Healthcare and some related sectors have provided conservative 'cover' when other equity areas have been funky. In recent months, that trend has disappeared. Legislation regarding Medicaid and now Pharma, has placed a lot of pressure on various companies in this space.....hospitals, insurance companies, service vendors and manufacturers.
We've already off-loaded some of FHLC (Fido health). Looks like there will be more to come.
Healthcare is included in many broad funds, too. Add with the sloppy market today, healthcare and pharma losses will have added to the down mode. Globally, healthcare and related sectors were down -2.5 through -3%.
Anyway, our 25% of total portfolio in healthcare, is now a much smaller number today.
--- On July 31, 2025, President Donald Trump sent letters to the CEOs of 17 major pharmaceutical companies, including Eli Lilly, Pfizer, and Merck, demanding they take steps to reduce drug prices in the U.S. within 60 days. These letters follow an executive order signed by Trump in May 2025 aimed at implementing a "most-favored-nation" (MFN) drug pricing policy.
The letters called on the companies to:
Provide their full portfolio of existing medicines to Medicaid patients at the lowest prices offered in other developed nations (the MFN price).
Guarantee that newly launched drugs will be offered at MFN prices to Medicare, Medicaid, and commercial payers.
Negotiate harder with foreign nations to raise prices internationally, and repatriate increased revenues abroad to lower drug prices for Americans.
Adopt models that sell medicines directly to consumers or businesses at MFN prices, effectively eliminating middlemen.
The letters state that if the companies refuse to comply, the administration will "deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices". The deadline for a binding commitment to these terms is September 29, 2025.
Drug manufacturers have largely resisted the MFN policy in the past, arguing it could stifle innovation and hurt the industry's ability to develop new therapies. Some companies responded to the latest demands by stating they are willing to work with the administration to improve access and affordability. The industry's largest trade group, PhRMA, took a stronger stance against the proposed changes, arguing that "importing foreign price controls would undermine American leadership, hurting patients and workers".
Comments
Just don't use the P word. Ain't got nothing to do with your investments.
spent significantly more money lobbying than any other industry.
During this period, it spent $6.47B while the "second-place" industry (insurance) spent "only" $3.82B.
I'm very much in favor of lower overall prescription drug prices for Americans.
I doubt prescription drug prices will decrease in a meaningful way since the pharmaceuticals/health products
industry wields so much influence via their
legal briberylobbying expenditures.This is one instance where I hope to be proven wrong.
https://www.opensecrets.org/federal-lobbying/industries?cycle=a
Part of our thoughts about where to invest comes from where is the demand?
We knew and watched prior generations and the monies that were going towards health related....providers, insurance, technology, etc. We followed the money.
A fairly conservative equity path and decent dividends. And we maintain other equity with growth; as well as MMKT and IG bond fund.
We sincerely are in favor of lower drug prices, while allowing for nominal profits.
LAST for tonight. SOON the U.S. will be surrounded by the TARIFF curtain.
A good evening to all.
Catch
To be clear, I wasn't questioning your healthcare investment decisions or sincerity in lowering drug prices.
Anyway, I'm holding on to FSMEX in the taxable. I got a nice price for it in June of 2018, so I don't feel bad about it.
At that price point period you're doing fine with the annualized return.
We hold the similar sector with the etf, IHI.
Rolling ten year returns for VGHCX from 1984-2025
Big drop from 15, 12, 10, 9,8, all way down to 5%. How much lower can P/E ratio go for these stocks?
https://bing.com/th/id/BCEI.6d2ebec9-20fc-4404-9dc6-9f3a74d6c0b7.png
For the majority: Buffett and Bogle have told you for decades to invest in the SP500.
"If you are not a professional investor; if your goal is not to manage in such a way that you
get a significantly better return than the world, then I believe in extreme diversification.
I believe that 98 or 99 percent —maybe more than 99 percent—
of people who invest should extensively diversify and not trade.
That leads them to an index fund with very low costs.
All they’re going to do is own a part of America.
They’ve made a decision that owning a part of America is worthwhile.
I don’t quarrel with that at all. That is the way they should approach it."
https://financinglife.org/learn-how-to-invest/warren-buffett-on-diversification/