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How Did the Presidential Debate Affect Life Science Stocks?
Drug pricing has been a hot campaign topic but the nominees said very little on the subject during the debate.
Healthcare stocks on the S&P 500 fell more than one percent just prior to the presidential debate—a sure sign of investor unease. The sector hasalready been hit hard by the campaign, which may explain why some investors seem skittish. (Consider Hillary Clinton’s tweet about price gouging, which sent biotech and pharmaceutical stocks plummeting!)
But interestingly, drug-pricing did not come up in the debate on September 26, 2016—despite being a hot topic in the months prior. Here’s what each candidate has said on the subject … plus the scoop on how Monday shook down.
Donald Trump on drug pricing
The Republican nominee has denounced the power drug companies currently hold in the United States. He’s critical of the fact that they can sell their products to the government without any kind of competitive bidding, which would bring down expenses.
To that end, Trump has been vocal about his belief that pharmaceuticals manufactured abroad should be sold domestically. He has also insisted that Medicare be empowered to negotiate drug prices, a belief his opponent shares—but not, generally speaking, his party.
“Trump is defying Republican dogma,” physician Charles D. Rosen wrote for Stat, “but he’s honestly and forthrightly calling Big Pharma on its Big Baloney.” Douglas Holtz-Eakin, former policy director for John McCain’s campaign, put it more diplomatically: “He’s an extremely innovative Republican. Let’s just leave it at that,” he told Stat.
Hillary Clinton on drug pricing
The Democratic nominee became the face of this issue during the Turing Pharmaceuticals scandal. Her tweet—“Price gouging like this in a specialty drug market is outrageous. Tomorrow I’ll lay out a plan to take it on”—was followed by sharp drops in pharmaceutical and biotech stocks. In fact, the NASDAQ Biotechnology Index plummeted 4.7 percent.
What does that plan entail? Clinton also advocates for Medicare bargaining power. She too supports bringing in drugs manufactured abroad, allowing Americans access to cheaper treatments still proven to be safe. And she wants to penalize drug companies for making unreasonable price hikes. Her plan includes a series of fines that will make drug companies accountable for their pricing decisions.
“It would represent a serious shift in Washington’s relationship with the pharmaceutical business,” Jordan Weissman explained in Slate, labelling the whole plan “quietly bold.”