No one had a worse day than Questcor Pharmaceuticals (Nasdaq: QCOR), whose shares were eviscerated as major insurer Aetna (Nasdaq: AET) halted reimbursement of its lead drug Acthar from all indications except infant spasms. With the company worth barely more than half of what it was yesterday, did the market overreact?

Questcor claims that Aetna's reimbursement change affects only 5% of Achthar shipments and won't have a material impact on the business. Noted short-selling blog Citron Research says otherwise. It hypothesizes that Aetna is the first domino and that other large insurers, such as UnitedHealth Group (NYSE: UNH), WellPoint (NYSE: WLP), and Cigna (NYSE: CI) will soon follow suit. This isn't simply a renegotiation about the cost of the drug. Aetna claims Acthar is only "medically necessary" for spasms and has not proved to be as effective as, or more effective than, competing treatments in other indications.

Investors would be best served watching this one from afar. If Questcor can limit the damage to Aetna, all the better, but with all of the cost-control pressure the Affordable Care Act is putting on insurers, Citron makes a valid point. If the worst comes to pass, Questcor will be in a difficult position, as essentially all of its $218 million in 2011 sales are from Acthar.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.