The Supreme Court verdict to uphold the Patient Protection and
Affordable Care Act of 2010 (PPACA) (also known as Obamacare)
provided the much needed impetus to
) business. The manufacturer of the Essure permanent birth control
system is upbeat regarding the fact that under the PPACA, the
entire list of contraceptive methods approved by the US Food and
Drug Administration (FDA), including the Essure procedure, will be
covered by all private insurance plans.
Currently, most insurance plans cover a part of the Essure
procedure. However, as per the ruling, effective August 1, 2012,
the coverage for contraceptive services will become mandatory for
all private health plans. Based on some initial research, Conceptus
estimates that the insurance coverage will build gradually with a
majority of the plans expected to cover the procedure by April
Essure procedure is elective in nature, and often gets delayed amid
economic uncertainty and high unemployment. Conceptus' obstetrics
and gynecology (OB/GYN) office visit trends remained mixed during
the past few months due to macroeconomic pressure. Amidst this
difficult scenario, we strongly believe that this Supreme Court
ruling will emerge as a landmark development for women's health
This will largely benefit Conceptus' sales performance as it will
reduce cost burden and increase access and affordability of the
Essure procedure worldwide. Further, added to the recent exit of
) Adiana from the permanent birth control market Conceptus is
expected to get a double advantage through this latest ruling.
According to the PPACA, all Americans will have access to quality,
affordable health care and will create the transformation within
the health care system necessary to contain costs. The
Congressional Budget Office (CBO) said that the PPACA will cover
over 94% of Americans staying under the $900 billion limit that was
set by President Obama. This in turn is expected to cut the health
care cost reducing the deficit over the next ten years and beyond.
Presently, Conceptus retains a Zacks #2 (short-term Buy) Rank. Over
the long term, we have a Neutral recommendation on the stock.
CONCEPTUS INC (CPTS): Free Stock Analysis
HOLOGIC INC (HOLX): Free Stock Analysis Report
To read this article on Zacks.com click here.