Anyone who’s had contact with the medical system in the United States lately knows that costs are on the rise and heading rapidly out of control. That—plus the fact that this is an election year—likely explains a lot of why the Biden Administration announced plans to roll out a new task force to take on healthcare costs. For healthcare stocks, meanwhile, the news was mostly unpleasant.
In fact, several of them were in open decline as a result. Pfizer (NYSE:PFE) and Cigna (NYSE:CI) were down fractionally, while UnitedHealth (NYSE:UNH) was down nearly 1.5%. Eli Lilly (NYSE:LLY) took the worst of it, down over 2%, and Bristol-Myers Squibb (NYSE:BMY) managed to buck the trend by rising 1.5%.
The plan, set to be announced this week, will feature a new federal task force whose purpose is to pursue lower healthcare costs. It will feature membership from the Federal Trade Commission (FTC), the Justice Department, and the Department of Health and Human Services (HHS). The primary target of this task force will be drug prices and those of healthcare providers in general. Meanwhile, the FTC is set to host a workshop on private equity investment in healthcare markets, including a panel on “…buyouts in healthcare.”
Little More than a PR Stunt
While this newly-minted task force certainly looks good and comes during an election year at a time when every vote counts—FiveThirtyEight polls put Biden’s approval rating at 38%—it’s likely to be little more than a PR stunt designed to make people think that the Biden Administration is actually “doing something” about a larger problem. KFF polling data revealed that around half of U.S. adults find healthcare costs a challenge.
Meanwhile, Harvard Healthcare Systems noted that a serious illness could mean outright bankruptcy for many. Even being fully informed in advance doesn’t always help; surprise bills still arrive, even after asking plenty of questions and using only recommended doctors. So, Biden’s chances of producing much more than hot air out of this “task force” are, at best, minimal.
Which Healthcare Stock is a Good Buy Right Now?
Turning to Wall Street, UNH stock is the current leader here, with a 25.87% upside potential against an average price target of $597.64 per share on this Strong Buy-rated stock. Meanwhile, BMY stock is the laggard in the field, as this Hold-rated stock can only offer a 7.76% upside potential against its average price target of $55.71 per share.
