Trump says pharma 'getting away with murder,' stocks slide
By Caroline Humer and Rodrigo Campos
NEW YORK (Reuters) - U.S. President-elect Donald Trump on Wednesday said pharmaceutical companies are "getting away with murder" in what they charge the government for medicines, and promised that would change, sending drugs stocks sharply lower.
The benchmark S&P 500 index .SPX slipped into negative territory after his remarks at a news conference spooked investors. The iShares Nasdaq Biotech ETF (IBB.O: Quote) dropped 4 percent at its session low and ended down 3 percent, its largest daily percentage drop in three months.
"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," said Brad Loncar, manager of the Loncar Cancer Immunotherapy ETF (CNCR.O: Quote). "When somebody that high profile says something that negative, people do not want to invest in it."
Trump has blasted other industries for charging the government too much, particularly defense companies, but has made only a few public statements about drug pricing since being elected. He briefly mentioned Lockheed Martin Corp (LMT.N: Quote), Ford Motor Co (F.N: Quote), and United Technologies Corp (UTX.N: Quote) during the news conference and promised a border tax for companies producing products for U.S. consumers outside the United States.
Back in May, then-candidate Trump said Amazon (AMZN.O: Quote) was also "getting away with murder," referring to taxes in that case. The stock fell as much as 4 percent in the next few days but is up almost 12 percent since Trump's remark.
PHARMA ON EDGE
After his promise to bring down drug spending, the ARCA pharmaceutical index gave up as much as 2.6 percent and ended the day down 1.7 percent. Continued...