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The Health Care Reform Bill, What Now?

|Includes:Abbott Laboratories (ABT), PFE

In what was hardly a terribly unexpected surprise, President Obama's "biggest wish" was, more or less, granted. I say "more or less", because in typical Congressional fashion, there was all sorts of horse trading, and arm twisting that needed to take place, in order for the legislation to move forward.

Of course, things now move to the Senate, where things seem to move even more slowly, so it'll be interesting to see what items get added, changed, or transmuted during the bill's time in that august body.

For the moment, it seems that big pharma is a "winner", under the legislation, given they've been given "safe harbor" from generic competition for 12 years (primarily in the area of bioengineered drugs). At least, that's what today's market action seemed to indicate, with the Dow moving up nicely, mainly on the back of firms such as Abbott and Pfizer.

Insurers and managed care firms seemed to do well, too...probably because they will get new customers, although in the case of the insurance firms, at least, margins might suffer some compression, as rates are capped/cut.

Of course, the jury's still out on what might lay ahead for smaller firms, in terms of what benefits/costs they may incurr. Until the completely modified/amended bill gets passed, look for small firms to avoid new hires, until its crystal clear what the costs associated with such hires might be.



Disclosure: Long: JNJ

Stocks: ABT, PFE