Ever since the discussions on the Healthcare bill started, critics have always argued that it is anti capitalism and against industry. However if the immediate reaction of the stock market is anything to go by, it does not seem that investors in pharmaceutical or insurance companies, or for that matter any other sector of the market, are too worried about the bill.
Stocks of most of the pharmaceutical companies edged higher in trading. This included large names from the industry like Pfizer and Merck. Although stocks of some insurance companies like WellPoint went a little lower, there was no serious movement to indicate that investors were concerned about the future of the industry. The small changes in the stock prices also showed that people in the opposite camp, who believed that the bill was going to be a major bonanza for the insurance companies, were also proven wrong.
The opinion of most of the analysts on the stock market is that the bill would be good for both the industry and the consumers. As more and more people are brought under coverage, insurance companies would gain from higher revenues. It is good news for pharmaceutical companies too, as a larger number of patients would now be able to afford expensive drugs. It would mean higher revenue for these companies, which is already being reflected in the higher stock prices.
The reaction of the stock market should be an eye opener for many people who were opposing the bill for all kinds of reasons. One of the major concern that critics had was that the bill would be unaffordable for the government and that it would mean a much higher deficit. If the market believed this to be true then there would have been some reaction because the last thing that investors want is a government which is on the brink of bankruptcy. It seems these claims were also more or less hollow.
Although the ideological debate would go on for a long time, it is clear that there was no concrete reason to oppose the bill on financial or economic grounds. However, it would be interesting to see the impact on individual companies as the proposals of the bill are rolled out. There is a chance that some companies could suffer while others could benefit but these things will become clear only when there is some real action on the ground.