(Bloomberg) — Drugmakers are learning to duck for cover when Hillary Clinton puts them in her sights.
The Democratic presidential nominee’s influence was on display again Wednesday, when she sent Mylan NV’s shares plummeting as much as much as 6.2 percent within minutes of calling for the company to drop prices of its EpiPen emergency allergy shot. It marked the third time over the past year that Clinton’s comments roiled drug stocks.
Mylan announced Thursday it would take immediate action to address the criticism, saying it would cut the cost of the allergy shot by expanding already-existing programs to help people with high-out-of-pocket expenses.
By using a savings card, patients will get as much as $300 toward their EpiPen 2-Pak, effectively reducing costs by 50 percent for those who were previously paying the company’s full list price, the drugmaker said in a statement. The company is also doubling eligibility for its patient assistance program.
Mylan shares had been slumping since Friday, after several members of Congress, including Senate Judiciary Chairman Chuck Grassley of Iowa, began demanding explanations for the more than 400 percent price increase for the auto-injectors since 2007. But after Clinton issued her statement blasting Mylan at 1:09 p.m. Wednesday, the stock immediately started a decline that extended until 2:34 p.m. when shares hit $42.93, a 5.5 percent decrease.
Her remarks, calling Mylan the “latest troubling example of a company taking advantage of its consumers,” also sent the broader 144-member Nasdaq Biotechnology Index tumbling as much as 3.6 percent Wednesday. Mylan didn’t respond to requests for comment.
Clinton has repeatedly criticized aggressive drug pricing and tax avoidance practices. Yet with most national polls giving her wide margins over Republican nominee Donald Trump, her statements are being taken more seriously.
Clinton’s statement renewed investors’ fear of “more political risk around drug pricing concerns and potential changes in the future,” Michael Yee, an analyst with RBC Capital Markets, said Wednesday in a note to clients.
“This risk is not going to just go away, but it has been quieter and lower in the political agenda over the last six months and just happens to be something new that has come up after nothing much recently and after a big biotech rally and investors were taken by surprise,” Yee said.
Clinton drove down the Nasdaq Biotechnology Index on the morning of Sept. 21, 2015, when she tweeted: “Price gouging like this in the specialty drug market is outrageous. Tomorrow I’ll lay out a plan to take it on.”
The statement came amid the public outcry against Martin Shkreli, the former Turing Pharmaceuticals AG chief executive officer who boosted the cost of, Daraprim, a decade-old medicine by 50-fold to $750 a pill. Her tweet set off a 5 percent drop of the index that extended for more than two hours.
Earlier this year, Clinton also piled on to a three-year low for Valeant Pharmaceuticals International Inc. when her campaign announced plans for ads targeting what she called the company’s “predatory pricing.” The stock was already under pressure from news about scrutiny by Canadian regulators and a newly disclosed U.S. Securities and Exchange Commission investigation.
Clinton has proposed forcing pharmaceutical companies to spend more on research, banning direct-to-consumer advertising for prescription drugs and capping out-of-pocket costs for medications.
During the competitive primary season, Clinton became more outspoken in criticizing the practices of large corporations, reacting in part to the success of her rival Bernie Sanders’ populist message. She aired television ads blasting Valeant for its drug pricing, as well as other companies for moving overseas to reduce their tax burdens.
Trump has also repeatedly bashed companies that move their headquarters or shift operations outside the U.S. During the Republican primaries, he also said he would push for Medicare to be able to renegotiate drug price deals. But his statements haven’t made a significant impact on individual drug stocks.
Valeant stock is down 70 percent this year through Wednesday to $30.54. Mylan’s stock fell 5.4 percent Wednesday to $43.15 and has declined 20 percent this year.
Mylan investors are likely worried that the EpiPen’s profitability will take a hit if the company is forced to drop prices, said Ronny Gal, an analyst with Sanford C. Bernstein & Co. in New York. He mostly blamed the dip after Clinton’s statement to sensitivity surrounding health stocks generally.
Teva Pharmaceutical Industries Ltd. is also working on a generic competitor that could benefit from a sped-up review as a result of the political pressure. The Food and Drug Administration declined to comment on whether it was working to help Teva bring its product to market faster.
Grassley and a bipartisan group of four other senators wrote to the FDA on Wednesday, asking the agency to explain its role in the approval of “generic equivalents that could help to increase competition and lower prices if introduced.” The senators want to understand what factors have contributed to a lack of competition for the EpiPen and asked the FDA whether it is taking steps to ensure there’s an adequate supply of auto-injectors.
In the end, Gal doesn’t expect Mylan to be irreparably hurt by Clinton’s remarks.
“The Mylan management team had a pretty checkered reputation to begin with,” he said.
Mylan CEO Heather Bresch is the daughter of Democratic Senator Joe Manchin of West Virginia, and her company lobbied to pass legislation in 2013 to encourage stocking of EpiPens in schools nationwide — at the same time it was raising prices on the auto-injectors. Bresch also came under fire in 2008 when West Virginia University revoked her degree after a panel of professors said she hadn’t earned it.
More recently, she had to defend the company after it moved its corporate address overseas to lower its U.S. taxes in a transaction known as an inversion. Now incorporated in the Netherlands, its principal executive office is in Canonsburg, Pennsylvania.
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