Barclays on Pharmaceutical Stocks: Impact as SCOTUS Upholds Entire Affordable Care Act
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Barclays on Pharmaceutical Stocks: Impact as SCOTUS Upholds Entire Affordable Care Act
Aanlyst, C. Anthony Butler, sees a minimal long-term impact on pharma stocks. Butler said, "This ruling came as a surprise to some investors, who in recent days have been expecting the overturning of the individual mandate if not the entire act...decision has minimal effect on the fundamentals of the U.S. pharmaceutical companies, and there is unlikely to be any long term effect on the valuations of the sector."
Butler's other highlighted points include: 1) Ongoing reform measures affecting ~7% in pharma annual EPS; pressures stay status quo with the ruling; 2) Starting in 2013, those companies with medical device exposure (i.e. Johnson&Johnson (NYSE: JNJ), Abbott (NYSE: ABT)) will need to pay a 2.3% deductible tax on U.S. medical device sales; 3) We expect increased health care coverage in the pool of uninsured Americans (~35M) starting in 2014; and 4) There remains some ambiguity over the pace and magnitude of the implementation of PPACA on the states level.
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Aanlyst, C. Anthony Butler, sees a minimal long-term impact on pharma stocks. Butler said, "This ruling came as a surprise to some investors, who in recent days have been expecting the overturning of the individual mandate if not the entire act...decision has minimal effect on the fundamentals of the U.S. pharmaceutical companies, and there is unlikely to be any long term effect on the valuations of the sector."
Butler's other highlighted points include: 1) Ongoing reform measures affecting ~7% in pharma annual EPS; pressures stay status quo with the ruling; 2) Starting in 2013, those companies with medical device exposure (i.e. Johnson&Johnson (NYSE: JNJ), Abbott (NYSE: ABT)) will need to pay a 2.3% deductible tax on U.S. medical device sales; 3) We expect increased health care coverage in the pool of uninsured Americans (~35M) starting in 2014; and 4) There remains some ambiguity over the pace and magnitude of the implementation of PPACA on the states level.
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