Adding more color to an earlier post, President-elect Trump said in his first press conference that:
“We have to get our drug industry coming back. Our drug industry has been disastrous. They’re leaving left and right. They supply our drugs but they don’t make them here, to a large extent. And the other thing we have to do is create new bidding procedures with the drug industry. They’re getting away with murder. Pharma has a lot of lobbyists and a lot of power and there's very little bidding on drugs. We’re the largest buyer of drugs in the world, and yet we don’t bid properly. We’re going to start bidding. We’re going to save billions of dollars over a period of time.”
During the campaign, Mr. Trump commented that Medicare should have the right to negotiate drug prices, an issue the industry aggressively lobbied against.
With the tone of his rhetoric, pharma and biotech firms will never have a dull moment for the foreseeable future.
Donald Trump is in front of the media at his first formal press conference in six months.
The President-elect began the press conference by thanking Ford (NYSE:F) and Fiat Chrysler (NYSE:FCAU) for announcing investments in new U.S. plants, adding he hoped that General Motors (NYSE:GM) will follow. Alibaba (NYSE:BABA) is also mentioned as a company that will be doing "tremendous" things in the U.S.
There's an early warning from Trump to the drug industry (PJP, IHE, XPH, PPH) that new "bidding procedures" are needed.
Early questions are focused on Russia, hacking and U.S. intelligence. Investors wouldn't mind some clarity on trade and tax policies in the later round of questions.
The Mexican peso has nowhere to hide and is now down to an all-time low of 22.0333.
U.S. stocks have edged lower during the first part of the news conference. The S&P 500 Index is now down 0.17% after being slightly higher earlier.
The rally in pharma and biotech stocks has fizzled on the heels of President-elect Trump's comments this morning saying the drug industry is "getting away with murder" (regarding pricing) and that "we need new bidding procedures" for the drug industry.
Last year turned out to be a disappointing one for new drug approvals with the FDA clearing just 22 new medicines for sale, the lowest number since 2010 and sharply down on 2015's tally of 45.
Several factors led to the decline: Five new drugs that had been scheduled for approval in 2016 ended up winning an early green light at the end of 2015. There was also a decline in drugs being filed for approval and the FDA rejected or delayed more applications in 2016 than in the previous two years.
The healthcare sector - particularly pharmaceuticals and biotechs - had a rough session on Wednesday after the president-elect promised to bring down drug prices.
Sporting sizable gains yesterday afternoon and again this session, the sector has recovered all of Wednesday's slide and more.
Up 1.15% today, the XLV has joined the broader market in the green for the week, as has the IBB. The SPDR S&P Pharmaceuticals ETF (XPH +1.5%) is having the best day of all, but remains marginally lower on the week.
Apparently swayed by his conversation with the president this week, the president-elect says he likes at least some of the Affordable Care Act.
In his first interview since winning the election, Trump tells the WSJ he's a fan of the prohibition against insurers denying coverage because of pre-existing conditions, as well as a provision allowing parents to continue coverage for their children well into their 20s.
“I told [Obama] I will look at his suggestions, and out of respect, I will do that."
ABC News projects the Republicans will retain control of the House of Representatives.
Investors in the healthcare sector have been waiting on the election in order to gauge the likelihood of new legislation or gridlock. Earlier this week, Bloomberg assessed how the sector might react to the different scenarios from today's election.
Total spending on prescription drugs in the U.S. rose 12.2% to nearly $425B in 2015, continuing a steep climb fueled by the introduction of expensive new drugs for cancer and infections, as well as price hikes for older drugs.
The annual report from IMS Health is likely to further fuel the fire of criticism from politicians, healthcare providers, and patients, stating medicines are out of reach and straining budgets.
The average price of branded prescription drugs in the U.S. has doubled in the past five years, a finding that threatens to fuel the political backlash against high prices.
Express Scripts (NASDAQ:ESRX), the country's largest pharmacy group, said the average wholesale price of branded medicines, which are protected by patents, rose 16% last year and was up a total of 98% since 2011.
High drug costs have become a persistent theme in the current U.S. election campaigns, with both the Democratic and Republican frontrunners, Hillary Clinton and Donald Trump, pledging to crack down on elevated prices.
It's been a "remarkable turn" in relative performance, says Deutsche Bank's David Bianco, noting health care was about 1K basis points ahead of the S&P 500 as recently as mid-August, but both are now about flat and neck-and-neck year-to-date. "We find this reversal unwarranted and think health care could surge into year-end," says Bianco, and if the move doesn't come in 2015, it'll surely happen next year. As for valuation, health care is selling for 14.7x 2016E EPS vs. the S&P 500 at 16x - this even as health care's expected 6% sales growth should easily trump that of nominal GDP and the S&P 500. Biano sees 6-9% EPS growth, also better than the S&P.
Focus on the big picture, says Bianco: "We believe growth in health care products will stay strong owing to an aging population and increasing efforts to treat conditions with drugs and maximize the productivity of scarce healthcare labor with as many tools and conveniences as conceivable." He likes S&P 500 biotech, pharma, devices, equipment, supplies, tech, and tools, but is cautious on managed care and other healthcare services and facilities.
Getting out in front of what should be more bashing of their business models at the Democratic debate tonight, the healthcare names (XLV -1.3%) have about doubled the decline in the S&P 500. Within healthcare, it's the biotechs (IBB -3.1%) and pharmaceuticals (XPH -3.2%) leading the way south.
A sharply lower healthcare sector (XLV -3%) has dragged the S&P 500 (SPY -0.2%) into the red and the Nasdaq (NASDAQ:QQQ) down a full 1%. The Dow (DIA +0.4%) remains higher, courtesy of a post-earnings 9% moonshot in Nike.
Biotechs (IBB -5.7%) and Pharmaceuticals (XPH -5.9%) are hardest hit, continuing to feel the pressure from Hillary Clinton's assault on drug-pricing. Gilead (GILD -2.5%), Biogen (BIIB -3.5%), Celgene (CELG -5.4%), Amgen (AMGN -3.6%), Allergan (AGN -4%), Mylan (MYL -5.6%).
What's unusual about the dissovlable tablet is that it is manufactured via 3D printing, the first approved prescription medication made this way. The company employs the process to enable the delivery of high-dose medications in a rapidly disintegrating form, developed via its proprietary ZipDose Technology.