Legislative Risk

The risk that legislation by the government could significantly alter the business prospects of one or more companies, adversely affecting investment holding in that company. This may occur as a direct result of government action or by altering the demand patterns of the company's customers,

Investopedia Says:
An example of an industry with high legislative risk is healthcare. Drug manufacturers and healthcare providers both must contend with many ongoing legislative issues related to Medicare, insurance coverage and other customer payment issues.

Related Links:
We explain the coverage and eligibility rules of this U.S. healthcare program. Medicare: Defining the Lines
These are not equal. Here's why you need to think twice before relying on the government-sponsored program. Medicaid Versus LTC Insurance

Risk that a change in legislation could have a major positive or negative effect on an investment. For instance, a company that is a large exporter may be a beneficiary of a trade agreement that lowers tariff barriers, and therefore may see its stock price rise. On the other hand, a company that is a major polluter may be harmed by laws that stiffen fines for polluting the air or water, thereby making its share price fall.