RPT-Reuters Summit-Healthcare seeks new prescription for growth

(For other news from the Reuters Health Summit, click here) (Repeats Nov. 6 item to additional subscribers)

* US health reform, patent loss, weak pipelines dog sector

* Cost cutting moves center-stage to protect earnings

* Companies chase new business models, smarter deals

By Lewis Krauskopf and Ben Hirschler

NEW YORK, Nov 6 (Reuters) - A new era is fast approaching for the healthcare industry.

The debate on overhauling the U.S. health system is reaching a fever pitch on Capitol Hill. Within months, efforts may be enacted that will broaden health insurance coverage and lead to new competition, fees and other significant changes that shake up the critical U.S. market.

"It has the potential to really radically redefine the most important market for the majority of healthcare industries," Morningstar analyst Damien Conover said.

Drugmakers are simultaneously confronting the biggest loss of patent protection in history, depriving them of exclusivity on some of the world's most famous and profitable medicines.

Faced with losing billions of dollars in revenue to an increasingly important generics sector, the world's leading drug companies are striking major deals, diversifying and cutting costs.

Yet investors are not convinced they have found the path to sustained profits beyond the patent cliff.

Pharmaceutical stocks worldwide have underperformed the broader market in 2009 and are now trading at a 23 percent forward price-to-earnings discount to the wider market.

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For a graphic showing forward P/Es for pharma stocks, click on: here

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