In her tweet, Clinton called the action “price gouging” and noted that she was going to offer up a plan soon to fight on this problem.
It looks like the straight-shooting team here at ValueWalk are not the only ones upset with Martin Shrekli’s ongoing effort to gouge needy AIDS and cancer patients by increasing the price of a drug he just acquired by 5000% (50-fold).
In the moments following Clinton’s tweet at 10:56 a.m. (1456 GMT), shares of many biotech companies turned down sharply. The privately-held company recently raised prices for its drug, Daraprim, from $13.50 a pill to $750, overnight. However, this is what can happen in a very frothy market and it is hard to argue that biotechs are at least approaching bubble territory at this point given their incredible growth over the past few years, so even minor hiccups can get blown out of proportion (see the Intro Guide to Leveraged Biotech ETF Investing).
Biotech stocks on the S&P 500 Index fell more than 3 percent on Monday while the total index was up slightly.
Shkreli said that unlike many other drugmakers that also take huge price increases on old drugs, his company is investing in research to come up with better drug for toxoplasmosis.
The average American spent $US947 on prescribed medicines and over the counter drugs, compared to the OECD average of $US487, according to a 2011 report by the Organisation for Economic Co-operation and Development.
United States trade negotiators have leaned on Australia to make it easier for major pharmaceutical firms to charge more for drugs, by extending patents and intellectual property protections against generic competitors.
Clinton’s Twitter post was inspired by an article Sunday’s New York Times about steep markups in older so-called specialty drugs used to treat rare conditions in a small number of patients.
Gallant, the HIV doctor, said Daraprim is already highly effective in combination with other drugs.
Drug industry advocates fear if the U.S. government was allowed to negotiate prices for drugs, its economy of scale via large buying power could push prices down. If Clinton makes her way to the Oval Office and implements more regulation on pharmaceutical drug pricing, biotech companies may underperform the broader market.
“We’ll find out if this is really implementable given that the Republicans control Congress”. As Clinton’s tweet went viral and began reach a wider audience, volume climbed and prices dropped further.