Zacks Industry Outlook Highlights: The Medicines Company, Optimer Pharma and Cubist Pharma

CHICAGO, Dec. 7, 2012 /PRNewswire/ -- Today, Zacks Equity Research discusses the U.S. Pharma & Biotech, including The Medicines Company (Nasdaq: MDCO), Optimer Pharma (Nasdaq: OPTR) and Cubist Pharma (Nasdaq: CBST).

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A synopsis of today's Industry Outlook is presented below. The full article can be read at  

http://www.zacks.com/commentary/24869/pharma--biotech-stock-outlook-dec-2012

A major event that will have a significant impact on pharma and biotech stocks is the upholding of the Patient Protection and Affordable Care Act (ACA) by the Supreme Court in late June 2012. The Act, popularly referred to as "Obamacare," passed through Congress in 2010, represents major changes in the nation's healthcare sector.

The Act will provide coverage to 32 million uninsured Americans, make healthcare facilities more affordable, expand coverage for customers with pre-existing health conditions and keep a check on health insurers. The healthcare reform aims to end the discrimination policy of insurance companies, create competition amongst insurers through the establishment of health insurance exchanges, add value to the overall healthcare system and reduce premiums.

The upholding of the Act is a big win for pharma companies as the coverage base will increase.

Meanwhile, the signing of the Gaining Antiobiotic Incentives Now (GAIN) Act should benefit companies pursuing the development of novel antibiotics. Once approved, these products will enjoy an additional five years of marketing exclusivity. Companies that should benefit from this Act include

The Medicines Company

(Nasdaq:

MDCO

),

Optimer Pharma

(Nasdaq:

OPTR

) and

Cubist Pharma

(Nasdaq:

CBST

) among others.

The US government is also exploring options which will help increase the availability of generics. The Obama administration announced that it is looking to implement a proposal under which the exclusivity period for biologics will be cut down by 5 years, thereby allowing generics to enter the market sooner.

The government is also seeking to increase the availability of generics by preventing companies from entering into anti-competitive or "pay for delay" agreements which push out the availability of generics. These initiatives, if implemented, would result in additional pricing competition and genericization in the pharma industry. Moreover, the establishment of a biosimilar pathway will lead to the availability of cheaper versions of biologics.

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