Trump: Drug Industry Is 'Getting Away With Murder'
Dozens of pharmaceutical shares spiked down Wednesday after President-elect Donald Trump alluded to potential tightening of industry regulation.
At his scheduled press conference, Trump said the pharmaceutical industry is “getting away with murder” in terms of product pricing. He asserted that “we need new bidding procedures.”
ETFs iShares NASDAQ Biotechnology Index (ETF) (NASDAQ: IBB) and SPDR S&P Biotech (NYSE: XBI) immediately plunged 2.6 percent and 3.3 percent, respectively. Direxion Daily S&P Biotech Bull 3X Shares (NYSE: LABU) fell 9.8 percent and Direxion Daily S&P Biotech Bear 3X Shares (NYSE: LABD) rose 9.7 percent.
Not The First Trump Tirade On Pharma
The Wednesday conference was the second occasion on which Trump has commented on the pharmaceutical industry. Earlier in December, he asserted a mission to “bring down drug prices.”
Shares were similarly shaken at the first mentioning.
Wall Street has been generally sensitive to pharmaceutical stocks since the beginning of the election period, when it reacted to speculations about Hillary Clinton’s platform for industry regulation. In August, Clinton’s comments denouncing high EpiPen prices were followed by an 18-percent drop in Mylan shares.
In September, after the New York Times published a report on drug prices mentioning Valeant Pharmaceuticals Intl Inc (NYSE: VRX), Clinton tweeted, “Price gouging like this in the specialty drug market is outrageous.” Valeant shares have steadily declined since.
Other pharmaceutical corporations suffered through the rest of the election as investors braced for a possible Clinton presidency and tightened industry regulations.
Image Credit: By Max Goldberg from USA (Trump CAUCUS) [CC BY 2.0], via Wikimedia Commons
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