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How the Obamacare Verdict Will Affect the Life Sciences Sector

Sean Williams
June 27, 2012

We're down to just a matter of hours before the Supreme Court will rule on the validity of the Patient Protection and Affordable Care Act, aka Obamacare. Signed into law in 2010, the bill holds huge ramifications for much of the health-care sector. Today, I want to focus specifically on the implications the verdict will have on the life sciences sector.

The biggest factor that's set to influence the life sciences sector is the individual mandate. Requiring all citizens to either purchase insurance or be enrolled in government-sponsored Medicaid health plans, the individual mandate bears watching not only as the most controversial aspect of the ACA, but also with regard to its impact on the life sciences sector.

If the entire bill (including the individual mandate) passes, I've already purported that it will have a negative effect on device makers, but it could be a positive for many other aspects of the life sciences sector.

I see one specific benefactor being immunology and rare disease companies. Pharmaceutical juggernaut Johnson & Johnson (NYSE: JNJ  ) may find that the individual mandate will get lower-to-middle-income people who had previously been uncovered by Medicaid into their doctors' offices for standard vaccines -- ultimately boosting its bottom line.

Rare disease-focused biotechnology companies -- such as Alexion Pharmaceuticals (Nasdaq: ALXN  ) , whose sole drug, Soliris, which treats a form of anemia, and Isis Pharmaceuticals' (Nasdaq: ISIS  ) , whose lead drug candidate, Kynamro, treat homozygous familial hypocholesterolemia -- could see an immediate boost, since expand