Top Pharmaceutical Companies Shaping the Future of Healthcare

Key Takeaways:

• Aging populations and clearer U.S. drug pricing boost long-term pharma outlook.
• Leaders like Eli Lilly and Merck lead in GLP-1s, oncology, and pipeline strength.
• Strong cash flows and innovation make pharma a compelling core healthcare play.

Pharmaceuticals sit at the intersection of innovation and defensiveness, where pipelines turn science into cash flows and global demand adds resiliency. With policy clarity improving and investors rotating back to quality, the setup for large-cap pharma looks attractive.

Recent developments in U.S. drug pricing negotiations have reduced policy uncertainty, improving sentiment and driving a sector re-rating as valuations catch up to broader market levels.

Why Pharmaceuticals, Why Now

• Secular demand from aging populations and broader healthcare access remain durable growth drivers.
• The pace of FDA drug approvals has risen over the past decade, creating new sources of long-term revenue.
• Large pharmaceutical companies continue to pursue mergers and acquisitions to refresh pipelines and scale manufacturing.
• GLP-1 drugs have opened a multi-year growth opportunity in metabolic disease, with potential spillover into related therapeutic areas

PPH: Top 5 Holdings (as of 9/30/2025)

Eli Lilly and Company (LLY) – 19.89% weight

Eli Lilly continues to dominate the obesity and diabetes treatment space with its GLP-1 portfolio, driving investor enthusiasm and strong long-term sentiment. While the stock has seen periods of consolidation following a long stretch of outperformance, confidence remains high given its expanding late-stage pipeline and leadership in next-generation therapeutics.

Novartis AG (NVS) – 9.71% weight

Novartis has been one of the steadier performers in the large-cap space this year, supported by its ongoing transformation toward a pure-play innovative medicines company. Execution on cost efficiency, coupled with promising new therapies in oncology and cardiovascular disease, has strengthened its market positioning.

Novo Nordisk A/S (NVO) – 7.72% weight

Novo Nordisk remains central to the weight-loss drug narrative and continues to see strong global demand. After a period of sharp gains earlier in the year, the stock has moved sideways as investors digest capacity constraints and competitive headlines. However, long-term fundamentals remain intact as manufacturing ramps and new formulations approach the market.

Merck & Co., Inc. (MRK) – 7.43% weight

Merck has performed solidly, supported by its oncology leadership and the continued strength of Keytruda. The company’s investments in antibody-drug conjugates and vaccine platforms have positioned it to sustain growth beyond major patent expirations, making it a key anchor in the sector’s defensive appeal.

Pfizer Inc. (PFE) – 5.10% weight

Pfizer’s share price has stabilized as the company transitions from its pandemic-era revenue base toward a more diversified pipeline. Recent acquisitions and restructuring efforts have improved visibility, and sentiment has turned more constructive as investors refocus on long-term product launches and operational discipline.

What to Watch in Pharma

• Continued innovation and pipeline productivity
• Patent expirations and lifecycle management of major drugs
• Evolution of U.S. pricing frameworks and global reimbursement policies
• Expansion and competitive dynamics in the GLP-1 market
• Ongoing M&A activity and integration of newly acquired assets

Why Consider PPH Now

Pharmaceuticals are reasserting themselves as a core allocation within healthcare, offering a rare blend of defensive characteristics and innovation-driven growth. The sector’s strong balance sheets, resilient cash flows, and improving policy backdrop create an appealing setup in an uncertain macro environment.

VanEck’s Pharmaceutical ETF (PPH) provides investors with targeted exposure to the world’s leading pharmaceutical companies, capturing the innovation and stability that defines the space. By focusing on established global players with deep pipelines and proven earnings power, PPH offers a practical way to participate in the next phase of healthcare advancement.