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President-elect Trump has reiterated his plans to take on rising drug prices.
“I’m going to bring down drug prices. I don’t like what has happened with drug prices.”
Call it the quote heard around the world. In an interview with TIME magazine, “Person of the Year” Donald Trump reiterated his intention to tackle rising pharmaceutical prices. And in response, the market plummeted.
In the article, Trump does not go into detail on how he’ll bring down drug prices—indeed, that single comment is all he has to say on the subject. Still, it was enough to trigger a major sell-off on December 7, 2016.
The SPDR S&P Biotech index (NYSEARCA:XBI) fell 4.02 percent yesterday and the iShares NASDAQ Biotechnology index (NASDAQ:IBB) dropped 2.94 percent. The pharmaceutical sector also saw losses: the SPDR S&P Pharmaceuticals index (NYSEARCA:XPH) fell just over two percent on Wednesday.
Both the biotech and pharmaceutical sectors had enjoyed a brief rally following the results of November’s presidential election. Investors seemed to feel that Trump was safer for these markets than Clinton, who was more vocal about her plans to take on pharmaceutical price gouging and who famously sent out a $132 billion tweet.
But Trump did speak out against drug prices while on the campaign trail, as Life Science Investing News has previously reported. Perhaps most famously, he was in favor of reimporting prescription drugs to foster an environment of competitive bidding.
Trump also supported Medicare’s right to negotiate prices, noting that the power could “save $300 billion a year.”
“We don’t do it,” he reportedly told an audience in New Hampshire. “Why? Because of the drug companies.”
This new TIME article suggests Trump hasn’t retreated from plans to tackle pharmaceutical prices. Still, there’s been no word on what exactly those plans will look like. The big drug companies—and their shareholders—are undoubtedly eager for clarity on this issue, especially as we head into a new year.
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Securities Disclosure: I, Chelsea Pratt, hold no direct investment interest in any company mentioned in this article.
