Yesterday's passage of the healthcare reform bill by the US House of Representatives will benefit some Israeli companies in the business, says IBI Investment House analyst Natalie Gottlieb. The 219-212 vote ensures that the bill will be sent to President Barack Obama who will sign it into law.
IBI says that this major piece of legislation may also be Obama's greatest political victory to date.
The reform includes measures tightening regulation on insurance companies to expand healthcare coverage to more than 30 million Americans who currently have no health insurance. The bill mandates the purchase of health insurance by US citizens, for the first time in US history, or else pay a fine.
The savings and streamlining proposed in the bill go hand in hand with technological developments, which can shorten hospitalization and lower diagnostic costs.
IBI points to generic drug companies Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) and Perrigo Company (Nasdaq:PRGO; TASE:PRGO) as two companies that should benefit from the expansion of insurance coverage to more people, although falling prices for generic drugs will partly offset this growth.
IBI also cites Given Imaging Ltd. (Nasdaq: GIVN; TASE: GIVN) and Mazor Surgical Technologies Ltd. (TASE:MZOR) as two Israeli companies which could benefit. Given Imaging develops the PillCam endoscopic camera for the esophagus, small intestine, and colon. Mazor has developed minimally invasive devices for spinal surgical procedures.
IBI notes that many investors in pharmaceutical, health insurance, and hospital companies preferred to sit on the fence and wait for the reform to pass before making investment decisions, because there was considerable uncertainty about the scale of the reform and its effects on the healthcare industry. Now that the bill has been passed and will become law, investors may decide to invest in these shares.
Published by Globes [online], Israel business news - www.globes-online.com - on March 22, 2010
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