Fitch Ratings November 19, 2021

Fitch Ratings-Chicago/New York-19 November 2021: US healthcare and pharmaceutical companies have maintained solid credit metrics during the coronavirus pandemic, with 3Q21 results in line to slightly better than expected for most sub-sectors, says Fitch Ratings. However, the risk that some issuers’ margins may be pressured in the near term is increasing, as labor inflation and supply chain disruptions lead to higher costs and potentially lost revenue. A temporary decline in profitability is not typically a downgrade trigger, making negative rating actions unlikely, particularly given healthcare’s relatively inelastic demand and track record of defending profitability.

Healthcare providers across numerous settings are challenged by the scarcity of workers, which is driving wages higher and leading to greater use of more expensive temporary...

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