1. Trump's MFN pricing order poses risks to pharma pricing power. 2. S&P sectors rallied while biotech ETFs fell sharply. 3. Long-term effects may cap growth for pharma and affect M&A. 4. Investors overlook potential structural deflation in healthcare profitability. 5. Regulatory risk could alter sector weightings within the S&P 500.
The MFN pricing policy threatens pharma profitability, potentially impacting S&P 500 constituents like Pfizer and Merck. Historical examples show regulatory changes often lead to volatility in these sectors.
The potential structural changes in the pharma sector from regulatory shifts could influence investor sentiment and market dynamics affecting the S&P 500 significantly.
The effects of new pricing regulations can take time to manifest, similar to the gradual impact of the Affordable Care Act on healthcare stocks post-2010.