Healthcare’s Wild Week: What UnitedHealth’s Crash and GSK’s Deal Mean for Investors

Sophia Reyes · May 15, 2025 1:13 PM

If you’ve been watching the healthcare sector lately, you know it’s been anything but stable. From a stunning CEO exit at UnitedHealth to a $2 billion pharma deal that could reshape GSK’s future, this past week has been packed with the kind of headlines that make investors either sweat – or sprint for opportunity.

Let’s unpack what just happened, why the market reacted the way it did, and what it might mean for anyone holding (or avoiding) healthcare stocks right now.

UnitedHealth Just Had Its Worst Month in Years

Let’s start with the big one. UnitedHealth Group UNH+1.28% – the largest health insurance company in the U.S. – is in crisis mode. On Tuesday, the company shocked Wall Street by announcing the abrupt resignation of CEO Andrew Witty, pulling its 2025 earnings forecast, and revealing that medical costs were rising way faster than expected.

That combination triggered an investor meltdown. The stock cratered almost 18% in one session and has now plunged nearly 47% from its recent highs. That’s not a typo. For a giant blue-chip name like UnitedHealth, that kind of drop is massive.

But it didn’t stop there.

Shortly after the financial bombshell, reports surfaced that the Department of Justice is investigating UnitedHealth’s Medicare Advantage practices. That added a whole new layer of risk – legal exposure – and further spooked already jittery investors.

This is a textbook example of what happens when multiple red flags go up at once: a leadership vacuum, financial uncertainty, and regulatory heat. It’s the kind of triple threat that makes even long-term holders hit the sell button.

Ripple Effects: Who Else Took a Hit?

Naturally, when a giant like UnitedHealth takes a nosedive, investors start asking: Is this just a UNH problem – or is the whole sector in trouble?

Other insurers like Humana HUM+0.68% and CVS Health CVS+0.71% did feel some fallout, with their stocks sliding modestly. But Wall Street analysts are already suggesting that UnitedHealth’s issues – especially the cost overruns in its Medicare plans – might be more company-specific than systemic. Translation: the whole sector isn’t necessarily broken, but UNH definitely has some explaining to do.

That said, investor confidence in healthcare took a noticeable hit. Sector-wide ETFs like the Healthcare Select Sector SPDR (XLV) have been under pressure, as traders rotate money into flashier sectors like AI and semiconductors.

Then GSK Dropped a $2 Billion Surprise

While UnitedHealth was busy burning down billions in market cap, over in the UK, GlaxoSmithKline GSK–1.06% made a very different kind of headline – one that’s all about building.

GSK announced a $2 billion acquisition deal to buy efimosfermin, a liver disease drug being developed by Boston Pharmaceuticals. This isn’t just a one-off drug play – it’s part of a broader strategy. GSK says it plans to launch up to 14 new products by 2031, and this deal is a key piece of that puzzle.

What’s cool here is that efimosfermin isn’t just another experimental compound. It’s shown promising results in treating NASH (non-alcoholic steatohepatitis), a liver condition with growing global prevalence and very few effective treatments.

So while the U.S. healthcare scene was dealing with leadership drama and legal panic, GSK was out here making growth moves – exactly the kind of confidence-building behavior investors like to see.

Pharma Winners Still Exist

Despite the recent chaos, not all healthcare names are struggling.

Eli Lilly LLY+1.00%, for example, continues to defy gravity, largely thanks to its booming weight-loss drug business and aggressive push into genetic therapies. It’s quietly become one of the sector’s biggest success stories – and proof that healthcare isn’t all doom and gloom.

Even in the pharma space, which took a hit this year from drug pricing fears and political noise, selectivity is paying off. Companies with real innovation, strong pipelines, and a clear strategy for growth are still attracting capital. GSK’s acquisition and Eli Lilly’s rise highlight a growing divide between healthcare laggards and leaders.

What This Means for Investors

So, what should you take away from all of this?

1. Don’t panic – but do reassess. If you hold UnitedHealth, this is a good time to look hard at your reasons for staying in. Regulatory risk, cost unpredictability, and leadership turnover aren’t short-term hiccups – they’re structural issues. That said, panic selling at a 47% discount rarely ends well.
2. Look for smart, strategic players. GSK’s move is a signal that some healthcare firms are playing offense, not defense. In a shaky sector, that confidence – and investment in the future – matters more than ever.
3. Watch Washington. The DOJ probe into UnitedHealth could signal broader scrutiny of Medicare Advantage plans. If more names get dragged in, expect more volatility across insurers.
4. Stay diversified. As we saw this week, one stock can crash 18% in a day while another rallies on a growth bet. That’s why putting all your healthcare eggs in one basket is risky business.
5. Healthcare isn’t dead – but it’s complicated. The sector still offers innovation, defensive value, and long-term growth. But it’s no longer a “safe bet.” You’ll need to be more selective and more tuned in to policy shifts than ever before.

Final Thoughts

The last few days reminded us that healthcare is just as susceptible to drama, risk, and surprise as tech or crypto. From boardroom shakeups to billion-dollar acquisitions, the sector is moving fast – and investors who pay attention can still find real opportunity.

Just don’t forget your seatbelt. The ride isn’t over yet.