Key Takeaways:

• Large pharmaceutical companies are entering a period of renewed relevance as therapeutic innovation accelerates, particularly through peptide-based medicines like GLP-1s.
• AI is becoming an important tool in early-stage drug discovery, helping major pharma companies improve pipeline efficiency as they approach significant patent expirations.
• Shifts in patient behavior, drug distribution, and pricing transparency are creating new opportunities for large pharma.

Why Are Investors Re-Evaluating Large Pharmaceutical Companies?

Pharma is sitting in an interesting spot right now. It is a sector many investors think they already understand, yet the forces shaping it today look very different from what shaped it even a few years ago. While attention has been focused on AI and other high-growth themes, the largest pharmaceutical companies have been moving into a period that may offer more long term opportunity than the market currently reflects.

GLP-1 Therapies Are Changing the Pharma Investment Landscape

A major reason interest is returning to pharma is the shift occurring in therapeutic innovation. The rise of peptide-based medicines, particularly GLP-1 therapies, has highlighted how treatment approaches for metabolic and cardiometabolic disease are evolving. These products have reset expectations around what large scale drug platforms can look like and have helped reestablish pharma as a source of meaningful medical advances. Their continued development may create a broader foundation for future growth as companies refine formulations, explore new indications, and expand access. This renewed focus on metabolic health reinforces the relevance of the established global drug makers that form the core of PPH.

GLP-1 Adoption Has Increased Most Rapidly Among Middle-Aged U.S. Adults

CHART 1 : Source: NCHS, CDC as of August 2025

What Role Does AI Play in the Future of Drug Pipelines?

AI is also becoming an important part of the story as the industry prepares for notable patent expirations over the next several years. Many of the largest pharma companies are integrating AI into early-stage research to streamline target discovery, accelerate molecule design, and reduce the number of unsuccessful paths that historically slow pipeline development. If these tools help improve efficiency in the 0 to 1 phase, companies may be able to refresh their pipelines more consistently and respond more effectively to the natural turnover created by patents expiring on legacy products. AI does not remove the complexity of drug development, but it may provide a way to generate and evaluate new candidates at a faster pace. This potential to backfill future pipelines supports a more constructive long-term outlook for the established names represented in PPH.

Forecasted Market Growth for Global AI Drug Discovery (2023-2032)

Source: Market.us, as of October, 2023. Past performance is no guarantee of future results. Not intended as a forecast or prediction of future results. For illustrative purposes only.

Shifts in Consumer Health Behavior

At the same time, the broader healthcare landscape is shifting. Patients are increasingly taking a more active role in managing chronic conditions, supported by telemedicine, home diagnostics, and direct to consumer platforms. This movement toward self-directed care has encouraged several large pharmaceutical companies to explore new ways of connecting with patients, improving education, and simplifying the path to treatment. These efforts may help reduce friction for individuals who are managing long term conditions and may strengthen engagement with established therapies. For companies with scale and recognized brands, this environment can create opportunities to support chronic disease management more effectively.

Evolving Drug Distribution and Pricing Dynamics

With this shift in active health management there is also continued scrutiny of traditional drug distribution and pricing structures. As policymakers, employers, and consumers call for more transparency, parts of the system are beginning to shift toward clearer pricing models and more direct channels. Large pharmaceutical companies are paying close attention to these developments and are testing ways to work more efficiently within an evolving framework. Greater clarity around the path from manufacturer to patient may help smooth access, reduce certain bottlenecks, and allow companies to communicate value more directly. For the established pharma names, this environment may support more stable relationships with patients and providers as the industry adapts to new expectations.

Why Pharma May Be Entering an Opportunistic Phase

These developments create a backdrop that appears more constructive for pharma than recent sentiment suggests. The large, liquid pharma companies have the scale, clinical expertise, and global reach to participate meaningfully in the next generation of therapeutic innovation, including the expansion of peptide-based medicines. AI assisted drug discovery may also help these firms refresh pipelines more efficiently at a time when the industry is preparing for notable patent expirations. Their established commercial networks allow them to adapt to shifting consumer behavior and new access models that are emerging across healthcare. As distribution and pricing structures evolve, these companies may also find clearer pathways to reach patients and communicate value. Taken together, this environment positions major pharma as a segment that could play a more important long-term role than current market attention implies.

Patent Expiration Risk for Total Worldwide Drug RX Revenues 2025-2030

Source: Statista, as of May, 2025. Past performance is no guarantee of future results. Not intended as a forecast or prediction of future results. For illustrative purposes only.

What makes PPH different from broader healthcare ETFs?

The VanEck Pharmaceutical ETF, PPH is built to capture this part of the industry in a clean and focused way. It concentrates on the largest and most liquid pharmaceutical companies and stops there. It does not broaden into biotech or early-stage science, which helps keep the exposure tied directly to established global drug makers with scale, diversified revenue streams, and proven commercial capabilities. This purity is a key differentiator, giving investors a straightforward way to access pharma without diluting the exposure with businesses that behave differently.

Top 10 Holdings in VanEck Pharmaceutical ETF (PPH)

Source: Factset as of 11/28/2025. Not intended as a recommendation to buy or sell any names mentioned herein. Fund holdings may vary. Visit vaneck.com/pph for complete holdings information.

Why Does PPH Matter in Today’s Pharma Landscape?

Pharma’s story traditionally centers around scale, reliability, and steady medical progress. With new therapeutic platforms emerging and AI reshaping early research, that story is entering a different rhythm. Innovation is beginning to move faster, pipelines are evolving, and the largest global drug makers are positioned at the center of this shift.

For investors looking to engage with the future of established healthcare, VanEck’s Pharmaceutical ETF (PPH) offers a focused way to do so. The fund provides targeted exposure to the world’s leading pharmaceutical companies, reflecting the firms driving advancements in metabolic health, next generation drug development, and AI supported research. By tracking the MVIS US Listed Pharmaceutical 25 Index, PPH captures the performance of major pharma companies that continue to shape treatment standards across global healthcare systems.

To receive more Thematic Investing insights, sign up in our subscription center.