Omnicare (OCR), PharMerica (PMC) Shares Sink as CMS Proposes New Rules; JPMorgan Defends Omnicare

Shares of Omnicare (NYSE: OCR) and PharMerica (NYSE: PMC) have tumbled 13 percent and 15 percent, respectively, following a Centers for Medicare & Medicaid Services proposal which would limit the number of drugs prescribed for the elderly.

JPMorgan's Lisa Gill issued a research note defending shares of Omnicare this afternoon, however the stock has not yet bounced. The analyst believes the sell-off in the stock is overdone as Omnicare's management has said profit will not be impacted "materially" by such a change. Gill notes Omnicare already offers unbundled pricing for its consulting and distribution functions.

Gentiva (Nasdaq: GTIV), LHC Group (Nasdaq: LHCG) and Amedisys (Nasdaq: AMED) shares are also following on similar proposals for home healthcare.

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