Healthcare stocks and top healthcare ETFs rallied Friday after President Donald Trump vowed to end to “global freeloading” that has allowed foreign countries to pay less on American-manufactured medicines.
The Health Care Select Sector SPDR (NYSEArca: XLV), the largest healthcare exchange traded fund, gained 1.5% Friday while the iShares Nasdaq Biotechnology ETF (NASDAQGM: IBB), the largest biotech exchange traded fund by assets, rose 2.7% and VanEck Vectors Generic Drugs ETF (NasdaqGM: GNRX), which focuses on generic drug producers, added 2.2%.
Among the best performers on Friday, the ALPS Medical Breakthroughs ETF (NYSEArca: SBIO) gained 3.0%, PowerShares Dynamic Pharmaceuticals Portfolio (NYSEArca: PJP) increased 2.9% and SPDR S&P Biotech ETF (NYSEArca: XBI) climbed 2.9%.
Adding to the momentum in the healthcare sector, President Trump unveiled his administration’s plan to lower prescription drug prices and pledged to end global freeloading that has allowed foreign buyers to pay less for drugs, Fox reports.
“America will not be cheated any longer, and especially will not be cheated by foreign countries,” Trump said Friday in a Rose Garden address.
Michael Cohick, ETF product manager at VanEck, told ETF Trends the news supported its original premise regarding the space.
“We see the generic drug segment of the larger pharmaceutical industry as a growing and distinct opportunity set that investors can access using our ETF,” Cohick said.