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The Diagnostic and Statistical Manual of Mental Disorders Means Money for Drug Companies

The Diagnostic and Statistical Manual of Mental Disorders recently released its fifth edition. This manual, now called the DSM-5 has among its additions, a host of new recognized mental disorders that could mean extra revenue for companies that manufacture and sell drugs for the treatment of these and other related disorders.

MarketWatch reports that not only will drug companies begin researching and developing new drugs that will treat these newly recognized conditions, existing drugs could be indicated for treatment.

Several major drug companies could benefit. Shire’s (NASDAQ: SHPG) Vyvanse, a drug for attention deficit disorder, could be used to treat binge eating disorders. Methylphenidate, better known as Novartis’s (NYSE: NVS) Ritalin, could be used to treat hoarding. Pfizer’s (NYSE: PFE) Neurontin, used to treat seizures, could be used for cannabis withdrawal.

Because these drugs will have to be trialed to gain FDA approval for the indication of these disorders, it will time to see the revenue increase but companies like Shire are already trialing Vyvanse for binge eating. Other companies are sure to follow.

Other drugs are may see an uptick in scripts right away. The DSM-5 now allows depression to be diagnosed immediately after the death of a loved one. This will allow psychiatrists and other physicians to prescribe the drug immediately.

Disclosure: At the time of this writing, Tim Parker had no position in any of the equities mentioned.

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