If you’re on team Hillary Clinton in the upcoming presidential election, you might want to trim down exposure to biotechnology stocks and sector-related exchange traded funds.
“Price gouging like this in the specialty drug market is outrageous. Tomorrow I’ll lay out a plan to take it on,” Democratic presidential candidate Hillary Clinton tweeted Monday, referring to a recent New York Times report that outlined price hikes on specialized drugs.
Clinton’s remarks triggered a sell-off in the healthcare sector, with biotechnology names leading the fall. For instance, the ALPS Medical Breakthroughs ETF (NYSEArca: SBIO), which focuses on small- and mid-cap companies that have one or more drugs in either Phase II or Phase III U.S. FDA clinical trials, plunged 5.6% Monday while the BioShares Biotechnology Clinical Trials Fund (NasdaqGM: BBC), which tracks potential up-and-coming biotechnology companies that are in the clinical trials stage, plummeted 6.8%.
Additionally, the SPDR S&P Biotech ETF (NYSEArca: XBI), which tracks an equal-weight index of biotechnology companies and focuses on smaller biotech names, declined 4.8% Monday. The iShares Nasdaq Biotechnology ETF (NasdaqGS: IBB), the largest biotech ETF by assets, decreased 4.3%.
The sector fall out occurred after Clinton responded to reports about how Turing Pharmaceuticals LLC acquired an old antibiotic drug, Daraprim, and raised the price to $750 a tablet from $13.5, or more than 50-fold, reports Drew Armstrong for Bloomberg.
Clinton may be hinting at the potential changes as part of a group health proposal, which she proposed Sunday on “Face the Nation” where she voiced several ideas on health care.
“I’m going to address them this week, starting with how we’re going to try to control the cost of skyrocketing prescription drugs,” Clinton said on the televised show. “It’s something that I hear about wherever I go. It’s part of the plan I will be rolling out in the next few days.”