Economy continues to impact finances of health companies

Despite a sluggish year, health care investors can look forward to growing emerging markets and a possible change in the U.S. political climate, Forbes reports. "Health care has not had a banner year in 2010 as the sector's stocks have underperformed the market on account of reform in the United States and financial problems in Europe. But there's hope for investors in shares of companies that stand on their own fundamentals, particularly those that have been successful in growing sales to emerging markets. Plus a political turnaround in November toward a less hostile House and Senate could provide a positive jolt, as well" (Gutierrez, 7/27).

In Europe, though, drug firms continue to feel a pinch. The Wall Street Journal reports, "the biggest buyers of pharmaceuticals are government-run health-care systems that are feeling the pinch of tightening budgets as deficits are reined in. The pressures are prompting countries, including Greece, Spain and Germany, to cut the prices they pay for medicines. Such moves are lowering profits at drug makers with sizable revenue from the European market" (Gryta, 7/29).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.