Health and Human Services Secretary Robert F. Kennedy Jr. announced on Monday plans to “retire” all 17 members of the Advisory Committee on Immunization Practices (ACIP), a key government panel of vaccine advisors that advises the Centers for Disease Control and Prevention, stating that:
“A clean sweep is needed to re-establish public confidence in vaccine science.”
On June 10, NBC News medical analyst Dr. Vin Gupta appeared on CNBC’s ‘Money Movers’ to talk about RFK Jr. ousting CDC vaccine advisers, stating that it is likely to be significant for patients. He reasoned that there are several open questions regarding the decision, since historically, in the United States, the advisory committee has been looked to for guidance on immunization practices to establish what insurance companies, particularly commercial payers, will cover. This includes, in particular, vaccine regimens, new shots, and other similar treatments.
He thus stated that in such circumstances, the question arises as to who will replace the 17 experts in various healthcare domains, and if there is going to be a shift in guidance, what would that mean in terms of access to certain vaccines? Dr. Gupta expressed worry over such a shift materializing, as people would potentially see a change in what insurance will and will not cover.
With these trends in view, let’s look at the best drug stocks to buy according to hedge funds.
A closeup of a doctor’s hands preparing a dosage of a cardiovascular medicine.
Our Methodology
We used the Finviz stock screener to compile a list of the top 11 drug stocks most popular among elite hedge funds. The hedge fund data was sourced from Insider Monkey’s database, which tracks the moves of over 1000 elite money managers. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q1 2025.
Note: All data was sourced on June 12.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
11 Best Drug Stocks to Buy According to Hedge Funds
11. Sanofi (NASDAQ:SNY)
Number of Hedge Fund Holders: 27
Sanofi (NASDAQ:SNY) is one of the 11 Best Drug Stocks to Buy According to Hedge Funds. Berenberg Bank analyst Luisa Hector maintained a Buy rating on Sanofi (NASDAQ:SNY) on June 12, setting a price target of €118.00.
The rating followed the company’s presentation at the Goldman Sachs 46th Annual Global Healthcare Conference on June 10, highlighting various growth drivers within Specialty Care that bring an optimistic light to its operations.
Brian Foard, Head of Specialty Care at Sanofi (NASDAQ:SNY), stated that the product dupilumab is expected to undergo double-digit CAGR growth between 2023 and 2030, delivering an estimated EUR 22 billion by the end of the forecast period.
He said that Sanofi’s (NASDAQ:SNY) recently launched assets, such as ALTUVIIIO and Qfitlia, further add to this positive outlook. This also includes SARCLISA, the first FDA-approved treatment for adults with newly diagnosed multiple myeloma, which is continuing to expand its indications from both oncology and multiple myeloma perspectives.
The company thus presented a growth story at the conference, including in neurology, where it anticipates a reentry into the MS space through the upcoming launch of tolebrutinib.
Sanofi (NASDAQ:SNY) ranks 11th on our list of the best drug stocks to buy according to hedge funds. It researches, produces, and distributes pharmaceutical products. The company’s operations are divided into the Pharmaceuticals, Consumer Healthcare, and Vaccines segments.
10. Novartis AG (NYSE:NVS)
Number of Hedge Fund Holders: 33
Novartis AG (NYSE:NVS) is one of the 11 Best Drug Stocks to Buy According to Hedge Funds. On June 12, Berenberg Bank analyst Luisa Hector maintained a Hold rating on Novartis AG (NYSE:NVS) and set a price target of CHF89.00.
The same day, the company reported statistically significant improvements in the Phase IIIB APPULSE-PNH study. The study demonstrated clinically meaningful improvements in hemoglobin (Hb) levels of 2.01 g/dL on average in adult patients with paroxysmal nocturnal hemoglobinuria (PNH) who switched to Fabhalta.
None of the patients treated with Fabhalta required transfusions, experienced major adverse vascular events during the treatment period, or experienced breakthrough hemolysis (BTH).
