gold remains an advertiser at www.global-investing.com and is sponsored by the World Gold Council, a miners' body, as is SPDR Gold, GLD, which after rising for 3 days in a row is down marginally today.