Democratic presidential candidate Joe Biden has promised to preserve and strengthen Obamacare, a healthcare plan that is much more attractive to major health insurers than Sen. Bernie Sanders’ Medicare for All proposal.
Health insurance industry stocks surged on Wednesday in a broad-based rally following former Vice President Biden’s strong showing in the Democratic presidential primary Super Tuesday contests.
Anthem, Humana, Cigna, CVS Health, and UnitedHealth Group benefited from Obamacare and could do so under Biden’s healthcare plan as well, Motley Fool reported.
United Health Group stock went up more than 12 percent — its biggest one-day gain since October 2008. Cigna was up more than 10 percent in morning trading, Anthem soared nearly 14 percent and Humana jumped 1.25 percent.
Each time rival Bernie Sanders has gained ground for the Democratic nomination, it has rocked health-care stocks over fears that Medicare for All will crush private insurers and drugmakers.
Sanders proposes a national health insurance program that would cover many services without premiums, deductibles, copays or unexpected pharmaceutical bills, “leading to the termination of existing health insurance plans,” according to CFRA analyst Sel Hardy, Marketwatch reported.
Biden is viewed as a safer bet for healthcare stock investors. He promised to fight to preserve the Affordable Care Act that he helped pass into law as Barack Obama’s vice president.
The healthcare market surge came after the roughest week in more than a decade for the stock market, which saw its biggest decline since the 2008 financial crisis, driven by fears of the economic cost of a worldwide coronvirus pandemic.
After Vermont Sen. Sanders won primaries in Iowa, New Hampshire, and Nevada, the healthcare industry spent millions of dollars advertising against Sanders, Common Dreams reported.
“The industry has long seen Biden as their white knight,” said Dr. Adam Gaffney, a Medicare-for-All advocate and president of Physicians for a National Health Program.
Stocks of companies that are working to develop coronavirus vaccines, tests and treatments were also mostly higher.
Inovio Pharmaceuticals says it is accelerating development of a vaccine to treat the coronavirus and expects to start human trials in the U.S. in March. Stock jumped 20 percent on the announcement for a 261 percent gain in three months.
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AIM ImmunoTech is working to bring its experimental drug Ampligen into China as a treatment for the virus. Stock was up 25 percent.
Pfizer Inc. shares were up 3.7 percent after the company said it is screening antiviral drugs in its development pipeline to determine whether they could be effective in treating the illness. Shares of AbbVie Inc, which has donated doses of an HIV treatment to China as a potential treatment option, were up 3.2 percent.
Japanese company Takeda Pharmaceutical’s stock rose 5.4 percent after it announced plans to test a hyperimmune globulin treatment for people at high risk for the coronavirus and will share those development plans with members of Congress.
Vir Biotechnology shares rose 12 percent and Alnylam Pharmaceuticals rose 2.4 percent after they expanded an agreement to advance treatment of the coronavirus.
