Israel ETF: An Unlikely Winner in U.S. Healthcare Reform
ETF Database submits:
With the passage of the sweeping health care reform late Sunday night, many investors are scrambling to determine which sectors are likely to benefit from the new legislation. Although the timing and impact of changes remains to be seen, generic pharmaceutical firms will likely emerge as one of the big winners. Many big name drugs are going off patent very soon and will be open to the generic market. Popular drugs Cozzar and Flomax will lose their patents this year, and Lipitor, the best selling drug in the country, will lose its patent in 2011. Plavix will follow soon after. While this is a negative development for Big Pharma, it should be good news for consumers and generic manufacturers, which will be able to quickly gain market share. 
More importantly, more than 30 million previously-uninsured Americans will now have coverage (and will probably be encouraged to buy generics whenever possible in order to keep costs down). The Motley Fool also makes an interesting point on the subject, noting that “unlike lifesaving medicines, which may be one-time charges, it’s easy for uninsured patients to justify skipping a prescription when the benefits are years away and the drugs have to be taken daily.” Now that the drugs will be covered by insurance, those in need will be less likely to forgo them, further boosting generic producers’ profits. Both of these developments should be good news for generic drug manufacturers who could experience a boom in sales if the overhaul proceeds as planned.
Investing, Long Term Investment, stock market | admin March 25, 2010
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