Australia’s healthcare and pharmacy sectors are poised for significant gains following Labor’s decisive federal election victory and the rollout of major policy initiatives.
With the Albanese government committing $8.5 billion to Medicare and $690 million over four years to reduce Pharmaceutical Benefits Scheme (PBS) medicine costs, select ASX 200 stocks are positioned to benefit from these sweeping reforms.
Medicare Expansion: Boost for Healthcare Providers
Labor’s flagship Medicare expansion aims for 90% of all GP visits to be bulk billed by 2030, representing the largest investment in Medicare since its inception.
This policy is expected to drive a surge in patient volumes, as more Australians access affordable primary care. Analysts from Macquarie Group and MST Financial highlight several ASX 200 healthcare stocks set to gain:
- Healius Ltd (ASX: HLS): As a major pathology and diagnostics provider, Healius stands to benefit from increased GP referrals and higher test volumes. The company is focused on expanding its pathology operations and leveraging automation and digital solutions to improve margins and reduce costs. Recent strategy updates indicate Healius is targeting significant cost efficiencies and margin expansion, positioning it well for the anticipated rise in demand.
- Sonic Healthcare Ltd (ASX: SHL): With a broad footprint in pathology and medical diagnostics, Sonic is well placed to capture higher patient volumes driven by expanded Medicare funding.
- Australian Clinical Labs Ltd (ASX: ACL): ACL, earning almost all its revenue from Medicare-funded pathology services, is expected to see direct benefits from increased bulk billing and patient throughput, especially in regions where it has an established presence.
- Integral Diagnostics Ltd (ASX: IDX): The company’s diagnostic imaging services are set to benefit from Medicare indexation and expanded MRI licensing, which will make more services eligible for Medicare funding and boost referral volumes.
Pharmaceutical Benefits Scheme: Tailwinds for Pharmacies
Labor’s $690 million plan to reduce PBS medicine costs is expected to provide a direct boost to pharmacy operators. The policy will lower the cost of medicines for consumers and increase government payments to pharmacies. Key beneficiaries include:
- Sigma Healthcare Ltd (ASX: SIG): Sigma, a leading pharmacy distributor, is positioned to benefit from increased PBS volumes and a recently secured five-year supply contract with Chemist Warehouse. The company’s operational scale and efficiency initiatives are expected to drive further growth, even as PBS price reforms present ongoing margin challenges. Sigma’s recent merger approval and expanded distribution network strengthen its market position.
- Other Pharmacy Operators: Broader industry changes, including increased government payments for dispensing and special allowances for regional and rural pharmacies, will support pharmacy profitability and service expansion.
Additional Sectors: Construction and Mining
Beyond healthcare, Labor’s $10 billion housing plan and $7.3 billion energy transition strategy are set to benefit construction and mining stocks such as Mirvac Group (ASX: MGR), Stockland Corp Ltd (ASX: SGP), Rio Tinto Ltd (ASX: RIO), and South32 Ltd (ASX: S32).
These initiatives will drive demand for new housing and incentivize green energy investments, providing further opportunities for ASX 200 companies.