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

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Key Takeaways

  • Trump's Great Healthcare Plan targets PBMs and insurers, reshaping profit pools across diverse companies.
  • OTC drug expansion and fewer doctor visits lift retail pharmacies, boosting foot traffic and sales for WMT.
  • MFN pricing deals favor drugmakers that signed on, offering regulatory certainty and perks for LLY.

The recent unveiling of "The Great Healthcare Plan" by the White House on Jan. 15, 2026, has sent shockwaves across the healthcare industry. The plan's core aims are to slash prescription drug prices via “Most-Favored-Nation” (MFN) pricing deals, lower insurance premiums by sending money directly to individuals instead of insurers, and mandate unprecedented transparency from healthcare companies. 

By proposing a shift from corporate subsidies to direct-to-consumer payments and codifying MFN drug pricing, the plan fundamentally redistributes the industry's profit pools. This policy pivot throws a harsh spotlight on every spectrum of the entire healthcare space, ranging from big pharma and massive insurers to local retail clinics, creating a new landscape of regulatory risk and opportunity. 

For investors, this legislative shift isn't just a news cycle — it’s a signal to take a fresh, critical look at their exchange-traded fund (ETF) portfolios to ensure they aren't holding onto the "middlemen" the government is now targeting.

Potential Winners vs Losers of the Plan

The Winners

Retail Pharmacies and Consumer Health: The proposal to allow more prescription drugs to be sold over-the-counter (OTC) is a direct boost to chains like Walmart (WMT - Free Report) . Shifting medications to the OTC aisle drives foot traffic and sales, while reducing the need for doctor visits aligns with their growing clinic businesses. This policy drives revenues directly to their retail segments.

Fintech Healthcare: The plan's biggest winners are those that thrive on consumer choice and transparency, like HealthEquity HQY, which being the leading HSA custodian, is a primary beneficiary of the proposal to send subsidies directly to individual Health Savings Accounts.

Big Pharma That Bagged MFN Deals: Big pharmaceuticals like Merck (MRK - Free Report) , Johnson & Johnson (JNJ - Free Report) , Eli Lilly (LLY - Free Report) , AstraZeneca (AZN - Free Report) and Novartis (NVS - Free Report) , which have voluntarily entered into MFN agreements, are positioned as partners in the administration's efforts. These deals, which the plan seeks to codify into law, grant them advantages like tariff relief in exchange for offering specific discounts on platforms like TrumpRx. This provides them with regulatory certainty and a public relations win, even as the broader impact on their overall profitability remains limited.

Losers in the Crosshair

Conversely, the plan explicitly targets several industry middlemen and sectors reliant on opaque pricing, making them vulnerable.

Pharmacy Benefit Managers (PBMs): The plan vows to "end kickbacks" from PBMs to insurance brokers, placing these drug pricing intermediaries squarely in the regulatory crosshairs. Therefore, companies like UnitedHealth Group (UNH - Free Report) , Cigna CI and CVS Health CVS, which operate massive PBMs, face significant business model risk.

Traditional Health Insurers: The plan's most radical element — stopping "billions in extra taxpayer-funded subsidy payments" to insurers and sending money directly to individuals — threatens the stable risk pools and guaranteed revenues of major insurers like Centene CNC and Molina (MOH - Free Report) .

Why Your ETF Portfolio Needs a Strategic Revamp Now

Trump’s Great Healthcare Plan, offering a combination of lower drug prices, direct-to-consumer subsidies, and mandated transparency, is set to reshape profit pools across the pharmaceutical, managed care and retail health sectors. 

Against this backdrop, investors must therefore revamp their portfolios with precision, using ETFs that provide targeted exposure to the advantaged themes while avoiding baskets of companies facing unified regulatory pressure.

Resultantly, investors may want more selective ETFs that lean into diversified drugmakers and retail providers, while underweighting PBM-heavy insurers and high-overhead payors.

Based on this, investors may want to invest more in the following ETFs:

iShares U.S. Pharmaceuticals ETF IHE

This fund, with assets worth $968 million, offers exposure to 55 U.S. companies that manufacture prescription or over-the-counter drugs or vaccines, many of which are navigating MFN deals. Its top three holdings include JNJ (22.98%), LLY (22.69%) and MRK (4.84%). 

The fund charges 38 basis points (bps) as charges. 

State Street Consumer Staples Select Sector SPDR ETF XLP

This fund, with assets under management (AUM) worth $16.26 billion, offers exposure to 36 companies from consumer staples distribution & retail; household products; food products; beverages; tobacco; and personal care products industries in the United States, some of which are retail medicine providers.

 Its top three holdings include OTC medicines and personal healthcare providers — WMT (11.54%), Costco COST (9.36%) and Procter & Gamble (PG - Free Report) (7.46%).

The fund charges 8 bps as fees. 

iShares U.S. Medical Devices ETF IHI

This fund, with assets worth $4.04 billion, offers exposure to 47 U.S. companies that manufacture and distribute medical devices. IHI provides exposure to a section of the healthcare space largely insulated from the drug pricing and insurance subsidy battles at the heart of the Great Healthcare plan, thus acting as a defensive hedge within the broader healthcare reallocation. 

Its top three holdings include Abbott Laboratories (ABT - Free Report) (17.13%), Intuitive Surgical (ISRG - Free Report) (15.35%) and Boston Scientific (BSX - Free Report) (10.57%).

The fund charges 8 bps as charges. 

On the contrary, investors might avoid investing further in the following ETFs for the time being:

iShares U.S. Healthcare Providers ETF IHF

This fund, with assets worth $750.5 million, offers exposure to 62 U.S. companies that provide health insurance, diagnostics, and specialized treatment. Its top three holdings include UNH (22.2%), CVS (12.29%) and Elevance Health ELV (10.26%).

The fund charges 38 bps as fees. 

State Street SPDR S&P Health Care Services ETF XHS

This fund, with assets worth $101.4 million, offers exposure to 59 healthcare service providers. Its top three holdings include CNC (2.35%), MOH (2.32%) and Alignment Healthcare ALHC (2.29%). 

The fund charges 35 bps as fees. 

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