Tuesday's midterm election results were welcome news for Big Pharma. 

Drug stocks rose on Wednesday, Nov. 7 amid perceptions that a divided Congress makes it less likely for major changes to occur in the drug-pricing environment in the U.S., analysts said.

"Though we didn't view last night's outcome as removing all political risk to the group, it should make it more difficult to enact any major changes to the drug-pricing regime in America (which was already unlikely) and help improve investor sentiment, especially for the larger-caps," wrote biotech analysts at RBC Capital Markets LLC in a Wednesday note.

On Wednesday late morning, shares of Pfizer (PFE) were trading up 3%, Eli Lilly (LLY) was up 3.8%, Bristol Myers Squibb (BMY) was up 2.3%, Merck (MRK) was up 2.4% and GlaxoSmithKline (GSK) was up 2.7%

A split Congress is the best-case scenario for the sector, analysts said.

Jefferies LLC analyst Michael Yee said in a phone interview Wednesday he thinks that "there should be some relief rally to a degree in biopharma due to the fact that there were no shocking surprises or results that spooked people."

The Nasdaq Biotechnology Index was up 1.5% to 3,462.39 in morning trading, while the NYSE Arca Pharmaceutical Index rose 1.8% to $592.68.

House Minority Leader Nancy Pelosi said in a speech on Wednesday night that Democrats will work on, among other things, bringing down the cost of healthcare by lowering prescription drug costs.

Yee said he expects Pelosi to announce priorities including greater pressure on lowering prescription drug pricing over the coming months.

Democrats' legislative agenda could include "potentially scary proposals that could be negative for biopharma," Yee said. These include increasing efforts to have Medicare negotiate prices, limiting drug price increases and having greater transparency on what drug companies are doing, he said.

Having a split Congress, however, "makes it more difficult to have more arduous legislation pass," he said.

The election results are favorable to pharmaceutical companies compared to a Democratic sweep of both chambers, according to Jeff Marks, senior portfolio analyst at Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio, which owns Amgen Inc. (AMGN) .

"In the event both sides come to an agreement to reduce prices, I'd still view Amgen as a special situation in the sector," Marks said. "[Migraine prevention drug] Aimovig is off to one of the best starts the industry has seen and management strategically slashed prices for [cholesterol medicine] Repatha not too long ago."

Shares of Amgen climbed 2.6% to $195.77 on Wednesday morning; they are up about 13% so far this year.

Abbott Labs and Amgen are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells ABT or AMGN? Learn more now.

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