Prescription drugs are expensive. Whether you’re buying something to rid you of that awful sinus infection or trying not to die from anaphylactic shock, you’re going to have to pony up if you want your meds.
Many politicians agree that drug prices are way too high for the average American. Former presidential candidate Hillary Clinton even included the regulation of the prescription drug industry in her campaign platform, which had the pharmaceutical industry scared in case she won and really cut into their bottom line.
Fortunately for them, she didn’t. Pharmaceutical stocks performed rather well since president-elect Donald Trump won the 2016 election, as they no longer had to fear regulation and subsequent decrease of profits.
Yet after a preset conference on January 11th, prescription drug companies might have someone else to fear: president-elect Donald Trump.
During a press conference, Trump spoke out against absurd practices by pharmaceutical companies in the U.S.
This caused investors in the pharmaceutical industry to panic.
The NASDAQ Biotechnology Index, a stock index measuring the biotech/pharmaceutical industry, is currently down by 3.35% (as is $IBB, the ETF following this index). Conversely, the index was doing relatively well following Trump’s election. This means that investors in these companies panicked in the moment and demand in the pharmaceutical industry decreased.
If you own stocks in pharmaceutical and biotech companies, should you be worried? Investors don’t know whether or not Trump’s statement means he’ll crack down on prescription drug prices. If he does and it proves to make drugs cost less, then it’ll undoubtedly cut into the bottom line of these companies. If he’s unable to impact the price of drugs in any way or neglects to follow up on his statement, then companies should not be effected.
If you take prescription drugs, would your drugs cost less? If Trump follows through with his promise to encourage bidding and curtail influence in Washington from Big Pharma, then patients could potentially see a decrease in how much they pay. If he doesn’t, however, you could see the same prices you’re seeing now, if not higher.