For Immediate Release
Chicago, IL – December 18, 2009 – Zacks.com announces the latest Industry Outlook. Today, Zacks Equity Research discusses the Healthcare Industry, including UnitedHealth Group Inc. (UNH), Cigna Corp. (CI), Pfizer Inc. (PFE), GlaxoSmithKline Plc (GSK) and Merck & Co Inc. (MRK).
A synopsis of today’s Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/28445/Healthcare+Stock+Review+-+Dec.+2009.
Healthcare Stock Review – Dec. 2009
The healthcare sector comprises different industries, ranging from managed care organizations, healthcare facilities providers and medical devices manufacturers to biotech and pharmaceutical companies. Consequently, we believe that investors in this sector should be mindful of the different drivers and appropriate metrics associated with the various sub-sectors.
In the present scenario, investor sentiment in healthcare continues to be driven by decisions in Congress related to government funding and the state of the broader economy. In view of the ongoing healthcare reform debate in Congress, healthcare policy changes remain an important indicator to investing in the sector.
Even though legislation — which aims to cover nearly all Americans by providing government subsidies to help pay premiums irrespective of health or income — was passed in the House of Representatives, it is facing opposition in the Senate mainly due to the government’s intention to compete with private insurers.
Under the legislation, practices such as denying coverage on the basis of pre-existing medical conditions would be discontinued and insurers would no longer be able to charge higher premiums on the basis of gender or medical history. Furthermore, the industry would no longer enjoy an exemption from federal antitrust restrictions on price gouging, bid rigging and market allocation. Health insurers such as UnitedHealth Group Inc. (UNH) and Cigna Corp. (CI) could face increased competition, more scrutiny and fewer protections under the bill.
The House version of the bill would not be profitable to drugmakers like Pfizer Inc. (PFE), GlaxoSmithKline Plc (GSK) and Merck & Co Inc. (MRK). They would be required to pay rebates to the government for drugs used by the elderly and disabled Medicare patients who also are on Medicaid.
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