Investing.com — Healthcare shares within the U.S. and Europe have tumbled since Donald Trump’s election victory on November 5, with considerations rising over the potential coverage impression of his cupboard picks, in accordance with Barclays (LON:).
The sector has underperformed broader indices, with the U.S. healthcare ETF lagging the by round 7%, whereas European healthcare shares have trailed the broader European index by about 1.5%.
The nomination of Robert F. Kennedy Jr. to guide the Division of Well being and Human Companies (HHS) has sparked sharp reactions, particularly in pharmaceutical and biotech shares.
Kennedy, recognized for his vaccine skepticism and criticism of weight problems medicine, has precipitated concern over potential regulatory headwinds.
Kennedy’s statements in opposition to GLP-1 medicine for weight problems, vaccines, and broader FDA insurance policies have raised alarms.
Although analysts at Barclays say these views could also be difficult to translate into actionable coverage.
On Weight problems remedies, the medicare’s protection of GLP-1 medicine like Novo Nordisk (NYSE:)’s semaglutide is at present restricted to sufferers with documented cardiovascular dangers underneath the SELECT trial standards. Increasing protection would require legislative modifications underneath the Deal with and Cut back Weight problems Act (TROA).
Barclays views the business market, moderately than Medicaid or Medicare, as the first progress driver for anti-obesity drugs.
Whereas on vaccine insurance policies, Kennedy’s historical past of anti-vaccine advocacy has amplified skepticism amongst traders.
Barclays highlights Novo Nordisk and Sanofi (NASDAQ:) as shares which were “unduly punished” in response to Kennedy’s nomination. Barclays has reiterated “overweight” rankings for each corporations, viewing the selloff as an overreaction.
Although Barclays notes that whereas the healthcare sector faces near-term challenges, some subsectors might profit from clearer insurance policies over time.
Past Kennedy’s nomination, Trump’s broader cupboard appointments, together with Vivek Ramaswamy to the Division of Authorities Effectivity, have added to investor considerations about regulatory uncertainty.
