** A tougher pricing environment in the US along with racyvaluations is causing fund managers to call time on a rally inEuropean healthcare, the star sector performer this yr.Chart: http://link.reuters.com/cyx63w
** Sector been boosted by M&A hopes - which have beensomewhat dashed, particularly in UK; Pfizer did not landAstraZeneca & AbbVie's planned acquisition ofShire came apart
** Increasing trend by US health insurers to use hardballtactics to get drugmakers to cut prices for older products
** Old Mutual Global Investors' Kevin Lilley sold completelyout of GlaxoSmithKline about 1 wk ago amid fearsdividend not sustainable; co's respiratory business been hit bythis trend by US insurers
** French drugmaker Sanofi has reported similarpressures from US insurers in diabetes mkt
** OMGI's Lilley still 'overweight' pharma but less so;scaled back positions in Novartis, Bayer, &Roche by about 2/3 pct since mid-Nov
** Coutts recently downgraded healthcare to "neutral" on thegrounds that it was expensive. Chart: http://link.reuters.com/wux63w (RM: tricia.wright1.thomsonreuters.com@reuters.net)