As the U.S. Treasury Department cracks down on so-called tax inversions, healthcare stocks and sector-related exchange traded funds are looking a little pale, with traders concerned about the outlook of large deals in the space.

The Health Care Select Sector SPDR (NYSEArca: XLV), which tracks the broad healthcare space, was down 0.4% Tuesday.

The U.S. Treasury Department intends to make it harder for U.S. companies to move their headquarters abroad as a way diminish taxes owed, or also known as inversion, Bloomberg reports.

More recently, inversions have occurred after large U.S. companies merged with smaller foreign firms. The U.S. company would reincorporate in a tax-friendlier country, like Ireland, while maintaining much of their core operations in the U.S.

“People are concerned that some of the froth in the market will decrease with lower prospect for larger deals,” John Carey, a fund manager at Pioneer Investment Management Inc., said in the Bloomberg article. “That’s affecting some specific stocks, particularly health care.”

For instance,, AbbVie (NYSE: ABBV), which agreed to acquire Dublin-based Shire (NasdaqGS: SPHG), fell 2.1% Tuesday. Medtronic (NYSE: MDT), which is negotiating to buy Irish medical supply company Covidien Plc (NYSE: COV), decreased 3.4%. Additionally, Abbot Laboratories (NYSE: ABT), which agreed to sell its generic drug business in developed markets to Mylan Inc (NasdaqGS: MYL) and form a new company incorporated in the Netherlands to diminish taxes, was down 1.5%. [Medical Device Marriage Could Lift This ETF]

XLV includes a 3.8% tilt toward ABBV, along with MDT 2.6%, ABT 2.2%, COV 1.7% and MYL 0.7%.