Health care stocks have been under pressure lately, amid profit taking in the context of talk of drug pricing reform. We think both the selling and worries about potentially drastic policy change are overdone, asserts Genia Turanova, editor of Leeb Income Performance.

The large pharma denizens of the high-yield model portfolio -- Eli Lilly (LLY), Bristol-Myers Squibb (BMY) and Merck (MRK) — boast strong drug portfolios and are at the forefront of drug research.

All three have attractive assets, including products in the pipeline. Innovative drugs tend to demand stronger price protection, and an easier or even accelerated approval process from the FDA and other regulatory agencies.

An argument that high pricing helps the large pharma cover their research costs still stands. The R&D budget of Bristol-Myers in 2015 was $4.04 billion, for instance, while Merck spent $6.6 billion and Lilly, $4.8 billion.

Lilly is especially interesting for its diabetes franchise, as well as for its oncology and immunology drugs.

Bristol-Myers Squibb is especially attractive thanks to its leadership position in immunoncology, and Merck has a slew of cancer, Hepatitis C and heart drugs.

While Bristol-Myers Squibb is the most expensive of the three, the higher multiple on the shares reflect the higher growth expectations.

On the other hand, while Merck trades at a lower P/E than the overall market and its growth prospects are actually improving.

This make the shares attractive at current levels as well. We also think Eli Lilly, with its high dividend yield, is an attractive stock at current levels.

Subscribe to Leeb Income Performance here…

 By Genia Turanova, Editor of Leeb Income Performance

 More from MoneyShow.com:

Allergan: Life After Pfizer?

AstraZeneca: A Healthy Pipeline

Merck: All-Weather Choice