After Republicans garnered sweeping victories in the U.S. Congress and the presidency, healthcare companies across sectors saw stock prices spike or plummet depending on how investors perceived President-elect Donald Trump's decisions during his first 100 days in office would affect the industry.
Pharmaceuticals
According to an article in Bloomberg, pharmaceutical stocks and bonds rallied following Mr. Trump's victory. According to the stock prices listed on CNNMoney from market close Tuesday to market open Wednesday, Pfizer, the largest U.S. drug manufacturer, saw its stock rise 5.82 percent. Novartis' stock price rose 4.22 percent and Roche witnessed a 5.37 percent jump.
"Most biotech and pharma companies might be sighing a sigh of relief because Mrs. Clinton looked like she might do something drastic on drug pricing," Clive Meanwell, MD, PhD, CEO of pharmaceutical giant The Medicine Company, told Bloomberg. "I suspect [Mr. Trump] will have bigger healthcare topics to take on first."
Hospitals and health systems
"[Hospitals'] stocks are really taking it on the chin, because the market abhors uncertainty," Sheryl Skolnick, an analyst at investment firm Mizuho Securities, told Bloomberg. "We know this is the worst possible outcome, but we don't know how bad it is."
The nation's three largest for-profit hospital operators saw their holdings take a significant tumble between the market closing Tuesday evening and reopening Wednesday morning. According to the prices listed on CNNMoney, Franklin, Tenn.-based Community Health Systems, which was plagued by financial insecurities prior to the Nov. 8 election, saw its shares decline 21.55 percent. Nashville, Tenn.-based Hospital Corporation of America stock fell nearly 10.8 percent. Dallas-based Tenet Healthcare stock slid 24.96 percent.
HIT
A dip in some health IT firms' stock reflects the post-election plunge in hospital stocks, analysts said. Hospitals need capital to invest in technology vendors, and the ACA's potential repeal could negatively impact hospitals' capital reserves. From market close Tuesday to market open Wednesday, Cerner's stock fell from $56.65 to $50.22, or a 4.6 percent decrease.
"A good portion of Cerner's revenue is driven by hospitals and capital spending from hospitals," Jeffrey Loo, an equity analyst at CFRA Research, told Kansas City Business Journal. "That's why you're probably seeing their stock decline."
IT companies in the business of value-based care are slightly more confident in their future. Privia is one of many companies that provide software and services to help healthcare providers transition to value-based care models and ACOs. Privia CEO Jeff Butler told Washington Business Journal hospitals will continue to require Privia's services because the ACA's potential repeal would not affect the move to value-based care.
"We don't think the gas will be let off, but rather we believe a Republican administration will be more inclined to back market-based reforms," Mr. Butler said.
Health insurers
An incoming Trump administration has left health insurers' stocks in flux amid the possibility of an ACA repeal and uncertainty regarding its replacement.
Some managed care and exchange companies that have been performing well under the ACA saw their stocks plummet. St. Louis-based Centene's stock dipped 19 percent and closed at $54.05 Wednesday, according to the St. Louis Post-Dispatch. Long Beach, Calif.-based Molina Healthcare saw stock fall about 15 percent Wednesday.
Centene CEO Michael Neidorff said the market's reaction was a "gross overreaction" to election results and that the stocks will recover.
"We are the one company left standing with a very successful exchange product," Mr. Neidorff told the St. Louis Post-Dispatch. "We've let investors know that and I'm sure that plays in their mind."
Commercial insurers' stock performance following the election was mixed. Aetna's stock increased 3 percent mid-Wednesday, while UnitedHealthcare stock dipped 2 percent, according to The Washington Post. Since Tuesday, Anthem's, Cigna's and Humana's stocks have experienced a steady upward trend.