Novartis AG (NYSE:NVS) develops, manufactures, and markets healthcare products. The company operates through the Innovative Medicines, Sandoz, and Corporate segments. It is the tenth-best drug stock to invest in now and is headquartered in Basel, Switzerland.
9. Novo Nordisk A/S (NYSE:NVO)
Number of Hedge Fund Holders: 60
Novo Nordisk A/S (NYSE:NVO) is one of the 11 Best Drug Stocks to Buy According to Hedge Funds. Bernstein analyst Florent Cespedes maintained a Hold rating on Novo Nordisk A/S (NYSE:NVO) on June 12 and set a price target of DKK620.00. The rating follows the company’s announcement on June 10 that it will release new data from its metabolic and cardiovascular health portfolio at the upcoming American Diabetes Association (ADA) 85th Scientific Sessions taking place in Chicago between 20th and 23rd June.
The presentation will include trials on the weight loss efficacy of higher dose Wegovy® in people with obesity and those with obesity and type 2 diabetes. The data will also provide further evidence of semaglutide’s broader cardiovascular and kidney health benefits for individuals with type 2 diabetes.
The analyst is thus maintaining a cautious stance on the stock. Novo Nordisk A/S (NYSE:NVO) is a global healthcare company that develops, discovers, manufactures, and markets pharmaceutical products. It specializes in diabetes care, with operations divided into the biopharmaceuticals and diabetes and obesity care segments.
8. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 69
Bristol-Myers Squibb Company (NYSE:BMY) is one of the 11 Best Drug Stocks to Buy According to Hedge Funds. On June 11, Bristol-Myers Squibb Company (NYSE:BMY) announced positive data from the pivotal Phase 3 POETYK PsA-1 trial that investigated the safety and efficacy of Sotyktu in adults with active psoriatic arthritis (PsA) who did not previously receive treatment through a biologic disease-modifying antirheumatic drug (bDMARD). The trial met its primary endpoint, demonstrating that more patients treated with Sotyktu achieved an ACR20 response, or at least a 20% improvement in signs and symptoms of disease, compared to placebo at Week 16.
Sotyktu’s safety profile through 16 weeks of treatment remained consistent with previous reports throughout its clinical trials, including the Phase 3 POETYK PsA-2 trial and the Phase 3 moderate-to-severe plaque psoriasis (PsO) clinical trials.
Bristol-Myers Squibb Company (NYSE:BMY) is a biopharmaceutical company that discovers, develops, and delivers advanced medicines for serious diseases. Its medicines fall into various therapeutic classes, including hematology, oncology, cardiovascular, immunology, and neuroscience.
7. McKesson Corporation (NYSE:MCK)
Number of Hedge Fund Holders: 70
McKesson Corporation (NYSE:MCK) is one of the 11 Best Drug Stocks to Buy According to Hedge Funds. On June 11, analyst Michael Cherny of Leerink Partners maintained a Buy rating on McKesson Corporation (NYSE:MCK), retaining the price target of $785.00. The analyst based the rating on the company’s recent operational strength, which led to an increase in its EPS guidance.
McKesson Corporation (NYSE:MCK) reported earnings per diluted share of $10.01 in fiscal Q4 2025, reflecting a growth of $3.99. Adjusted earnings per diluted share in the quarter reached $10.12, with a notable growth of 64%.
The company provided optimistic guidance for fiscal 2026, with adjusted earnings per diluted share expected to be in the range of $36.75 to $37.55, indicating forecasted growth of 11% to 14% compared to the prior year.
The analyst viewed McKesson Corporation’s (NYSE:MCK) operational improvement across various segments as modestly positive, especially because it allows the company to mitigate concerns associated with unexpected tax issues that materialized in the previous fiscal year.
McKesson Corporation (NYSE:MCK) ranks seventh on our list of the best drug stocks to invest in now and distributes generic, branded, specialty, biosimilar, and over-the-counter pharmaceutical drugs through its US pharmaceutical segment. The company also operates through the Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International segments.
