Five years after COVID, pharma shares languish in U.S. policy limbo – CTV
July 23, 2025
MILAN — Global healthcare stocks have not been this cheap in decades and fund inflows into the sector are picking up, yet the shares remain in the doldrums, highlighting uncertainty over drug pricing policies since Donald Trump returned to the White House.
Pharma companies’ earnings outlook is being obscured by concerns over revived “most-favored-nation” drug pricing rules in the lucrative U.S. market and potential 200 per cent tariffs on pharma imports into the U.S.
Money flooded into drugmakers’ shares during the COVID-19 pandemic but more recently there has been an exodus as investors shifted into Big Tech, leaving the sector cheap but unloved.
At 15.9 times forward earnings, healthcare trades 11 per cent below its long-term average and 20 per cent below global equities, its steepest discount in 16 years, just above a record discount in 2009, based on LSEG Datastream data.
“We’ve moved from cautious optimism to cautious pessimism,” said Stephanie Aliaga, global market strategist at J.P. Morgan Asset Management in New York. “Valuations have gotten even cheaper, but for a reason,” she added, referring to intensifying U.S. policy risks.
