Evercore ISI's Umer Raffat on finding value in the beaten-down health care sector

Healthcare Sector Performance & Outlook - Healthcare sector experienced its worst three-year performance in over a decade, with a 25% increase compared to the S&P 500's 57% gain [1] - The healthcare sector's outlook hinges on clarity regarding drug pricing policies, particularly concerning the Most Favored Nation (MFN) [3][9] Drug Pricing & Policy Uncertainty - Uncertainty surrounding the scope of MFN drug pricing policy (Part B vs Part D, commercial spillover) is causing hesitation among generalist investors [2][5][6] - The industry anticipates MFN policy to be limited to Part B (injectable drugs) with potential for improved price points and US-only launches for new drugs, maintaining price integrity [5][8] Innovation & Investment - There is strong innovation within the biotech space, encouraging investment, with broad consensus supporting continued innovation [7] Company Earnings - Managed care companies like Sigma and Humana, along with large-cap pharma including Bristol Myers and Merck, are reporting earnings this week [1]