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Pharmaceutical shares fall on Clinton comments on excessive drug prices

Discussion in 'Market News' started by Lily, Aug 25, 2016.

  1. Lily

    Lily Forum Member

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    Drugs companies among biggest FTSE fallers after threatened clampdown

    Pharmaceutical shares are among the day’s fallers after new comments from US presidential candidate Hillary Clinton about excessive price increases.

    Specifically referring to Mylan raising the cost of allergy treatment EpiPens, she promised a clampdown on excessive charges:

    It’s wrong when drug companies put profits ahead of patients, raising prices without justifying the value behind them.

    That’s why I’ve put forward a plan..to address exorbitant drug price hikes like these. As part of my plan, I’ve made clear that pharmaceutical manufacturers should be required to explain significant price increases, and prove that any additional costs are linked to additional patient benefits and better value. Since there is no apparent justification in this case, I am calling on Mylan to immediately reduce the price of EpiPens.

    EpiPens can be the difference between life and death. There's no justification for these price hikes. https://t.co/O6RbVR6Qim -H

    European healthcare stocks have been caught in the storm of another attack on price gauging in the industry from presidential hopeful Hillary Clinton. Shire and Hikma Pharmaceuticals are amongst the top fallers on the FTSE 100 whilst Qiagen in Germany was a top faller in the Stoxx 600 Healthcare euro price index.

    Hilary Clinton’s attack on the price gauging of an allergy medicine is expected to continue to weigh on the healthcare sector. Biotechs especially, including the likes of Amgen, Biogen and Celgene can be expected to remain under pressure. Her statements reaffirm a fear in the industry that a Clinton presidency would see a serious crackdown on pharmaceutical price gauging.

    The healthcare sector is weighing heavily on the FTSE this morning (specialty pharma in particular) with the quartet of Astra, Glaxo, Hikma and Shire making up for over 35% (18pts) of the index’s declines, enough to keep it below the key 6800 mark. This comes after US peers finished the day on the back foot thanks to fresh political disquiet about excessive and potentially unethical pricing of life-saving drugs, Democratic presidential candidate Hilary Clinton demanding that generic and specialty pharma group Mylan lower the ‘outrageous’ price ($300; +500% over 6 years) of its allergy injection EpiPen.

    This echoes the populist swipe and US congressional challenge of Martin Shkreli, founder and former CEO of Turing Pharma which recently hiked the price of an Aids medicine by 5,000% overnight. It also serves to strike fear into the hearts of healthcare groups and their investors everywhere. As always, the industry remains between a rock and a hard place, treading the fine line between balancing the costs of clinical success (and failure) with the economic laws of supply and demand, all the while trying (often in vain) to satisfy demanding stakeholders without appearing to view the sick as merely a commercial opportunity.

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