6. Gilead Sciences, Inc. (NASDAQ:GILD)
Number of Hedge Fund Holders: 79
Gilead Sciences, Inc. (NASDAQ:GILD) is one of the 11 Best Drug Stocks to Buy According to Hedge Funds. Goldman Sachs analyst Salveen Richter reiterated a Hold rating on Gilead Sciences, Inc. (NASDAQ:GILD) on June 10 with a price target of $100.00. The analyst based the rating on the company’s current developments and strategic positioning.
Richter acknowledged that Gilead Sciences, Inc.’s (NASDAQ:GILD) management reaffirmed its long-term strategy to hold a competitive leadership position in virology while simultaneously augmenting its operations into inflammation and oncology. The company’s strong cash flow and robust balance sheet support these optimistic initiatives. Still, the recent clinical hold on a key study on HIV treatment due to safety concerns brings uncertainty, according to the analyst. Management anticipates a delay of several quarters in the program, which supports the analyst’s cautious stance.
The analyst also reasoned that while Gilead Sciences, Inc. (NASDAQ:GILD) has a promising oncology segment, especially supported by recent data from the Trodelvy trials, the company is expected to face challenges due to the broader market dynamics. This includes international cost disparities and drug pricing policies.
Gilead Sciences, Inc. (NASDAQ:GILD) is a biotech company that advances medicines to prevent and treat serious diseases such as cancer, immunodeficiency virus (HIV), viral hepatitis, and COVID-19. Its portfolio of drugs focuses on medical areas with unmet needs and includes AmBisome, Atripla, Biktarvy, Cayston, Complera, and others. Gilead Sciences, Inc. (NASDAQ:GILD) operates in over 35 countries and is the sixth-best drug stock to invest in on our list.
5. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 93
Merck & Co., Inc. (NYSE:MRK) is one of the 11 Best Drug Stocks to Buy According to Hedge Funds. Analyst Asad Haider from Goldman Sachs maintained a Buy rating on Merck & Co., Inc. (NYSE:MRK) on June 11 with a $99.00 price target. The analyst supported the optimistic rating with the company’s ongoing initiatives and strategic positioning, stating that management is actively conducting constructive discussions with the administration about drug pricing. This reflects Merck & Co., Inc.’s (NYSE:MRK) proactive approach to addressing challenges in the industry, according to the analyst.
Haider considered this dialogue a positive step that could benefit both the company and the broader biopharma sector by attaining favorable outcomes. Merck & Co., Inc. (NYSE:MRK) thus ranks fifth on our list of the top drug stocks to invest in according to hedge funds.
The analyst also reasoned that Merck & Co., Inc. (NYSE:MRK) has a key focus on strategic business development and innovation, including potential M&As, lending it a strong position for future growth and supporting the Buy rating.
Merck & Co., Inc. (NYSE:MRK) is a biopharmaceutical company that delivers health solutions to advance the treatment and prevention of diseases in animals and people. Its Pharmaceutical segment offers vaccines and human health pharmaceutical products, which typically consist of therapeutic and preventive agents. Its Animal Health segment develops, discovers, manufactures, and markets a range of vaccines and veterinary pharmaceutical products.
4. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 99
Pfizer Inc. (NYSE:PFE) is one of the 11 Best Drug Stocks to Buy According to Hedge Funds. Analyst Asad Haider of Goldman Sachs maintained a Hold rating on Pfizer Inc. (NYSE:PFE) on June 11, retaining the price target of $27.00. The rating was based on the company’s strategic direction and current business environment.
The analyst stated that management is optimistic about the upcoming earnings and the benefits of recent strategic deals, especially in the PD1-VEGF bispecifics and ADC portfolio combinations. Despite these positive factors, uncertainties in the broader policy environment persist. This includes drug pricing, with ongoing discussions with the administration.
Haider further opined that although Pfizer Inc. (NYSE:PFE) has a clear focus on internal medicine and plans to engage in smaller M&A deals, the ongoing evolving pricing dynamics in the obesity and cardiometabolic sectors pose difficulties. The company’s focus on upholding its dividend as a capital allocation policy is another factor that justifies the Hold rating.
