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:

  1. 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.
  2. 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.  
  3. 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