In a story Fool analyst David Williamson highlighted last night, no one had a worse day than Questcor Pharmaceuticals (NASDAQ:QCOR) investors, who saw shares of their stock drop some 48% yesterday. Whom do those shareholders have to thank for this precipitous fall? None other than health insurer Aetna (NYSE:AET). Aetna announced that, while Questcor's flagship drug Acthar is approved for 19 different indications, it would only reimburse one of them going forward.

While the nearly 50% drop could turn out to be a severe overreaction, investors are rightly concerned following the news -- despite a response from the company claiming that it "does not believe that the [Aetna] bulletin will have a material impact on the Company's results of operations." However, Questcor also disclosed that Aetna accounts for about 5% of all Acthar prescriptions. While "material" is a subjective term, 5% is pretty material in my book. However, Aetna shouldn't be the only concern here.

The real concern for shareholders is any fallout from Aetna's decision across other large insurance players such as UnitedHealth Group (NYSE:UNH) and WellPoint (NYSE:ANTM), who cover a membership base of about 36 million and 33.5 million, respectively. While Aetna's 18 million members might not be qualify as "material" in management's eyes, a similar announcement from one of those titans has to be considered a major risk at this point.

In order to understand the gravity of the situation, it's also important to understand how Acthar is being used. Unfortunately, the lone indication Aetna is maintaining coverage for doesn't appear to be a huge market for Questcor. That indication, infantile spams, is a very rare disorder and only accounted for around 40 paid prescriptions in August, according to company estimates. That's a drop in the bucket compared to the 510 paid prescriptions for MS and 120 for nephrotic syndrome. While future growth in the infantile spasms indication is likely, it can't touch the incredible contribution seen from MS, which more than tripled its number of quarterly paid prescriptions from the second quarter of 2010 to the second quarter of 2012. If the worst-case scenario plays out and more insurers jump ship, this would be good news for other MS players such Novartis' (NYSE:NVS) drug Gilenya.

Questcor is hosting a conference call at 11 a.m. EDT to discuss the "reimbursement process" of Acthar, so be sure to check back with the Fool for more analysis after the call.

Foolish Bottom Line
I agree with my colleague that it's best to watch this one from afar. While Questcor might be a stock to avoid following yesterday's news, there's certainly an argument to be made for taking a contrarian stance in some instances. It's been a successful approach for some of the world's best investors, which we highlight in our special free report entitled "The Stocks Only the Smartest Investors Are Buying." Inside, you'll learn more about how these masters of investing have made their fortune buying unloved companies, along with a stock pick Warren Buffett himself might be interested in if he were an individual investor. Claim your copy -- completely free of charge --by clicking here now.

Brenton Flynn owns no shares in the companies mentioned. Motley Fool newsletter services have recommended buying shares of UnitedHealth Group and WellPoint. Motley Fool newsletter services have recommended creating a diagonal call position in UnitedHealth Group. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.