Pfizer Inc. (NYSE:PFE) is a global biopharmaceutical company that manufactures, develops, markets and sells biopharmaceutical products worldwide. The company takes the fourth spot on our list of the best drug stocks to invest in according to hedge funds. It advances wellness, prevention, treatment, and cures in developing and emerging markets.
3. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Number of Hedge Fund Holders: 106
Intuitive Surgical, Inc. (NASDAQ:ISRG) is one of the 11 Best Drug Stocks to Buy According to Hedge Funds. On June 10, William Blair analyst Brandon Vazquez maintained their bullish stance on Intuitive Surgical, Inc. (NASDAQ:ISRG), giving it a Buy rating. The analyst based the optimistic rating on the company’s present market position and future prospects.
Although concerns exist that remanufactured instruments may potentially impact growth, the analyst believes that the absence of third-party verification participation and the restricted availability of FDA-cleared remanufactured instruments are expected to hinder their widespread adoption.
He also reasoned that robotics programs are costly and often carry risks, which is why hospitals may be cautious about operating outside Intuitive Surgical, Inc.’s (NASDAQ:ISRG) ecosystem. This hesitant approach could deal with the effects of remanufacturing concerns on the company’s operations.
While the analyst acknowledges that there are risks that need to be monitored, Intuitive Surgical, Inc. (NASDAQ:ISRG) has solid overall fundamentals that support the optimistic rating. The company is the third best drug stock to buy now according to hedge funds.
Intuitive Surgical, Inc. (NASDAQ:ISRG) has an elaborate ecosystem of services and products that provides robotic-assisted surgical solutions and invasive care. Its products include the Ion Endoluminal and the Da Vinci Surgical systems.
2. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 119
Eli Lilly and Company (NYSE:LLY) is one of the 11 Best Drug Stocks to Buy According to Hedge Funds. Analyst Asad Haider from Goldman Sachs maintained a Buy rating on Eli Lilly and Company (NYSE:LLY) on June 11, keeping the price target at $883.00 and supporting the rating with several operational and strategic factors that lend LLY a favorable market position.
The analyst reasoned that Eli Lilly and Company (NYSE:LLY) has exhibited strong demand trends, especially in the incretin class. This coincides with its 2025 guidance and suggests solid growth potential. Management is also actively focusing on drug pricing negotiations with the administration and is undertaking efforts to bring out-of-pocket costs down for consumers.
Eli Lilly and Company’s (NYSE:LLY) business development strategy is another factor supporting the analyst’s positive rating, as it focuses on expansion in core therapeutic areas, emphasizing smaller, earlier-stage deals without disregarding larger opportunities. This strategic focus aligns with the company’s focus on growth and innovation, as does its interest in the PD1/L1xVEGF bispecific space.
Eli Lilly and Company (NYSE:LLY) develops, manufactures, discovers, and sells pharmaceutical products. These products span oncology, diabetes, immunology, neuroscience, and other therapies.
1. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 139
UnitedHealth Group Incorporated (NYSE:UNH) is one of the 11 Best Drug Stocks to Buy According to Hedge Funds. On June 11, Baird downgraded UnitedHealth Group Incorporated (NYSE:UNH) to Neutral from Outperform, bringing the price target to $312 from $356. The analyst told investors that dealing with the current Medicare Advantage risk-adjustment model, v28, “appears much more difficult than we previously expected.”
The analyst further said that the firm’s due diligence “cast enough doubt on OptumHealth to give us pause on the long-term story,” questioning if UnitedHealth Group Incorporated (NYSE:UNH) has “the necessary level of margin offsets heading into year three of v28 phase-in.”
UnitedHealth Group Incorporated (NYSE:UNH) provides healthcare coverage, data consultancy, and software services. It operates through the OptumRx, OptumInsight, OptumHealth, and UnitedHealthCare segments.
While we acknowledge the potential of UNH to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than UNH and that has 100x upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
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