Health-care stocks keep getting hammered — Wall Street says this is why

Shares of health-care services companies took another beating Wednesday, as the evolving political climate on health care, including calls for lower drug prices and “Medicare for All” plans, continued to weigh heavily on Wall Street sentiment.

Wednesday’s selloff was led by medical-care services company DaVita Inc. DVA, -7.72% insurer Anthem Inc. ANTM, -3.62% and drug company Alexion Pharmaceuticals Inc. ALXN, -8.05% Health insurers like Anthem and peers UnitedHealth, Humana Inc. and Cigna Corp. CI, -3.67% have fallen substantially in the year to date.

Health-care facilities and managed care companies could face “temporary downside risk,” analysts at J.P. Morgan said in a Wednesday note to clients. Health-care services company HCA Healthcare Inc. HCA, -2.07% shares have fallen 11% in the year to date, though Tanquilut of Jefferies called the sell-off “overdone.”

Earlier this month, Walgreens stock plummeted 12% after the company reported second-quarter earnings that missed expectations, while lowering its full-year outlook. At the time, Chief Executive Stefano Pessina called the period “the most difficult quarter we have had since the formation of Walgreens Boots Alliance,” citing declining generic drug prices and lower reimbursements from payers.

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