TLTP
\nNEW YORK
\nThe sector outlook for the US healthcare and pharmaceutical companies in 2021 is stable, according to Fitch Ratings, an the rating outlook is also stable. The stable sector outlook for 2021 reflects an expectation that favourable pre-pandemic operating trends are largely intact for the US healthcare and pharmaceutical issuers. A solid demand Outlook remains supportive of credit profiles, but threats to profitability are expanding, including weaker pricing power in a recessionary environment.
\nHowever, the industry has historically proven adept at defending profitability in the face of regulatory and macroeconomic headwinds, and we believe the recession-resistant nature of demand will help issuers maintain financial flexibility in 2021.
\nDownward rating migration for the Fitch-rated group of issuers continued in 2020 for the sixth consecutive year, with downgrades outpacing upgrades by 1.6:1. Most downgrades were caused by idiosyncratic factors influencing credit profiles, rather than pandemic-induced operational stress. Pandemic-related downgrades have been scarce among the Fitch-rated group of healthcare companies, as liquidity was supported by fiscal support and capital market access during the worst of the pandemic\u2019s business disruption, and business models remain robust.
\nAbout two-thirds of Fitch-rated issuers currently have a stable rating outlook, 17% a negative outlook and 10% a positive outlook. The remaining issuers are rated \u2018CCC\u2019 and below, which Fitch has elected not to assign an Outlook.
\nThe mix of outlooks is improved from a year ago, when nearly 30% of issuers had a negative outlook. Branded and generic pharmaceutical manufacturers still are the largest portion of issuers with a negative outlook.
\nGeneric pharma companies face ongoing erosion of pricing power and elevated contingent liability risk, while negative outlooks for branded pharma companies primarily reflect balance sheet erosion from funding strategic M&A.<\/p>\n","protected":false},"excerpt":{"rendered":"
TLTP NEW YORK The sector outlook for the US healthcare and pharmaceutical companies in 2021 is stable, according to Fitch Ratings, an the rating outlook is also stable. The stable sector outlook for 2021 reflects an expectation that favourable pre-pandemic operating trends are largely intact for the US healthcare and pharmaceutical issuers. A solid demand […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-158870","post","type-post","status-publish","format-standard","category-business"],"yoast_head":"\n