There's a pretty big decision being made in Washington D.C. right now that could affect many investors. No, it's not who will be the next resident of the White House -- the decision is being made down the street at the Supreme Court.
Wyeth
A Vermont jury decided that Wyeth needed to provide a stricter warning to medical providers to avoid the side effect, but Wyeth doesn't really have any control over the drug label; it's all up to the Food and Drug Administration.
The FDA is in full control of the label. The agency can force companies to add warnings to labels as it's done recently for the TNF inhibitors -- Amgen
You can see where this is going, right? If the Supreme Court doesn't overturn this decision, every known side effect would become grounds for suing drug companies at the state level and there wouldn't be a thing drug companies could do about it, since the FDA is ultimately in control of the warning label.
The good news for investors is that the Supreme Court appears to be on the side of the drug companies. In a case involving one of Medtronic's
Assuming the Supreme Court goes in a similar direction here, would this provide blanket immunity to drug companies as long as the warning is on the label? Depends on the wording of the ruling, but it doesn't sound like such a bad thing to me. Doctors and patients need to decide if a drug's advantages outweigh its known side effects -- Biogen Idec's
This case, probably more than who becomes president, will affect the drug companies' bottom lines over the next few years. Investors would be smart to pay attention when the verdict is handed down in the first half of next year.
More Foolish analysis on politics:
- Could the election ruin your investments?
- Amazon.com is cashing in on politics.