Pharma Shares Rise on Trump Victory

10.11.2016 -

Shares in major globally active pharmaceutical producers rose by as much as 11% on the news that Donald Trump had won the Nov. 8 election as president of the United States. The trade journal FirstWord Pharma said the increases—led by Pfizer of the US – were spotted in the immediate election aftermath. Companies seeing quantified stock surges included Novo Nordisk, Roche, Sanofi, Shire and Bayer, with AstraZeneca, GlaxoSmithKline and Novartis also reportedly seeing rises.

According to analysts for BNP Paribas, Trump's election is “positive” for the pharmaceuticals sector, “with the bulk of industry hostile legislation now off the agenda.” Other commentator said they doubted that the outlook for drugmakers in one of the world’s largest pharmaceutical markets was so optimistic. While the industry-friendly Republican party has won control of both chambers of the US Congress, some think potential drug pricing controls may not be off the agenda, as even conservative voters advocate such measures These could grow in importance if the Republican Congress repeals President Barack Obama’s Affordable Care Act (ACA), as Trump has said is his aim.

Trump’s position is identical to Clinton’s, including price as another criterion to use in negotiations, an analyst for Evercore ISI said in a note to clients. On the other hand, Jefferies analysts quoted by the Fierce Biotech website said that although US drug pricing pressure and political reform would remain a concern, Trump's win would be a relief for investors as a Clinton administration would have foreseen greater price controls.

At campaign rallies, the US president-elect has also suggested he would allow Americans to reimport medications from countries where prices are lower – a move most drugmakers fiercely oppose. Pharmaceutical sales in the EU have suffered from parallel imports. In any case, Trump statements about reimportation may have to be taken with a grain of salt. Many of the reimported medications come from Mexico. On the premise that anything from Mexico must be bad, he has pledged to build a wall along the border.