Healthcare Stocks are underperforming the S&P 500 by the largest margin in 25 years
byu/RobertBartus inEconomyCharts
Pharma, biotech, and managed care have all taken hits. Drug pricing reforms, regulatory uncertainty, and political pressure have weighed on sentiment. Even with the rise of weight-loss drugs and AI-driven diagnostics, the sector has not kept pace. Healthcare now trades at a 20% discount to the S&P 500, a valuation gap that rarely opens this wide.
Some of the drag comes from policy. The Trump administration’s push to align U.S. drug prices with international benchmarks has rattled Big Pharma. Tariffs on medical devices and executive shakeups at major firms like UnitedHealth and Eli Lilly have added to the volatility. The sector, once seen as a defensive play, is now viewed as politically exposed and operationally uncertain.