Pharmaceutical stocks plummet after a yesterday’s press conference for President-elect Donald Trump.
President-elect Donald J. Trump held a press conference yesterday in which he briefly discussed drug prices, a topic that is concerning for many Americans.
Trump began the press conference by stating that the drug industry is “disastrous,” citing that these companies sell their products in the United States, but are manufacturing them in different countries. He also expressed interest in creating new bidding processes for the drug industry to drive down costs.
“They’re getting away with murder,” Trump said during the press conference.
Although the United States is the largest purchaser of drugs for of the majority of these companies, there is an extremely limited bidding procedure. Trump has said he will implement a procedure that he speculates will save billions, although specifics have been lacking.
Currently, Medicare is not legally allowed to negotiate the prices they pay for drugs. This means that pharmaceutical companies set the prices, and Medicare has relatively no choice but to accept them, which is something that both Trump and outgoing President Barack Obama oppose.
Trump had previously expressed interest in lowering drug prices in the Time article when he was named Person of the Year. The pharmaceutical industry took a hit from that comment, reflected in a 3% to 5% drop in stocks.
That was not the first time the pharmaceutical industry’s shares were influenced by Trump. Only a day after the election, biotechnology stocks increased 9% in response to Hillary Clinton losing the election, according to the TIME article.
Throughout her campaign, Clinton vowed to reduce drug costs, and go after pharmaceutical companies charging high prices for their drugs. Her firm stance against these companies made Trump an ideal candidate for pharma.
However, Trump may be just as threatening to pharmaceutical companies, even he did not disclose drug pricing as an issue he was interested in changing.
Due to the comments made in the press conference, pharmaceutical stocks responded once more, this time even more dramatically than after the Time article was published.
According to Fortune, pharmaceutical stocks plummeted, and the companies lost more than $24.6 billion within 20 minutes of his comments. Big name companies such as Johnson and Johnson, Pfizer, Merck, Amgen, AbbVie, Bristol-Myers Squibb, Gilead, Celgene, and Eli Lilly all experienced immediate losses.
Shares of these companies dropped significantly, with losses ranging from 1.61% to 5.5%. However, despite losses yesterday, Merck, Celgene, and Eli Lilly have managed to make it back into the green, according to The Nasdaq Stock Market.
These companies once felt their fate was safe with Trump winning the election, but as time goes on, more statements against these companies and their prices have influenced stock prices. The immediate future of pharmaceutical companies is uncertain until specifics of how Trump will confront drug pricing are revealed, and this uncertainty is reflected in tumultuous stock fluctuations.