A 21-word tweet from presidential candidate Hillary Clinton cut 5% off the value of US biotech stocks yesterday on investor fears of price controls.
Price gouging like this in the specialty drug market is outrageous. Tomorrow I’ll lay out a plan to take it on. -H https://t.co/9Z0Aw7aI6h
— Hillary Clinton (@HillaryClinton) September 21, 2015
The tweet sparked a sell-off for a number of biopharma companies including Biogen, Valeant, Alexion, and Horizon Pharma, down more than 9%.
Valeant fell 5.4% and is also in the sights of another Democratic presidential hopeful – Bernie Sanders – who recently tabled new legislation aimed at curbing the drugs bill. Sanders roundly criticised the company last month after it emerged it had hiked the prices of two cardiovascular drugs it has acquired from Marathon Pharmaceuticals.
According to press reports, the Canadian company introduced a 525% price increase for Isuprel (isoproterenol) – from around $215 to $1,346 per vial – and raised the price of Nitropress (sodium nitroprusside injection) to more than $800 from $257, an increase of over 200% on the day it acquired the two brands.
Horizon Pharma’s fall-off comes partly from its stuttering attempts to acquire Depomed, but the company has also been cast into the spotlight for introducing a near six-fold increase in the price of Vimovo (naproxen/esomeprazole magnesium), a pain drug acquired from AstraZeneca in 2013.
Biogen (down 5.6%) has been under scrutiny for its pricing policy for first-generation multiple sclerosis drug Avonex (interferon beta-1a), which is among a number of older MS drugs that have seen steep price increases despite the availability of newer therapies.
Alexion’s 3.6% fall stems from the fact that it sells the world’s most expensive drug – Soliris (eculizumab) for two ultra-rare diseases – which costs more than 500,000 a year. Meanwhile, the 2.5% fall for Gilead was to be expected given that it has attracted so much attention in the last couple of years for the price of its hepatitis C virus (HCV) therapies.
Clinton has an explicit pledge in her campaign manifesto to reduce the cost of prescription drugs, saying medicines spending accelerated from 2.5% in 2013 to 12.6% last year and claiming that “almost three-quarters of Americans believe prescription drug costs are unreasonable.”
Her tweet referred specifically to a New York Times article that focused on Daraprim (pyrimethamine) a 62-year-old drug for the parasitic infection toxoplasmosis acquired by Turing Pharmaceuticals last month. Since taking ownership of the drug, Turing has raised its price from $13.50 per tablet to $750.