NEW YORK, Jan. 13, 2011 /PRNewswire/ -- Although 2010 brought healthcare reform, investors are wondering if 2011 will bring healthcare reform repeal. Investors should likely expect some volatility in the sector, as the Republican-led House promises to wreak havoc on healthcare reform, either through a repeal effort or withholding funding for portions of the law, according to analysts at Standard & Poor's Equity Research.
"Healthcare reform or challenges to it should not be the only issue Health Care sector investors should focus on," said Jeffrey Loo, Health Care Group Head at S&P Equity Research. "Aside from our expectation of continued M&A activity within various sub-sectors including managed care, facilities, pharmaceuticals, and life sciences, there are other issues and trends we believe investors should keep a careful watch on in 2011."
These issues and associated projections by S&P's Health Care equity analysts for 2011 are as follows:
- We believe ongoing economic challenges across Europe will continue to adversely affect several sub-sectors, particularly the pharmaceutical, medical devices, and life sciences sub-sectors. Pharmaceutical companies will likely continued to be impacted by budget cuts, typically through mandated price reductions, regulations to limit utilization, therapeutic substitution, and greater use of inexpensive generics.
- Although we expect the legal battle to regulate gene patents to continue, we believe that such rulings have the potential to re-shape the diagnostic area more than in drug development, as the latter's manipulation of DNA remains patentable.
- After years of foreboding, the daunting specter of patent
expirations on a large number of blockbuster drugs is now upon the
pharmaceutical sub-sector, with the global pharmaceutical industry
facing a cumulative loss of $80 billion of sales from 2011 to 2014,
according to IMS Heal