Investment Grade Healthcare: Quarterly Healthcare Market Update

Research evidence excerpt

Investment Grade Healthcare: Quarterly Healthcare Market Update

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Investment Grade Healthcare

Quarterly Healthcare Market Update

Rating Change - Credit

Sector Review 29 June 2026

Healthcare outperformed the ICE BofA IG index on a total return basis year to date. High Grade Credit

Performance in the first half was mainly driven by macro uncertainty, given Healthcare is United States

one of the most defensive sectors in investment grade. Despite recent MFN clarity for Healthcare

the majority of pharmaceutical companies, we expect continued regulatory focus on a Andrew Kaplan

potential pull forward of Medicaid work requirements, additional CMMI demo projects, Research Analyst

and another round of Medicare Advantage coding adjustments. Performance during the BofAS+1 646 855 8748

remainder of 2026 will largely be driven by the evolving macro picture and the wave of andrew.kaplan@bofa.com

M&A and issuance we expect. Andrew B. Bressler, CFA

Research Analyst

BofAS

+1 202 442 7454M&A Trend Continues

andy.b.bressler@bofa.com

YTD, $120 bn of M&A was announced vs. $161 bn in 2025. We expect deal volumes to

Vritika Patni

significantly ramp up in 2026. With the announcement of numerous drug pricing Research Analyst

agreements with the Trump Administration, management teams now have more clarity BofAS

+1 646 855 7042

on one of the biggest areas of uncertainty throughout 2025. We believe the totality of vritika.patni@bofa.com

President Trump’s second term will be characterized by a return to M&A in healthcare. In

addition to pharma, we expect increased M&A in Medical Devices (A, MDT, SYK).

Commentary out of management teams points to a preference for bolt-on or mid-sized Exhibit 1: IG Healthcare

deals.