Healthcare stocks, the worst-performing sector in the S&P 500: 5 things to know

Healthcare stocks have not kept up with the broader market in 2016, according to a Wall Street Journal report. Here are five things to know about healthcare stock performance this year.

1. So far in 2016, healthcare stocks are the worst-performing sector in the S&P 500, with shares down 7.7 percent compared with the broader index's 2 percent gain, according to the report. The decline came amid investors' concerns about various healthcare issues, including the ACA and drug prices.

2. The Nasdaq Biotechnology Index has fallen approximately 26 percent this year. Biotechnology shares were dragged down amid worries that policy makers could impose drug-price controls, according to the report.

3. Amgen's shares fell 10 percent Oct. 28 after the company announced it would not significantly raise the price of its best-selling arthritis drug Enbrel, which produced strong sales in the last few years due to multiple price hikes. That same day, McKesson, a large wholesale drug distributor, lost a fourth of its market value — about $9 billion — after reporting lower profits for the fiscal year 2016. The San Francisco-based distributor identified tough competition and a slowdown in price inflation for brand-name drugs as the contributing factors to its losses.

4. Johnson & Johnson and Merck are both up more than 11 percent, and overall the life and health insurance subsector of the S&P 500 has risen 5 percent so far in 2016, according to Wall Street Journal.

5. Several investors and analysts said in the report that they expect a clearer view of the political outlook for insurers and drug companies after the presidential election. The report notes that Mrs. Clinton, as well as Republican presidential candidate Donald Trump, have criticized drug prices and want to make changes to healthcare.

 

More articles about healthcare finance:
For-profit hospital stock report: Oct. 31-Nov. 4
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Palouse Capital Management lowers stake in CHS

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