Winners & Losers: The ETF Playbook to Glide Trump's Great Healthcare Plan

Core Insights - The Great Healthcare Plan aims to reduce prescription drug prices, lower insurance premiums, and increase transparency in the healthcare industry [1][11] - The plan shifts from corporate subsidies to direct payments to consumers, redistributing profit pools across the healthcare sector [2][10] Winners - Retail pharmacies, particularly chains like Walmart (WMT), will benefit from the proposal to sell more prescription drugs over-the-counter (OTC), driving foot traffic and sales [4] - Fintech healthcare companies, such as HealthEquity (HQY), will gain from direct-to-consumer subsidies, enhancing consumer choice and transparency [5] - Big pharmaceutical companies that have entered into Most-Favored-Nation (MFN) agreements, like Merck (MRK) and Johnson & Johnson (JNJ), will enjoy regulatory certainty and potential tariff relief [6] Losers - Pharmacy Benefit Managers (PBMs) are targeted by the plan, which aims to eliminate kickbacks, posing significant risks to companies like UnitedHealth Group (UNH) and Cigna (CI) [7] - Traditional health insurers, such as Centene (CNC) and Molina (MOH), face threats to their revenue models due to the plan's shift to direct payments to individuals [8] ETF Portfolio Recommendations - Investors are advised to consider ETFs that focus on diversified drugmakers and retail providers while avoiding those heavily invested in PBMs and traditional insurers [11] - Suggested ETFs include: - iShares U.S. Pharmaceuticals ETF (IHE) with $968 million in assets, focusing on 55 U.S. companies in the pharmaceutical sector [12] - State Street Consumer Staples Select Sector SPDR ETF (XLP) with $16.26 billion in assets, providing exposure to retail medicine providers [14] - iShares U.S. Medical Devices ETF (IHI) with $4.04 billion in assets, offering a defensive hedge against drug pricing battles [16] ETFs to Avoid - iShares U.S. Healthcare Providers ETF (IHF) with $750.5 million in assets, focusing on health insurance and specialized treatment providers [17] - State Street SPDR S&P Health Care Services ETF (XHS) with $101.4 million in assets, targeting healthcare service providers [19]