Here's What To Expect Following Trump's Drug Pricing 'Robbery' Comments

Perhaps the only thing that traders can know for certain about President-elect Donald Trump’s policy decisions is that they should always expect the unexpected.

Biotech investors thought they had scored a major victory in November when Trump defeated Hillary Clinton. Clinton had made prescription drug prices a centerpiece of her campaign. However, during his first post-election press conference last week, Trump once again pledged to lower drug prices, saying drug companies are “getting away with murder.”

Credit Suisse analyst Kennen MacKay believes drug pricing legislation may be one of the key concessions that a Republican Congress makes to Democrats to get bipartisan agreement on legislation. Drug pricing has traditionally been a Democratic issue.

“While we anticipate potential for further commentary from Mr. Trump, we await signs of Congressional agreement/action to better understand potential for pricing controls to become a reality, and we continue to see potential for biotechnology companies to achieve premium pricing for innovative products,” MacKay explained.

Biotech M&A

In the meantime, Credit Suisse believes the biotech M&A environment will thrive. In addition, potential tax cuts and cash repatriation opportunities would also be good news for many biotech companies.

MacKay pointed out that Outperform-rated potential buyout targets Clovis Oncology Inc CLVS and Puma Biotechnology Inc PBYI have been mostly insulated from recent sector-wide weakness.

The iShares NASDAQ Biotechnology Index (ETF) IBB is up 0.07 percent since Trump’s press conference.