While some goods and services sometimes fall out of style as a result of technological innovations or other factors, that's exceedingly unlikely to happen to medical services anytime soon, not unless we develop an all-purpose drug that can cure all illnesses.

Until that day, companies in the healthcare sector that can stay ahead of the curve will continue to thrive. Such corporations can deliver excellent returns to their shareholders along the way.

Let's look at three strong candidates along those lines: Veeva Systems (VEEV 1.10%), Exact Sciences (EXAS -1.04%), and Novo Nordisk (NVO -0.56%). Here's why these three stocks can be excellent winners over the long run. 

1. Veeva Systems

Veeva Systems offers cloud-based software solutions to businesses. Although this market is competitive, the company made its name by targeting the life sciences industry. It stands as one of the leaders in this small niche of the cloud sector thanks to having constructed various offerings that are tailor-made for its clients. In other words, Veeva Systems is a specialist, not a generalist. 

One great thing about Veeva's business is that it benefits from a competitive advantage. Its clients rely on its cloud-based solutions to store data, improve productivity and efficiency, and ensure legal compliance in a highly regulated industry. Switching to a competitor comes with risks -- business disruption, loss of data, and more -- granting Veeva Systems' platform high switching costs.

The company usually records retention rates above 100%. That strongly suggests that Veeva Systems can continue growing, especially as it is making headway into a total addressable market (TAM) worth over $13 billion. In the second quarter of its fiscal 2023 (ended July 31), the company reported revenue of $534.2 million, up 17% compared to the year-ago period.

Veeva's revenue growth rates dropped recently, a key reason its shares have lagged behind the market over the past year.

Chart showing fall in Veeva's quarterly YoY revenue growth since 2020.

VEEV Revenue (Quarterly YoY Growth) data by YCharts

Still, the company recorded $2 billion in revenue over the trailing 12 months, a fraction of its TAM. Veeva Systems' adjusted net income in its Q2 2023 came in at $166.2 million, representing a 9% year-over-year increase. Veeva's opportunities will only increase along with the expanding life sciences industry, which is currently worth $2 trillion.

That -- combined with its competitive edge -- is why Veeva Systems remains in a solid position to provide strong returns to shareholders for years to come. 

2. Exact Sciences 

Exact Sciences markets products that help detect cancer as early as possible, improving patients' chances of survival. The company's best-known product is Cologuard, which tests for early stage colorectal cancer for patients 45 and older at average risk of the disease -- that is, those with no family history or some other factor that increases their chances of developing it. 

Exact Sciences has been aggressively marketing Cologuard. That's partly because screening for colorectal cancer remains well below what it should be. Colorectal cancer is among the leading causes of cancer death in the world. Its five-year survival rate is 65% -- but that's an average. If diagnosed in the early stages of the disease, the survival rate is 91%. But if it has spread to surrounding organs, it drops to 72%.

It further declines to a paltry 15% if the disease has spread to distant parts of the body. Unfortunately, only 37% of cases are diagnosed in the early stages, meaning plenty of eligible patients aren't getting screened. Orders of Exact Sciences' Cologuard peaked in 2019 and dropped during the pandemic. They have yet to recover fully.

What's more, Exact Sciences is developing other products, including an improved version of Cologuard and other tests for the detection of multiple early stage cancers. The company sees a TAM of $58 billion across all the markets it is targeting.

Exact Sciences recorded revenue of $523.1 million in the third quarter, a 15% increase compared to the year-ago period. The healthcare company remains unprofitable, posting a net loss of $148.8 million in the period, slightly better than the net loss of $166.9 million reported in the prior-year quarter. The red ink on the bottom line partly explains why investors have sold off the stock lately.

But with a revenue guidance of around $2 billion for its fiscal 2022, Exact Sciences also has plenty of room to grow its top and bottom lines. Patient investors will benefit as Exact Sciences makes progress in helping fight cancer. 

3. Novo Nordisk 

Novo Nordisk is a well-established pharmaceutical company based in Denmark. The drugmaker has made it a habit to develop innovative medicines that help patients with diabetes, one of the key reasons it's one of the longtime leaders in this therapeutic area. Novo Nordisk held a 31.6% share of the diabetes drug market as of August, an increase of almost 2 percentage points year over year.

The company is still looking to make groundbreaking progress in helping manage diabetes, and it is currently developing a potential, once-weekly insulin option called Icodec. The company has announced excellent results from clinical trials for this product and plans to issue regulatory submissions next year. Diabetes patients who take insulin typically have to do so daily. For that reason, a once-a-week option could be highly successful. 

Novo Nordisk does have a rich pipeline with plenty of other programs. The company is also looking to diversify its lineup with candidates targeting therapeutic areas, including oncology, rare diseases, neurological disorders such as Alzheimer's disease, and more. Of Novo Nordisk's 12 programs in phase 3 studies, seven do not target diabetes or obesity.

In the next few years, the company should earn important approvals in its core therapeutic area and elsewhere. Meanwhile, Novo Nordisk continues to record solid revenue, profits, and free cash flow. In the first nine months of the year, the company reported 128.9 billion Danish kroner (DKK) -- or $17.9 billion -- representing a 26% year-over-year increase.

Novo Nordisk's net profit of 41.9 billion DKK ($5.8 billion) jumped by 14% compared to the year-ago period, while its free cash flow grew by 19% year over year to 62.5 billion DKK ($8.7 billion). Novo Nordisk's proven ability to develop innovative medicines, and its consistent revenue and earnings growth, make it an excellent healthcare stock to buy and hold for a while.