Shares of Gilead Sciences (GILD.O) climbed 3% on Friday after the U.S. Supreme Court upheld a federal mandate requiring health insurers to provide preventive care services — such as HIV prevention and cancer screenings — at no additional cost to patients. The ruling preserves key provisions of the Affordable Care Act (Obamacare) and supports access to critical health services.
At the centre of the case was a challenge to the structure of the U.S. Preventive Services Task Force (USPSTF), which identifies what preventive services must be covered by insurers at no cost. A lower court had ruled that the USPSTF’s structure was unconstitutional, arguing that its members were appointed without Senate confirmation. However, in a 6–3 decision, the Supreme Court reversed that ruling, preserving the task force’s authority.
The decision is seen as a win for healthcare companies that rely on broad insurance coverage for their preventive products. Gilead, Merck (MRK.N), and GSK (GSK.L), all of which develop HIV prevention medications, stand to benefit from continued no-cost access to pre-exposure prophylaxis (PrEP) drugs.
Daina Graybosch, an analyst at Leerink Partners, said the ruling “helps refocus attention on commercial execution” and preserves a meaningful growth driver for companies like Gilead. Gilead’s HIV portfolio, which includes its popular PrEP drug Descovy, generated $4.6 billion in sales in the most recent quarter, contributing to $6.6 billion in overall revenue.
Gilead also recently received FDA approval for Yeztugo, its highly anticipated, twice-yearly injectable HIV prevention drug. Morningstar analyst Karen Andersen said the Supreme Court’s decision “reaffirms a foundation” for HIV prevention coverage, which should support investor confidence in the product’s commercial outlook.
Meanwhile, shares of Exact Sciences (EXAS.O) — which makes cancer screening tests — surged 6.3% to $55.07 following the ruling, with analysts saying the court decision removes a key regulatory overhang. Peer Guardant Health (GH.O) also rose nearly 2%.
Despite the positive market reaction, some experts warned of potential future uncertainty. Mitchell Warren, executive director of AIDS nonprofit AVAC, called the ruling “a relief” but noted the Health and Human Services Secretary still holds significant influence over the makeup of task forces like the USPSTF, raising concerns about long-term policy stability.
Reuters/s.s