Donald Trump sends Pharma stocks plummeting with new tweet about drug prices

The tweet came as Republicans late on Monday unveiled legislation to dismantle the Affordable Care Act, known as Obamacare,

Click to follow

President Donald Trump’s latest pledge to drive down to drug prices has sent pharmaceutical stocks falling again after just one tweet.

Mr Trump tweeted that he is "working on a new system where there will be competition" in the drug sector and that "pricing for the American people will come way down."

Shares of Pfizer and Merck & Co shed 1.1 per cent and Amgen dropped 1.4 per cent, immediately after the tweet.

Meanwhile the NYSE Arca biotech index, which is up 17 per cent on the year so far, also fell 1 per cent at the start of trading on Tuesday.

While the NYSE Arca Pharmaceutical index, which represents a cross section of widely held companies involved in various phases of the production and marketing of pharmaceuticals, fell 1.2 per cent.

Mr Trump’s tweet didn't include further details about the new system, adding to uncertainty.

It’s not the first time that Mr Trump has criticised drugmakers for high prices.

In his speech to Congress last week, Mr Trump said more needs to be done to bring down "artificially high" prices for prescription drugs.

In January, close to $25bn was wiped off the value of the S&P 500’s top nine pharmaceutical companies in a matter of minutes after Mr Trump accused them of “getting away with murder” just a week before his inauguration.

Speaking to members of the press, Mr Trump  said: “We have to get our drug industry coming back. Our drug industry has been disastrous.”

“They supply our drugs but they don't make them here, to a large extent. And the other thing we have to do is create new bidding procedures for the drug industry, because they're getting away with murder”.

The drug industry has been on edge for two years about the potential for more government pressure on pricing after sharp increases in the costs of some life-saving drugs drew scrutiny in the press and among lawmakers.

Leaders of several large drugmakers met with Mr Trump at the White House in January.

Geoffrey Yu, head of the UK Investment office at UBS Wealth Management in London, previously said that more broadly in financial markets investors were on edge in relation to Trump’s policies and execution.

“Continue to expect the unexpected,” he said.