Help From the Hill Could Add to Pharma ETFs' Gains | ETF Trends

Congress is working on reform legislation in the pharmaceutical industry to stomp out copycat drug makers, lifting large pharmaceutical stocks and related exchange traded funds.

The SPDR S&P Pharmaceuticals ETF (NYSEArca: XPH) was the best performing non-leveraged ETF over the past week, gaining 9.2%. XPH is up 55.1% year-to-date.

On Tuesday, the Senate voted 97 to 1 to advance the Drug Quality and Security Act (H.R. 3204), according to TheStreet.

The bill places compounding pharmacies under Food and Drug Administration review, which will offer greater drug oversight and potential enhance the safety and quality of medicines in the U.S.

Compounding pharmacies alter ingredients to create customized medications for specific patients. Under the proposed regulations, these pharmacies would not be able to copy widely available, FDA-approved drugs.

If the bill is signed into law, large pharmaceutical companies could see sales rise as compounding pharmacies are prohibited to copy approved drugs.