Biotech stocks weather the post-election market wobbles
This confidence boost comes as a response to news that the Republican party will control both the White House and Capitol Hill, and the belief that Trump and the Republican Congress will be more lenient on the industry’s pricing practices than Hillary Clinton would have been.
As well as the Nasdaq boost, individual pharmaceutical stocks also rallied, with Pfizer and Merck up 7% and 6% at market close. European pharmaceutical companies Roche, Sanofi, and Novo Nordisk A/S each experienced a 4% or more increase in foreign markets.
“The market has fretted about the prospect of a Clinton presidency and what that may mean for drug pricing,” British investment manager Neil Woodford wrote in a blog post on Wednesday. “Now the outcome is known, the prospect of drug pricing legislation is off the agenda.”
Trump has publicly opposed the healthcare reforms put in place by his predecessor, President Obama, promising to rip up Obamacare “from day one.” However, TheStreet columnist Adam Feuerstein has pointed out on Twitter that this would be “bad for drug sales, forget about prices.”
Trump has argued against high drug prices in the past, and is in favour of Medicare negotiating drug prices – both areas of policy where he and Clinton agree. The latter will be key in the development of the 21st Century Cures Act, a bill that aims to improve drug development pathways and could provide much needed clarity on laboratory developed tests.