Shares in drugmakers rise as US pricing fears retreat following Trump victory

Shares in a number of pharmaceutical companies, particularly those in Europe and India, rose Wednesday after the election of Donald Trump as US president fuelled expectations that pricing pressure on medicines in the country will ease. Shares in Pfizer climbed as much as 11 percent, Novo Nordisk was up more than 6 percent and Roche gained nearly 5 percent.

BNP Paribas analysts noted that Trump's election is "a positive for the (pharmaceuticals) sector, with the bulk of industry hostile legislation now off the agenda." Democratic presidential nominee Hillary Clinton had been vocal on price hikes in the drug industry, announcing in September plans to address "unjustified" increases in drug prices. BNP Paribas analysts remarked "the threat of further pricing pressure has receded for the most part, but expect volatility."

Shares in AstraZeneca, GlaxoSmithKline, Novartis and Sanofi also rose Wednesday, with Hikma Pharmaceuticals' stock lifting almost 7 percent, Shire up 5 percent and Bayer gaining nearly 3 percent. Meanwhile, shares in Indian drugmakers were also boosted, with Lupin CEO Vinita Gupta suggesting that he doesn't expect drug prices to change much after the election of Trump. Sun Pharmaceutical's stock rose as much as 4 percent, while shares in Dr. Reddy's Laboratories gained more than 5 percent.

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"Right now I think most biotech and pharma companies might be sighing a sigh of relief because...Clinton looked like she might do something drastic on drug pricing," commented Clive Meanwell, chief executive of The Medicines Company. However, Jefferies analysts suggested that despite Trump's win, US pricing pressure and political reform would remain a concern. Marie Owens-Thomsen of Indosuez Wealth Management said the idea that Trump is the good news candidate for the pharmaceuticals industry is "a bit of a simplistic view," adding "he has made several statements that are also potentially harmful."

Among Trump's election promises was a commitment to repeal the Affordable Health Care Act, also known as Obamacare, as well as support for importation of cheaper medicines, advocating increased scrutiny over drug price increases and a bigger role for negotiating down the cost of medicines.

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