“I’m going to bring down drug prices. I don’t like what’s happened with drug prices,” President-elect Donald Trump said in an interview with Time posted on the magazine’s website today.
So much, the stock market has concluded today, for the idea that a President Trump would be friendlier than a President Clinton to the drug industry.
Stocks of the big drug makers are down this morning with Pfizer (PFE) down 2.6% as of 11 a.m. New York time, and Merck (MRK) off 2.16%. As usual the biotech sector has taken the news harder with the iShares NASDAQ Biotech ETF (IBB) dropping 3.92%.
As usual with one of the President-elect’s cryptic comments in an interview or via a Tweet, his transition team had no comment on the interview. Is there a policy lurking out there on drug prices? Who knows.
What investors do know is that “doing something” about rising drug prices is a popular political issue with politicians of both parties. Senator John McCain, Republican, and Representative Elijah Cummings, Democrat, for example, have both proposed legislation that would restrict price increases by drug makers.
Investors should also note, however, that many Republicans have opposed legislation that would put the Federal government’s vast purchasing power to work to restrain drug prices by allowing Medicare to negotiate drug prices with drug makers. Among the most prominent opponents of that effort–Representative Tom Price of Georgia, Trump’s nominee to run the Department of Health and Human Services.