In this article, we will look at the 11 Cheap Pharmaceutical Stocks to Buy Now.
The White House announced on Thursday that President Trump sent 17 major pharmaceutical companies letters delineating the steps they should take to decrease the prices of US prescription drugs to “most favored nation” (MFN) levels by September 29.
CNBC reported on August 1 that the ultimatum sent pharma companies “scrambling to respond” as President Trump demanded “binding commitments” to bring drug prices down, adding that if the companies “refuse to step up,” the government would not refrain from employing every tool in its “arsenal to protect American families from continued abusive drug pricing practices.” The government, however, did not declare what these measures might be.
The 17 major pharma companies that received letters included Amgen, AbbVie, AstraZeneca, Eli Lilly, Boehringer Ingelheim, Bristol-Myers Squibb, EMD Serono, Roche’s subsidiary Genentech, GSK, Merck, Pfizer, Gilead, Johnson & Johnson, Novo Nordisk, Novartis, Sanofi, and Regeneron.
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President Trump also informed the companies that they must provide MFN prices to all Medicaid patients, which is the American health program for low-income patients. In addition, the companies were told to refrain from offering medicines to developed markets at better prices compared to those offered in the US.
The pharma companies were also told that they should sell the medications directly to American patients, eliminating the pharmacy middlemen known as pharmacy benefit managers (PBMs).
Commenting on the situation, analysts led by Seiji Wakao told clients in a note:
“While the government’s latest announcement may appear harsh, we think it is likely that the matter is being discussed to some extent between the companies and the government, and we believe no changes that would have a significant negative impact on pharmaceutical companies will occur in the short term.”
JPMorgan analysts also released a note on Friday, stating that although the fresh ultimatum was delivered as a stark warning, pharma companies may get some time to respond due to the ongoing talks with the US administration.
With these trends in view, let’s look at the top cheap pharmaceutical stocks to buy now.
A technician recording data from a complex experiment involving pharmaceutical products.
Our Methodology
We used Finviz to make a list of pharmaceutical stocks with a forward P/E less than 15 and selected the top 11 with the highest number of hedge fund holders as of Q1 2025. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund holders.
Note: All data was sourced on August 2.
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 Cheap Pharmaceutical Stocks to Buy Now
11. Novartis AG (NYSE:NVS)
Forward P/E: 12.64
Number of Hedge Fund Holders: 33
Novartis AG (NYSE:NVS) is one of the top cheap pharmaceutical stocks to buy now. In a report released on August 1, Florent Cespedes from Bernstein maintained a Buy rating on Novartis AG (NYSE:NVS) with a price target of CHF108.00.
The rating update followed Novartis AG’s (NYSE:NVS) release of fiscal Q2 2025 results on July 17, reflecting a strong quarter with core operating income growth and double-digital sales.
Novartis AG (NYSE:NVS) reported $14.1 billion in net sales for the quarter, with volume contributing 12 percentage points to growth.
Operating income rose to $4.9 billion, primarily driven by higher net sales. Net income also grew to $4.0 billion, attributed to higher operating income.
Novartis AG (NYSE:NVS) further reported that core operating income margin was 42.2% of net sales, growing 2.6 percentage points.
Headquartered in Basel, Switzerland, Novartis AG (NYSE:NVS) develops, markets, and manufactures a range of healthcare products. Its operations span the Innovative Medicines, Sandoz, and Corporate segments.
10. United Therapeutics Corporation (NASDAQ:UTHR)
Forward P/E: 9.71
Number of Hedge Fund Holders: 43
United Therapeutics Corporation (NASDAQ:UTHR) is one of the top cheap pharmaceutical stocks to buy now. H.C. Wainwright analyst Andrew Fein reiterated a Buy rating on United Therapeutics Corporation (NASDAQ:UTHR) on July 31, lowering the associated price target to $400 from $425.
The analyst based the optimistic rating on the company’s potential market opportunities and ongoing clinical trials.
He stated that the TETON trials are expected to provide notable data that may result in regulatory approval and subsequent market launch by 2027. The TETON trials are evaluating the use of nebulized Tyvaso for idiopathic pulmonary fibrosis (IPF).
Fein added that the trials are built on promising findings from the INCREASE trial, which exhibited significant improvements in lung function among IPF patients. Tyvaso also has the potential to address a considerable unmet need in the IPF market, supporting the optimistic outlook.
United Therapeutics Corporation (NASDAQ:UTHR) is a biotechnology company that develops and commercializes products for patients with chronic and life-threatening conditions. Its product portfolio includes Adcirca, Orenitram, Remodulin, TYVASO, and Unituxin.