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Expand chart
Data: FactSet; Chart: Axios Visuals

Health care industry earnings fell 18% in the third quarter of this year, compared with the same period in 2018, due in part to the costs associated with opioids litigation, according to the Axios tracker of almost 170 health care companies.

Yes, but: The industry still churned out a 6.1% profit margin, and health care stocks are at the highest they've been all year because Wall Street foresees a very profitable election year.

The big picture: Earlier this year, when health care profits were at record highs, Wall Street was bearish because algorithms and traders were triggered at the thought of "Medicare for All" and drug pricing reforms.

  • Now, even as profits slump a bit, Wall Street is buying into an industry that has helped kill legislation that would've tackled egregious billing practices and secretive contracting, scored potential repeals of the Affordable Care Act's taxes, and neutered most drug pricing proposals.

By the numbers: Executives and shareholders of pharmaceutical companies continue to reap enormous rewards.

  • Approximately two-thirds of all third-quarter profits flowed to drug companies, even though they generated less than 20% of global revenue, according to our analysis, which does not include early-stage biotechs.
  • All of our other analyses of industry finances have showed this same theme.

The intrigue: Cardinal Health, a major drug and device distributor, dragged down the industry's profit margin by almost a full percentage point after it booked a $5.6 billion pre-tax charge for any future opioid settlement.

  • The opioid litigation will be very expensive for the companies involved, with settlements likely hitting tens of billions of dollars, but the industry as a whole wouldn't crumble.

Hospitals also recorded lower bottom lines, as their cumulative net margin dropped from about 7% in the third quarter of 2018 to 3% this year, according to the financial results of 48 not-for-profit systems analyzed by Axios.

Go deeper

2 hours ago - World

Map: A look at world population density in 3D

This fascinating map is made by Alasdair Rae of Sheffield, England, a former professor of urban studies who is the founder of Automatic Knowledge. It shows world population density in 3D.

Details: "No land is shown on the map, only the locations where people actually live. ... The higher the spike, the more people live in an area. Where there are no spikes, there are no people (e.g. you can clearly identify ... the Sahara Desert)."

Biden's Day 1 challenges: The immigration reset

Illustration: Aïda Amer/Axios

President-elect Biden has an aggressive Day 1 immigration agenda that relies heavily on executive actions to undo President Trump's crackdown.

Why it matters: It's not that easy. Trump issued more than 400 executive actions on immigration. Advocates are fired up. The Supreme Court could threaten the Deferred Action for Childhood Arrivals (DACA) program, and experts warn there could be another surge at the border.

12 hours ago - Sports

Broncos and 49ers the latest NFL teams impacted by coronavirus crisis

From left, Denver Broncos quarterbacks Drew Lock, Brett Rypien and Jeff Driskel during an August training session at UCHealth Training Center in Englewood, Colorado. Photo: Justin Edmonds/Getty Images

The COVID-19 pandemic has thrown the NFL season into chaos, with all Denver Broncos quarterbacks sidelined, the San Francisco 49ers left without a home or practice ground and much of the Baltimore Ravens team unavailable, per AP.

Driving the news: The Broncos confirmed in a statement Saturday night that quarterbacks Drew Lock, Brett Rypien and Blake Bortles were identified as "high-risk COVID-19 close contacts" and will follow the NFL's mandatory five-day quarantine, making them ineligible for Sunday's game against New Orleans.