Consider the power of a mere tweet. Biotechnology stocks plunged Monday after Hillary Clinton, the Democratic front-runner for president, accused drugmakers of “outrageous” price gouging.
On a day when U.S. stocks were headed toward gains for the session, biotechnology stocks were down considerably, and the movement began after Clinton’s Twitter post at 10:56 a.m. EDT.
Price gouging like this in the specialty drug market is outrageous. Tomorrow I'll lay out a plan to take it on. -H https://t.co/9Z0Aw7aI6h
— Hillary Clinton (@HillaryClinton) September 21, 2015
The iShares Nasdaq Biotechnology exchange traded fund, which measures the performance of 144 Nasdaq-listed biotech firms, plunged about 5 percent. Meanwhile the Standard and Poor’s 500 Index of biotechnology-listed stocks was down more than 3.4 percent. That represents about $15 billion from the value of the industry.
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. The article focused on a drug called Daraprim, which was acquired in August by Turing Pharmaceuticals.
The start-up founded by a former hedge fund manager Martin Shkreli immediately raised the price of the drug to $750 a tablet, from $13.50, boosting the cost to patients (and their insurers) by hundreds of thousands of dollars a year.
"This drug saves your life for $50,000," Shkreli said told Bloomberg an interview in New York City. "It is still a bargain for health insurers. At this price, it is a no-brainer."
Last month, the Infectious Disease Society of America sent a letter of complaint to Turing Pharmaceutical saying the Daraprim price increase was “unjustifiable for the medically vulnerable patient population” and “unsustainable for the healthcare system.”
Daraprim, known generically as pyrimethamine, is used to treat a parasite infection that can be life-threatening to newborns and people with compromised immune systems, like AIDS patients. "Price gouging like this in the specialty drug market is outrageous," Clinton tweeted. "Tomorrow I’ll lay out a plan to take it on."