As Barack Obama closed in on the Presidency last year, investors got increasingly skittish about drug stocks.rnJohnson & Johnson fell 18% in the two months before the election, Schering-Plough dropped 23%, and Eli Lilly tumbled 28%. Investors had good reason to be worried. Obama's health-care reform plan is likely to include letting Medicare negotiate lower drug prices, overturning a ban on government-driven discounts that was in the original 2003 "Part D" program.rnBut Medicare pricing is only part of the story for drugmakers, several health-care fund managers argue. Investors may be overlooking substantial benefits to pharmaceutical companies because Obama is also likely to get the Food & Drug Administration moving again, says Sam Isaly, co-manager of Eaton Vance Worldwide Health Sciences Fund. "In the end, pricing may or may not come out negative, but change at the FDA will be very positive," he says.
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