An expensive new hepatitis C treatment and the company's expansion into new markets are among the elements McDonald expects to strain future earnings. He lowered his rating on the shares to "Sell" from "Neutral."
McDonald also said in a Monday evening research note that some of the stock's recent growth was fueled by speculation about a possible takeover by the Catholic health care system
Health insurers started warning earlier this year about the high,
McDonald expects use of those drugs to double in the current quarter.
The insurer also expanded its presence in
Insurers are typically limited on the care management they can do after entering a market. States often require them to let patients initially continue to see doctors that may not be in their provider network, or an insurer may have to cover a drug that isn't in its pricing formulary.
McDonald said he's concerned the insurer hasn't been conservative enough in estimating the losses it will incur.
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