Impact of Major Health Events on Pharmaceutical Stocks: A Comprehensive Analysis Using Macroeconomic and Market Indicators

TL;DR

This paper analyzes how major health events since 2000 have affected pharmaceutical stocks, using macroeconomic and market indicators to understand stock performance patterns during crises.

Contribution

It offers a comprehensive analysis of the effects of thirteen major health events on pharmaceutical stocks, incorporating macroeconomic and market indicators with temporal detail.

Findings

Distinct stock performance patterns identified during health crises

Market reactions vary at event start, peak, and end

Macro indicators influence stock responses

Abstract

This study investigates the impact of significant health events on pharmaceutical stock performance, employing a comprehensive analysis incorporating macroeconomic and market indicators. Using Ordinary Least Squares (OLS) regression, we evaluate the effects of thirteen major health events since 2000, including the Anthrax attacks, SARS outbreak, H1N1 pandemic, and COVID-19 pandemic, on the pharmaceutical sector. The analysis covers different phases of each event beginning, peak, and ending to capture their temporal influence on stock prices. Our findings reveal distinct patterns in stock performance, driven by market reactions to the initial news, peak impact, and eventual resolution of these crises. We also examine scenarios with and without key macroeconomic (MA) and market (MI) indicators to isolate their contributions. This detailed examination provides valuable insights for investors, policymakers, and stakeholders in understanding the interplay between major health events and health market dynamics, guiding better decision-making during future health related disruptions.