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Trump's Tweet Hits Pharma Stocks, Promises Decreased Drug Prices
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A President Donald Trump tweet promising to increase competition and decrease prices in the drug industry sent pharmaceutical stocks falling on Tuesday.
I am working on a new system where there will be competition in the Drug Industry. Pricing for the American people will come way down!
Immediately following the news, shares of Pfizer (PFE - Free Report) and Merck & Co (MRK - Free Report) fell 1.1% while Amgen Inc (AMGN) took a 1.4% hit. Also, the NYSE Arca Biotechnology Index slumped 1% at the start of trading.
This is not the first time President Trump has ridiculed the drug industry for high prices on prescription medication. A week before his inauguration, President Trump tweeted that pharmaceutical companies are “getting away with murder”; within 20 minutes of the tweet, nearly $25 billion vanished from the S&P 500’s top nine pharmaceutical companies.
Adding uncertainty is the lack of additional information available about the “new system”. Historically, drug makers have refused government regulation as the United States is one of the few countries in the world where drug pricing regulation is absent.
Especially in the past two years, pharmaceutical companies have felt pressure regarding government regulation. With life saving drugs experiencing enormous price increases, such as the EpiPen made by Mylan , which now costs 500% more to carry, politicians on all ends of the spectrum are looking to find solutions; steep prices increase health insurance premiums and thin consumers’ wallets.
Geoffrey Yu, head of the U.K. Investment office of UBS Wealth Management, said to “continue to expect the unexpected”.
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Trump's Tweet Hits Pharma Stocks, Promises Decreased Drug Prices
A President Donald Trump tweet promising to increase competition and decrease prices in the drug industry sent pharmaceutical stocks falling on Tuesday.
Immediately following the news, shares of Pfizer (PFE - Free Report) and Merck & Co (MRK - Free Report) fell 1.1% while Amgen Inc (AMGN) took a 1.4% hit. Also, the NYSE Arca Biotechnology Index slumped 1% at the start of trading.
This is not the first time President Trump has ridiculed the drug industry for high prices on prescription medication. A week before his inauguration, President Trump tweeted that pharmaceutical companies are “getting away with murder”; within 20 minutes of the tweet, nearly $25 billion vanished from the S&P 500’s top nine pharmaceutical companies.
Adding uncertainty is the lack of additional information available about the “new system”. Historically, drug makers have refused government regulation as the United States is one of the few countries in the world where drug pricing regulation is absent.
Especially in the past two years, pharmaceutical companies have felt pressure regarding government regulation. With life saving drugs experiencing enormous price increases, such as the EpiPen made by Mylan , which now costs 500% more to carry, politicians on all ends of the spectrum are looking to find solutions; steep prices increase health insurance premiums and thin consumers’ wallets.
Geoffrey Yu, head of the U.K. Investment office of UBS Wealth Management, said to “continue to expect the unexpected”.
Long-Term Buys You Won't See in the News
The stocks you see in today's headlines may not be in the news tomorrow or next week. If you're looking for profitable long-term investments, you may be interested to see what Zacks Research is recommending to our private members. These moves have double and triple-digit profit potential. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this exclusive information? Click here>>