In the US stock market, the healthcare sector is represented by the sector spider XLV. Here’s a recent pre-inauguration picture of the sector spider’s performance.
As of pre-inauguration, on January 17, 2025, the ten largest holdings in this sector spider ETF were:
Eli Lilly and Co. 11.58%
UnitedHealth Group Inc. 9.12%
Johnson & Johnson: 6.90%
AbbVie Inc. 5.95%
Merck & Co Inc. 4.94%
Thermo Fisher Scientific Inc. 4.17%
Intuitive Surgical Inc. 4.04%
Abbott Laboratories: 3.83%
Danaher Corp. 3.02%
Pfizer Inc. 2.91%
(https://stockanalysis.com/etf/xlv/holdings/)
The following is my opinion only. Disclosure: I do not own this ETF in my personal accounts. I do own the sector as part of the broad-based S&P 500 Index ETF, SPY. I do own some relatively small biotech companies that are not included in the S&P 500. Please note that I’m not recommending anything, only disclosing.
A multi-item reading list is at the bottom. Let’s get to some bullets after first offering this quote from the recent pre-Inauguration Day JPM conference:
The new administration will bring radical change,” said Albert Bourla, CEO of Pfizer. “There are several people that think for our industry, the risks outweigh the opportunities. There are other people — among them, myself — who think that the opportunities outweigh the risks. (Source: Bloomberg)
1. As the chart above shows, this sector ETF topped out at its 10-year peak high price of nearly $160 last summer. It subsequently fell in price to about $137 around yearend 2024. Note that Robert Kennedy Jr. suspended his political campaign on August 23 and endorsed candidate Trump on August 24. Within a few trading days, the ETF made a double top and then started to decline. I will leave it to readers to assess if there is only coincidence here or if there is also causality.
2. The healthcare sector of the US economy was most recently estimated at 18.1% of GDP (www.Altarum.org). It is huge. There are about 162 million people employed in the United States (Source: BLS). Over 9% of them work in the healthcare sector.
3. Healthcare insurance is a monster issue. Nearly all public-sector (government at all levels) employees have coverage. The US Census Bureau says that, at the state level the percentage of private-sector employees in establishments that offer health insurance ranges from a low of about 70% (Wyoming) to a high of about 98% (Hawaii).
4. The demand for healthcare services is growing continually in America as the country ages. The Covid-shock decline in life expectancy has stopped. The Long Covid issue still impacts the US negatively. Millions of people have Long Covid symptoms. You will find the link to the Yale Long Covid activity in the reading list.
5. Increasing numbers of US citizens are rejecting various vaccinations and preventive medicine approaches. But the evolution of diseases ignores politics. The recent US H5N1 bird flu death in Louisiana is alarming, along with the mutations of the virus that occurred in that patient. So far, the pathogen hasn’t fully mutated to readily infect human airways. So far, we haven’t detected any verified clusters of human-to-human transmission. (Note that the CDC now advises that hospitals rapidly subtype all cases of Flu A to improve surveillance for H5N1; this is how you do pre-epidemic surveillance.) This situation could change at any time or never. “Never” seems unlikely, given the spread of the virus in mammals as well as birds. Meanwhile, H5N1’s impacts in the US are showing up everywhere, from the price of eggs to efforts at bird flu vaccine preparation.
6. Climate change and warming make the headlines daily with fires or hurricanes. There’s less attention to the expanding geographical range of mosquito-borne diseases in America and around the globe. We may swat a mosquito or use repellent to protect ourselves and consider the insect an annoyance, but the threat is more serious than itchy bites. And who doesn’t remember the children’s story “Punish the Mosquito.” But dengue, zika, chikungunya, malaria, and other diseases don’t care about our annoyance.
The only thing we can forecast today is that things are changing, and the new politics of the US are likely to include more changes in healthcare. These changes may result in a disruption for many. Here’s an example and an inventory of a disruption: “What does Trump’s move to quit WHO mean for U.N. agency and global health?” https://www.reuters.com/business/healthcare-pharmaceuticals/trumps-withdrawal-us-who-impact-global-health-2025-01-21/ .
In our new book, The Fed and The Flu, my co-authors and I discuss what happens with healthcare after pandemics, epidemics, and plague shocks. We examine that from antiquity to Covid and the post-Covid evolution of Long Covid cases. Here’s the book website: www.thefedandtheflu.com.
Much history is recounted in the book. So are examples of how economic shocks from pandemics are different than those from fires, hurricanes, or wars. Today in the United States, we are witnessing the long shadow of Covid at the same time we are witnessing climate change impacts revealed in damage and destruction from coast to coast. Hotter temperatures, rising sea levels, and stronger winds are exacerbating the shocks from disease and mutating viruses. I personally am not sanguine about the outlook.
The reading list below is diverse and meant to suggest some different views about what is coming and whether we are sufficiently prepared as a people and as a nation. Having just finished a five-year journey of research for the new book, IMO, we are not prepared. What’s worse is that we may be embarking on a path fraught with increasing risk.
Here’s a reading list to spur thinking.
You are invited to start with our new book. Please email me if you have any difficulty with any links when ordering the book. An excerpt from the chapter about the Asian Flu in 1957 is at the end of the reading list.
