Different types of health care stock

Different types of healthcare stocks

The healthcare sector is so broad that there are several different kinds of healthcare stocks. Four of the most important types of healthcare stocks are:

1. Drug stocks: Drugmakers focus on developing drugs for treating diseases. Biotechs use live organisms such as bacteria or enzymes to develop drugs, while pharmaceutical companies use chemicals to develop drugs. Drug stocks range from huge companies with billions of dollars in sales each year to small biotechs with no products on the market yet.
2. Medical device stocks: Medical device companies make devices that are used in the care of patients. These devices range from simple, such as disposable gloves and thermometers, to very complex, including artificial heart valves and robotic surgical systems.
3. Payer stocks: Payers, including health insurers and pharmacy benefits managers (PBMs), play an especially important role in the U.S. healthcare system. Insurers charge premiums to individuals and employers to pay for healthcare costs, while PBMs administer prescription drug benefits for employers and health plans.
4. Healthcare provider stocks: Healthcare providers stand at the front line delivering healthcare services to patients. They include hospitals, physician practices, home health companies, and long-term care (LTC) facilities.