♠ Posted by Emmanuel in Health at 9/23/2015 01:30:00 AM
|With one tweet, Hillary Clinton wiped out billions and billions in drugmaker market capitalization worldwide.|
Carnage has ensued in global stock markets-especially in Europe and the US where these drugmakers are concentrated:
Martin Shkreli, a former hedge fund manager who is now chief executive officer of Turing Pharmaceuticals AG, was called out by Democratic presidential candidate Hillary Clinton. Clinton tweeted that she would soon release a plan to combat the high cost of prescription drugs. Biotechnology stocks fell after her comment.At any rate, you can see how utterly speculative these market moves are. First, Hillary Clinton is, at the moment, not an elected official in any capacity. She cannot drive legislation to limit drug pricing. Moreover, Barack Obama has already tried something similar but has been rebuffed by the industry. Second, the presupposition that she will have the ability to enact such legislation assumes she will attain some position of power. That is, she is the presumptive US president-in-waiting already according to these knee-jerk reactions...and will have a pro-drug reform Democratic majority in the legislatures to boot that Obama didn't have. Even then, it would take years and years and fighting with an immensely powerful industry to push such limits.
Clinton’s comment on Twitter sent the 144-member Nasdaq Biotechnology Index down 4.7 percent to 3,556.58 at 1:08 p.m. in New York, the biggest intraday drop since Aug. 24. Health-care stocks were the worst-performing subgroup on the broader Nasdaq index. "Price gouging like this in the specialty drug market is outrageous," Clinton tweeted at 10:56 a.m. "Tomorrow I’ll lay out a plan to take it on."
Anyway, the details promised the day before have been outlined:
One proposal would limit how much patients could have to spend out of pocket for drugs to $250 a month, or $3,000 a year. It’s an idea that builds on policy in the Affordable Care Act limiting total out-of-pocket medical spending to $6,600 a year for an individual, and $13,200 for a family. The idea could squeeze health insurers, as well, which provide drug coverage for patients and typically cover a portion of the costs.Prompt [surprise!] another round of stock selloffs today.
Another item would make drugmakers spend a minimum amount on research and development, just as Obamacare forces insurers to spend a minimum percentage of their revenue on medical care. Clinton would also bar pharmaceutical companies from deducting drug ad spending as a business expense, for tax purposes, which she said in a statement announcing the policies would save the government “billions of dollars over the next decade.”
While the stock selloff makes no sense to me given the many logical leaps of faith you have to make for such legislation to become reality, something is clear to me nonetheless: With market-moving power like this, Hillary Clinton is the front-runner to be the next US president if you witness the fright she can inspire in a massive global industry.
9/25 UPDATE: Today, Friday, Missus Clinton's statement is still hammering biotech. Talk about a candidate's market power.