Sector Snap: Medical device companies mostly down
NEW YORK (AP) — Shares of medical device companies were mostly lower Thursday after the Supreme Court upheld the 2010 health care overhaul law.
In a highly anticipated decision, the court ruled the health care law is Constitutional by a 5-4 majority. The vote upheld almost the entire the law, including a provision that requires most people to have health insurance or will have to pay a fine.
FBR Capital Markets analyst Benjamin Salisbury said the ruling was a surprise because many people expected the insurance mandate to be overturned. He said the ruling "is likely to be viewed most negatively for medical device manufacturers" because the law includes an excise tax on medical devices that goes into effect in January.
President Obama signed the Patient Protection and Affordable Care Act in to law in March 2010 after a year of intense national debate. The law allows children to remain on their parents' insurance until the child turns 26, bars health insurers from dropping plan members who became ill, prohibits insurers from excluding children under 19 who had pre-existing health problems, requires insurer to spend certain percentages of their premium dollars on medical care, and authorizes the Food and Drug Administration to approve generic versions of biotech drugs
Parts of the law are still being phased in. By 2014, health insurers will not be allowed to exclude people to people with pre-existing health problems or make them pay higher rates and people will be allowed to buy health insurance through exchanges.
Also influencing the market for medical device makers is a hearing by a panel of experts with the Food and Drug Administration on the safety of metal-on-metal replacement hip implants. They're weighing growing evidence that the devices can break down earlier and expose patients to dangerous metallic particles.
In morning trading, shares of Medtronic Inc. added 42 cents to $37.49, while St. Jude Medical Inc. stock lost 38 cents to $38.26 and Boston Scientific Corp. shares fell 13 cents, or 2.3 percent, to $5.51. Stryker Corp. fell $1.24, or 2.3 percent, to $53.09.
