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Healthcare stocks to buy now for Trump-Biden election: RBC

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  • President Donald Trump and former Vice President Joe Biden have vastly different positions on healthcare, and who wins in November will have massive implications for the industry. 
  • RBC’s analysts identified seven healthcare stocks that investors should buy to prepare for a Biden victory.
  • They predicted Gilead Sciences, UnitedHealth Group, and Mylan would do well regardless of who wins.
  • For more stories like this, sign up here for our healthcare newsletter, Dispensed.

President Donald Trump and former Vice President Joe Biden are facing off in November with vastly different positions on healthcare policy.

Their decisions will affect the hospital, insurance, pharmaceutical, and medical device industries. With three months to go until the election, RealClearPolitics polling averages show Biden has a 7.4 point lead over Trump.

Biden wants to build on former President Barack Obama’s signature healthcare law, the Affordable Care Act, and to give people the option to buy a government healthcare plan instead of private insurance. If more people have coverage, then that’ll put more money in the pockets of healthcare providers.

Conversely, Trump has signed on to a lawsuit that threatens to toss out the entire healthcare law, which would create massive disruption across the healthcare industry. Despite the lawsuit, RBC analysts are predicting a “status quo” for the healthcare industry should Trump win. 

The president recently signed several executive orders on drug pricing, but the rulemaking around them won’t be done until after the election, and even then the industry is likely to challenge them in court. Biden wants to let the government set drug prices, but if he were to sign onto House Democrats’ plan to do so, not all medicines would be affected. 

On economic policy, Biden has vowed to reverse the tax cut Trump signed into law by raising the corporate tax rate to 28% from 21%.

Read more: Trump’s Medicare chief has a big decision to make over whether doctors should be paid for phone calls and video visits. Here are the 3 biggest concerns she’s weighing over the future of healthcare.

Here are the seven healthcare stocks that RBC’s analysts say investors should buy to prepare for a Biden victory. Three of them — Gilead Sciences, UnitedHealth Group, and Mylan — are also top picks if Trump triumphs.

(1) Gilead Sciences

Gilead Sciences (GILD) is a major biotech company that’s developing the coronavirus treatment remdesivir. It also sells drugs to treat viruses like HIV and hepatitis C. The company’s coronavirus work means it’s well positioned to benefit under either a Trump or Biden administration, according to RBC. And even if a Biden administration and a Democratic Congress embark on an effort to lower drug prices, Gilead’s HIV treatments won’t take much of a hit, the analysts said.

“We believe GILD would remain relatively insulated from a Biden win and Democrat sweep,” they wrote.

(2) R1 RCM

R1 RCM (RCM) helps hospitals and doctors collect payment from insurance companies, and its revenue is based on how much money its clients take in. Biden’s plans to expand health insurance coverage to more people would result in more patients seeing their doctors, and more money for R1, according to RBC.

(3) Adapt Health

Adapt Health (AHCO) is a medical-equipment supplier that provides products like CPAP machines and wheelchairs for patients at home. While a Biden win increases the chance of pricing pressure for the medical-equipment industry, Adapt Health could benefit from any disruption that causes in the industry and even acquire rivals facing financial struggles, RBC said. 

(4) UnitedHealth Group

UnitedHealth Group (UNH) is the biggest US health insurer, and it also has a pharmacy-benefits manager, a technology-and-consulting arm, and a medical-care business. The company’s broad range of business lines is part of why RBC’s analysts think it can thrive under either Trump or Biden. In a Biden presidency, UnitedHealth would benefit from efforts to expand the Affordable Care Act, according to RBC.

(5) HCA Healthcare

HCA Healthcare (HCA) operates the biggest chain of for-profit hospitals. Many of the company’s hospitals are in Texas and Florida, states that have relatively high uninsured rates because they haven’t expanded Medicaid, according to RBC. Under a Biden presidency, more people in those states would gain insurance coverage, giving HCA more paying customers.

Read more: These are the most powerful people advising Joe Biden on healthcare as he takes on Trump

(6) AbbVie

AbbVie (ABBV) is drugmaker that sells the arthritis treatment Humira and the cancer therapy Imbruvica. The company isn’t likely to be affected much by any drug-pricing curbs in a Biden administration, according to RBC. Plus, about 9% of its revenue comes from cosmetic products such as Botox, which people tend to pay for in cash.

(7) Mylan

Mylan (MYL) is a large maker of generic drugs. It’s combining with a similar business that’s being separated from the pharmaceutical company Pfizer. After the deal, just 25% of the company’s revenue will come from the US, which helps insulate it from any changes in healthcare policy, according to RBC. That makes the company a good pick whether Trump or Biden are president, according to the analysts. Plus, it’s working on drugs known as biosimilars, which could benefit from efforts to lower drug prices in a Biden administration.

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