Friday, January 13, 2017

Trump Wipes $24.6 Bln Off Drug and Biotech Stocks in 20 Minutes


(Kristian Rouz) During his press conference on Wednesday, the US President-elect Donald Trump said US medicines are made overseas and are too expensive, and proper bidding could help lower the costs, provoking a selloff in big pharma and biotech stocks.




Source - The Event Chronicle

by Kristian Rouz, January 12th, 2016

US big pharma suffered a major hit during Wednesday’s press conference of the President-elect Donald Trump, who blasted drugmakers for making their product overseas and subsequently importing it, and vowed to introduce proper bidding procedures in order to curb drug prices and “save billions.”

Biotech and drugmaker stocks slumped in the immediate aftermath of these remarks, reflecting the market perception of the big pharma as artificially overpriced. Pharmaceutical and biotech equities crashed on Wednesday after President-elect Donald Trump blasted the “big pharma” lobbying practices as artificially driving prices and supporting vicious foreign trade patterns.
“They’re getting away with murder,” Trump said. “Pharma has a lot of lobbyists and a lot of power and there is very little bidding. We’re the largest buyer of drugs in the world and yet we don’t bid properly and we’re going to save billions of dollars.”
The US government, Trump said, is paying much more for medicines than the open market price would be, therefore, transparent bidding is vital in order to counter the powerful pharma lobbies. Subsequently, the market sentiment shifted toward expectations of lower biotech and drug industry premiums down the road, resulting in a selloff in related stocks.
“Our drug industry has been disastrous, they’re leaving left and right,” Trump said. “They supply our drugs but they don”t make them here, to a large extent.” Obamacare, Trump said, must be repealed and replaced “essentially simultaneously.”
The iShares Nasdaq Biotech exchange-traded fund (ETF) plunged 4pc in its biggest one-day decline in three months. S&P Pharmaceuticals, Biotechnology & Life Sciences Index dipped 1.7pc “When the president-elect says we’re going to negotiate drug pricing, you have to take that seriously, but at the same this is a complicated issue because there’s not going to be clarity on drug pricing reform anytime soon,” Brad Loncar of the Loncar Cancer Immunotherapy ETF said. “When somebody that high profile says something that negative, people do not want to invest in it.”

Initially, when Trump was still a candidate for the US presidency, he was perceived as pharma industry champion, and his most recent remarks align him with Congress Democrats in a way, who, however, tend to favour tougher administrative regulation rather than proper and transparent competitive bidding. Trump might have become disgruntled with select industries doing business with the US government most recently because of high costs of their services to US taxpayers, and President-elect is committed to cut the expenses of the federal government as part of his fiscal strategy.




During the 20 minutes of Trump’s press conference, big pharma lost some $24.6 bln out of its aggregate market value of $906.8 bln.

In particular, equities of Celgene dropped 3.5pc on Wednesday afternoon; Johnson & Johnson retreated 1.61pc; Bristol-Myers dropped 5.5pc; Pfizer declined by 2.75pc; Amgen slid 2.27pc; AbbVie lost 4.2pc; Gilead shed 2.3pc; and Eli Lilly tumbled 2.6pc.

Shares of the Kenilworth, NJ-based Merck & Co., Inc were surprisingly up 1.67pc because of the news of the Food and Drug Administration having decided to speed up their review of Merck’s proposed lung-cancer medicine.

Previously, Trump criticised defence enterprises for overcharging the US government, including the highly publicised story focusing on Air Force One, dubbed by Trump as “too expensive.” During the press conference on Wednesday, Trump mentioned Lockheed Martin, Ford, and United Technologies amongst the companies whose business practices are harmful to the US economic interests, mainly, in the form of consumer goods being produced overseas and subsequently imported into the US.

The drug industry, on its part, has greatly benefitted from the Obamacare reform, which attracted more funds out of Americans’ pockets into the sphere of medical services. The bloated budget spending of the past eight years has also resulted in significant redistribution of wealth towards the well-connected Washington lobbies, with pharma being among the biggest.

Despite his critical stance on the issue of drug prices, and the cautious support from the Democrats, including the now-again-independent Bernie Sanders, Trump is still seen by big pharma as good news. The S&P Biotech Index is still 9pc above its election day level.
“We look forward to working with the new administration and Congress to advance proactive, practical solutions to improve the marketplace and make it more responsive to the needs of patients,” Stephen Ubl of Washington-based Pharmaceutical Research and Manufacturers of America (PhRMA) said.
Source: Sputnik News
_________________________
Stillness in the Storm Editor's note: Did you find a spelling error or grammar mistake? Do you think this article needs a correction or update? Or do you just have some feedback? Send us an email at sitsshow@gmail.comThank you for reading.
________________________________________________________________
Question -- What is the goal of this website? Why do we share different sources of information that sometimes conflicts or might even be considered disinformation? 
Answer -- The primary goal of Stillness in the Storm is to help all people become better truth-seekers in a real-time boots-on-the-ground fashion. This is for the purpose of learning to think critically, discovering the truth from within—not just believing things blindly because it came from an "authority" or credible source. Instead of telling you what the truth is, we share information from many sources so that you can discern it for yourself. We focus on teaching you the tools to become your own authority on the truth, gaining self-mastery, sovereignty, and freedom in the process. We want each of you to become your own leaders and masters of personal discernment, and as such, all information should be vetted, analyzed and discerned at a personal level. We also encourage you to discuss your thoughts in the comments section of this site to engage in a group discernment process. 

"It is the mark of an educated mind to be able to entertain a thought without accepting it." – Aristotle

The opinions expressed in this article do not necessarily reflect the views Stillness in the Storm, the authors who contribute to it, or those who follow it. 

View and Share our Images
Curious about Stillness in the Storm? 
See our About this blog - Contact Us page.

If it was not for the gallant support of readers, we could not devote so much energy into continuing this blog. We greatly appreciate any support you provide!

We hope you benefit from this not-for-profit site 

It takes hours of work every day to maintain, write, edit, research, illustrate and publish this blog. We have been greatly empowered by our search for the truth, and the work of other researchers. We hope our efforts 
to give back, with this website, helps others in gaining 
knowledge, liberation and empowerment.

"There are only two mistakes one can make along the road to truth; 
not going all the way, and not starting." — Buddha

If you find our work of value, consider making a Contribution.
This website is supported by readers like you. 

[Click on Image below to Contribute]

Support Stillness in the Storm