Coronavirus could increase demand for hospital services and drive up costs if it spreads widely in the U.S., according to a new report by Moody's Investors Service.
Four key takeaways:
1. An increase in demand stemming from the outbreak could force hospitals to bolster staff with costly contracted workers and cancel profitable procedures such as orthopedic surgeries.
2. The outbreak could significantly impair the supply of generic drug manufacturers, many of whom source ingredients in China, unlike branded pharmaceutical companies. Ingredient shortages could rapidly drive up the cost of certain drugs.
3. Many U.S. device companies depend on China for components such as memory chips; failure to quickly contain the outbreak could lead to shortages of these items.
4. Medical and research companies could experience low demand for their products amid heightened focus on coronavirus. On the other hand, branded drugmakers could see an "upside" if they develop effective medications to treat the virus.