Innovation has long been a keyword in the health care space, but since the onset of the global COVID-19 crisis we've witnessed an unprecedented acceleration in innovation across the sector. The scientific community has really come together to bring forth solutions that can help us better deal with the disease until a vaccine arrives.
Unsurprisingly, drug and vaccine development is generating the most excitement. This virus was unknown to us when the calendar turned to 2020, and the fact that we've reached the testing stage in under a year is no small feat. The speed at which we are developing medical, production, and distribution solutions is remarkable, and I think the momentum will remain long past the pandemic.
I expect tight supply conditions to persist as production ramps up, which may be awhile. Strong demand should boost companies up and down the therapeutics supply chain, especially those working with complex manufacturing processes and creating new infrastructure to support them.
For example, the processes involved in creating a COVID treatment using messenger RNA, or mRNA, are fundamentally different from traditional pharmaceuticals, vaccines, and biologics. Any success with a new and novel mRNA treatment for COVID could support drug candidates using the same technology in the future.
While US COVID-19 cases have risen precipitously since March—with new spikes as of November—innovations across the industry are helping us learn to manage under pandemic conditions. Back in February, we had zero tests for COVID-19, and today we have both the capacity and the infrastructure to test more than a million people every single day. This has given us the ability to monitor COVID-19 outbreaks more or less in real time, allowing businesses and schools in some parts of the country to reopen and remain open.
Companies within the diagnostic-testing supply chain also stand to benefit from durable demand. In particular, I'm bullish on the life sciences & tools group, the industry behind test and drug manufacturing. This is a consolidated industry with a narrow group of players and a large new-market opportunity.
Virtual health care represents another area where I see continued opportunity. Telemedicine has surged in popularity this year as more patients (and doctors ) are opting out of in-person visits. This new modality should increase access to our health care providers structurally into the future.
Aside from the surge in innovation, I expect the pandemic to spur government investment into the public health infrastructure, including pandemic preparedness, infectious disease awareness, and personal protective equipment. This should be another long-term positive for the health care sector.
Finally, with the US elections behind us, it appears unlikely that Congress will pass the most progressive heath care policy proposals in the next year. In addition, health care stocks look relatively inexpensive on a forward price-to-earnings (P/E) basis. These positives—along with the health care ecosystem's innovative nature that is helping us develop new drugs, devices, and business models—should help us not only get through the current COVID crisis but also provide opportunities in 2021 and beyond.
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