Amazon:
Barnes and Noble:
Reading List
“A Dangerous Time for America’s Children: Part II,” https://pauloffit.substack.com/p/a-dangerous-time-for-americas-children-3bb
“RFK Jr. suspends his presidential bid and backs Donald Trump before appearing with him at his rally,”https://apnews.com/article/rfk-jr-trump-speech-arizona-a2638f89ddcb5de03edbe4574ca17d45
“Moderna cuts sales forecast on weaker vaccine demand,” https://finance.yahoo.com/news/moderna-cuts-sales-forecast-on-weaker-vaccine-demand-162509497.html
“Another Pandemic Is Inevitable, and We’re Not Ready,” https://www.bloomberg.com/opinion/articles/2024-12-16/it-might-not-be-bird-flu-but-there-will-be-another-pandemic
“The U.S. withdrawal from the WHO,” https://yourlocalepidemiologist.substack.com/p/the-us-withdrawal-from-the-who
“We are likely at peak season,” https://yourlocalepidemiologist.substack.com/p/we-are-likely-at-peak-season
“Why everyone has a gnarly stomach bug right now, explained in one chart,” https://www.vox.com/even-better/393811/norovirus-surge-vomiting-diarrhea-stomach-bug
“Long COVID Dispatches with Lisa Sanders, MD,” https://www.yalemedicine.org/news/category/long-covid-blog
“December 2024 Health Sector Economic Indicators Briefs,” https://altarum.org/news-and-insights/december-2024-health-sector-economic-indicators-briefs
“Best healthcare jobs in 2025: US News,” https://www.beckershospitalreview.com/rankings-and-ratings/best-healthcare-jobs-in-2025-us-news.html
“Medical Expenditure Panel Survey – Insurance Component Shows 86% of Private-Sector Employees Worked for Establishments that Offered Health Insurance,” https://www.census.gov/library/stories/2024/02/health-care-costs.html
“Camp Kotok – Judith Monroe from CDC Foundation & David Kotok explore Zika & other initiatives of CDC,” https://davidkotok.com/2025/01/13/camp-kotok-judith-monroe-from-cdc-foundation-david-kotok-explore-zika-other-initiatives-of-cdc/
Zika, https://davidkotok.com/document/zika-by-david-r-kotok/
Excerpt from Chapter 11 of The Fed and The Flu. Please note that we are presently observing increasing bird flu risk in the United States.
The 1957 Asian flu pandemic would be the second pandemic to occur during the history of the Federal Reserve. It would mark a historic first, but not where the Fed was concerned.
On April 17, 1957, microbiologist Maurice Hilleman was perusing the New York Times. On page three, his eye was likely drawn first to the photo of Marines landing on a beach in Turkey, but he must have also been interested to read the article at the top left, about a possible link between radiation exposure from hydrogen bomb tests and bone cancer. The slim article titled “Hong Kong Battling Influenza Epidemic,” though, was just four inches of copy — a mere eight sentences — sandwiched just above the ads for Brooks Brothers worsted suits, Macy’s shoes, men’s ties, a lacy nylon blouse, and a beauty treatment for blackheads. The article reported “thousands of cases” of influenza in Hong Kong and mothers standing in long lines seeking treatment for their “glassy-eyed children, tied to their backs.”
Maurice Hilleman immediately recognized a possible flu pandemic in the making. At the time, Hilleman was working at the Walter Reed Institute of Army Research, where he had identified changes that could happen when a virus mutated. The next day, he sent a message to the Army Medical General Laboratory in Japan, asking them to investigate
the outbreak. They were able to send him a saliva sample from a U.S. servicemember who had caught the virus. Studying the new influenza virus in the sample, he quickly identified two key changes that rendered most people susceptible to the new strain. He verified
that U.S. soldiers had no antibodies to fight the new flu. Only elderly survivors of the Russian Flu pandemic of 1889–1890 would have any immunity. (That epidemic infected 4 million people in Britain and killed at least 125,000 of them.) Once other labs confirmed his findings, Dr. Hilleman announced that an influenza epidemic was coming, and he set out to ensure that a vaccine would be available by the time schools reopened in September.2 Because of his timely realization and quick action, 40 million doses of vaccine were produced in the United States by fall.
Since the U.S. population by the end of 1957 was just shy of 172 million people, 40 million doses of vaccine were not nearly enough for everyone who wanted protection to have it, but the vaccine assuredly saved lives. The Asian flu pandemic marked the first time in history that a vaccine had been developed to blunt the impacts of an influenza pandemic. Such a vaccine might not have existed in 1957 either had it not been for Hilleman and an eight-sentence report in the New York Times. The 1957 experience — when the World Health Organization had missed foreseeing the outbreak and matters came down to a physician scientist reading a newspaper — underlines the never-ending importance of global surveillance that enables early detection of new infectious diseases in time to prepare and react. The key observation that Dr. Hilleman made about influenza viruses — that genetic drift caused the flu to mutate regularly — would presage the need for annual flu shots. The epidemic in 1957 might have been even worse if not for Dr. Hilleman. The vaccine would limit the death toll among Americans, but the toll might have been even lower if the vaccine had been made available to everyone sooner. Maurice Hilleman developed more than 40 vaccines in his long career, a record that remains unmatched today. He created vaccines for the measles, mumps, hepatitis A and B, rubella, pneumonia, and meningitis, among others. At least a million lives were saved by his measles vaccine alone.
Though the Hong Kong epidemic finally made the news in April of 1957, it actually began in February in East Asia, when a subtype of influenza A underwent genetic modifications after an animal host was infected with both that strain and an avian influenza strain. The two viruses combined, reassorting their genes and producing a new influenza A strain that would be named H2N2. Such mutations are common occurrences. Genetic drift and more reassortment would combine to eradicate H2N2 and replace it with another virus, H3N2, in just over a decade. H3N2, in turn, would cause the influenza pandemic of 1968.
Dear Reader, If you are still with me, do you really want the US to abandon the WHO and turn to isolationism?
