Sunday 22nd October, 2017
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Trump's tweet sends pharma stocks down

Trump's tweet sends pharma stocks down

President Donald Trump jumped back into the debate over drug pric­ing on Tuesday, sending pharmaceutical stocks down again with a tweet promising to lower medicine costs for American people.

In a tweet shortly before 9 a.m. New York time, Trump said he’s working on a “new system where there will be competition in the drug in­dustry.”

Mylan NV, the maker of the EpiPen allergy shot that was at the centre of the pub­lic outrage over drug prices last year, declined 1.5 per­cent to $43.36 at 12:18 p.m. in New York, while Perrigo Co. dropped 2.5 percent and Allergan Plc fell 1.5 percent.

Trump sent his tweet the morning after House Repub­licans unveiled their long-awaited legislation to repeal and replace the Affordable Care Act lateMonday, which he also touted Tuesday, add­ing that competition will come later in the health-care rollout.

“We are intrigued by the timing of President Trump’s tweet this morning as it fol­lowed rapidly behind the House health-care reform bill, and we believe shows the administration’s contin­ued focus on drug pricing,” Vamil Divan, an analyst at Credit Suisse AG, said in a note to clients.

The 25-member Standard & Poor’s 500 Pharmaceuti­cals, Biotechnology & Life Sciences Index dropped as much as 1.3 percent, the most since Jan. 11, when Trump said the pharmaceutical in­dustry is “getting away with murder.” The president has promised to lower drug costs multiple times -- and threat­ened to use the government’s buying power to force prices down -- but so far has not un­veiled any specifics about how to do so.

The Tuesday tweet left an­alysts struggling to figure out what the president meant, es­pecially because Trump has alluded to bidding in the past. Unlike most countries in the world, the U.S. doesn’t direct­ly regulate medicine prices, and drugmakers have strong­ly resisted it.