(Health care reform story updated with General Mill's response to the new health care law).
NEW YORK (TheStreet) -- In the wake of the sweeping health care reform bill passed by the House on Sunday and signed into law by President Barack Obama on Tuesday, a number of companies have begun to announce that their bottom lines will be damaged by a tax change in the new law.
From Deere (DE) and Caterpillar (CAT) to Verizon (VZ) and Medtronic (MDT), to AT&T (T) and 3M (MMM), U.S. firms have been issuing notices of upcoming one-time tax charges based on what the Obama administration refers to as the closing of a tax loophole.
On the other hand, drugstores like Walgreen (WAG) and CVS (CVS) and pharmaceutical giants like Pfizer (PFE), Merck (MRK), Johnson & Johnson (JNJ) and GlaxoSmithKline (GSK) should benefit from the new law, according to IBISWorld analyst Sophia Snyder.
Pharmaceutical giants "all stand to benefit in similar ways," Snyder says. Snyder notes that 32 million people will now gain access to prescription drugs, while studies indicate that there's 75% more prescription drug use among people with prescription drug coverage than those who don't. By 2011, it's expected that pharmaceutical companies will also be making available a 50% discount for brand-name drugs for seniors who fall into the "doughnut hole," or the Medicare Part D prescription-drug coverage gap.There will also be a 12-year extension on vaccine-brand protection under the reform, at a time in which "vaccines are becoming a bigger part of pharmaceutical industry," Snyder says. "A lot of blockbuster drugs are set to expire in 2011 and 2012, so many companies have shifted to vaccines." With more people insured under the new law and the anticipation of more people buying more prescription drugs -- a large chunk of Walgreen's revenue -- the company could stand to benefit, Synder says. Also, both Walgreen and CVS have in-store clinics, so she adds that "with more people being insured, there's going to be a predicted shortage of access to getting into your primary doctor for basic things like colds. So in-store clinics could stand to benefit from an overflow of patients who can't go to see their primary doctors." Meanwhile, which companies are crying foul -- and issuing forecasts of future loses based on one-time tax charges? Read on to see...
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