Healthcare stocks experienced significant volatility to close the week, driven by regulatory actions and a major profit warning from a managed care provider. The Health Care Select Sector SPDR Fund (XLV) managed a 1.85% gain, closing at $157.71, masking sharp individual moves.
Regulatory Pressure Hits Telehealth
Hims & Hers announced it will discontinue access to its compounded semaglutide pill, previously marketed for $49 per month. The decision follows a statement from the U.S. Food and Drug Administration signaling a crackdown on non-approved compounded versions of popular GLP-1 drugs used for weight loss and diabetes. Shares of Hims fell 15.9% on Friday to $19.36.
The FDA indicated it plans to take "decisive steps" to restrict the use of GLP-1 active pharmaceutical ingredients in custom-mixed drugs that have not undergone its standard approval process. This move introduces fresh uncertainty for companies operating in the booming weight-loss drug sector.
Molina's Stark Forecast Sinks Shares
In a separate development, Molina Healthcare saw its stock plunge over 28% after issuing a 2026 profit forecast that came in at less than half of analyst expectations. The company also announced plans to exit Medicare Advantage prescription drug plans in 2027. CEO Joseph Zubretsky cited an "imbalance between rates and trend" as creating a trough year for Medicaid industry margins.
Investors are now closely parsing how other managed-care companies will describe their outlooks for medical costs in the coming year, with regulatory scrutiny and reimbursement rates creating a volatile environment.
Market Looks Ahead
The focus shifts to Monday's trading session, where the market will fully digest the Hims reversal and its implications for the telehealth and compounding pharmacy landscape. The broader question remains whether regulatory or legal actions will accelerate changes across these industries.
Earnings season continues to provide direction, with CVS Health scheduled to report quarterly results on Tuesday. Analysts will scrutinize its guidance, pharmacy benefit trends, and any commentary on sector-wide medical cost pressures.
