Healthcare Sector Checkup As U.S. Looks To Change Regulations

The U.S. is proposing major policy changes to its healthcare sector, including imposing tariffs on global manufacturers. Jacky He, VP, Portfolio Research, TD Asset Management, joins MoneyTalk for a look at how these changes could impact the global healthcare sector.

Transcript

Greg Bonnell – Many investors view health care as a defensive sector with good growth potential, but it has underperformed the wider market this year. Joining us now to discuss what the key drivers could be going forward is Jacky He, VP for Portfolio Research with TD Asset Management. Jacky, great to have you back on the program.

Jacky He – Thank you so much for having me, Greg.

Greg Bonnell – All right, so when we talk about this underperformance of health care against the broader market, what are the drivers of that?

Jacky He – Well, that’s interesting. Never short of headlines, as you said in the other sectors. But if you look at Q1, the sector actually outperformed.

But interestingly, all those outperformers was given back over the past couple of weeks. Why so quickly? It’s not about any drug trials. It’s not about earnings. It was all about the policy mix that has evolved very quickly over the past couple of weeks.

So think about over the last week, the one Big, Beautiful Bill just passed that’s talking about funding cut for Medicaid. Then we have the most favored nation pricing framework that’s signed into executive order later this month. That’s talking about significant drug price cut.

And then you have the tariffs. Unlike the one that got blocked by the court last night, the sectoral tariffs still remain in place, and that’s coming for the pharmaceutical industry. Last but not least, we know the FDA has undergone a pretty major restructuring. That created some uncertainty for future drug approvals, so that’s