With pharma stocks trading at a major discount to the broader market, investors are closely watching developments in the sector. The SPDR S&P Biotech ETF, meanwhile, was basically unchanged last year despite huge gains for innovation counterparts in the tech sector. The stagnation in biotech ETFs reflects the broader challenges faced by pharmaceutical companies, including regulatory hurdles, pricing pressures, and changing political landscapes.

The pharma lobby suffered a major blow when the Biden administration pushed through Medicare’s drug-price negotiation law. This regulatory move has sparked uncertainty, as investors assess its long-term impact on the profitability of major drug makers. Meanwhile, industry executives have pointed to Trump’s promises to cut taxes and crack down on pharmacy-benefit managers as evidence that his policies might benefit the industry as a whole. The potential for policy shifts in upcoming elections adds another layer of complexity to pharma investments.