Pharmaceutical exchange traded funds (ETFs) could see the effects of a Democrat-controlled Congress on the horizon. Peter Benesh of Investor’s Business Daily writes that drug makers, pharmacy benefit managers and drug distributors will take the first hits. Leading Democrats promise to bring in legislation that will allow Medicare to negotiate drug prices with suppliers. Medicare’s bargaining power could push drug prices down across the board. Generic drugs won’t get a boost either, partly because the trend is already established and they offer higher profit margins than brands. Pharmaceutical ETFs to keep an eye on include:

  • Pharmaceutical HOLDRs (PPH)
  • iShares Dow Jones US Pharmaceuticals (IHE)
  • PowerShares Dynamic Pharmaceuticals (PJP)
  • SPDR Pharmaceuticals (XPH)
  • iShares S&P Global Healthcare (IXJ)

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.