A total of £3.7bn was wiped off the value of the UK’s major drugs stocks after comments by presidential hopeful Hilary Clinton that hinted a crackdown on the major pharmas for what the Americans call price gouging.
On Wednesday the Democratic Party nominee hit out at Mylan NV (NASDAQ:MYL) via Twitter calling “outrageous” price hikes to the EpiPen, used to treat severe allergic reactions.
It is not the first time she has taken aim at the industry and analysts are increasingly fearful that if she makes it to the Whitehouse, Clinton will force through some swingeing price cuts in order to lower medical bills and prevent perceived profiteering.
Shire Plc (LON:SHP), which has a significant US franchise, was clobbered hardest at its shares fell 4%, wiping around £1.8bn from its value.
Hikma Pharmaceuticals PLC (LON:HIK) also slid 4%, while AstraZeneca PLC (LON:AZN) reversed 1.5%. Relatively unscathed was GlaxoSmithKline PLC (LON:GSK), which fell just 0.4%.
“Hilary Clinton’s attack on the price gouging of an allergy medicine is expected to continue to weigh on the healthcare sector,” said Jasper Lawler, analyst at CMC Markets.
“Her statements reaffirm a fear in the industry that a Clinton presidency would see a serious crackdown on pharmaceutical price gouging.”
Over in the States the Nasdaq Biotechnology Index fell 3.5% on Wednesday's following the Clinton Tweet.
Mylan closed down 5%, while a host of biggies, including Biogen Inc (NASDAQ:BIIB) and Celgene (NASDAQ:CELG), took a biffing.
RBC analyst Michael Yee, quoted on Bloomberg, said Clinton’s Tweet and earlier comments hinted at “more political risk around drug pricing”.
The former Secretary of State is known to want to cap costs, while pushing pharma companies to spend more on research.
She is also in favour of banning direct-to-consumer advertising.
Her rival for the White House has also weighed in on the debate.
Donald Trump said during the Republican primaries he would push for Medicare to be able to renegotiate drug price.
However he hasn’t rounded on individual companies in the way his rival has with Mylan and Valeant Pharmaceuticals (NYSE:VRX) before that.