Shire, AstraZeneca and Hikma hit by Hillary Clinton's pharma-bashing

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Sharecast News | 25 Aug, 2016

Updated : 09:38

Hikma Pharmaceuticals, Shire and AstraZeneca were among FTSE-listed drug companies slipping lower on Thursday morning, following comments from US presidential favourite Hillary Clinton on pharmaceutical pricing that hit peers across the Atlantic overnight.

Clinton joined senators Susan Collins and Claire McCaskill in highlighting US-based Mylan's 480% hike in the price of its EpiPen epinephrine product since the company acquired it in 2007.

Sending signals about the potential direction of drug policy if she wins the presidential race, Clinton called on Mylan to drop the price of EpiPen, which has leapt from $100 for a two-pack in 2007 to around $600 today.

"That's outrageous - and it's just the latest troubling example of a company taking advantage of its consumers," Clinton said in a statement.

"It's wrong when drug companies put profits ahead of patients, raising prices without justifying the value behind them."

Senators Collins and McCaskill have called for an “urgent briefing” with Mylan's chief executive officer Heather Bresch following a public clamour for a government reaction to the pharma industry's freewheeling price increases.

The senators noted that Mylan's “profitability appears to have skyrocketed” during the period, raising concerns that the price increases “were not driven by increased costs of production or product improvements”.

Mylan said in a statement that ensuring access to epinephrine is “a core part of our mission” and highlighted that 80% of commercially insured patients on their assistance program received the product at no cost in 2015.

Not long before 0930 on Thursday, Hikma was down 4.71% to 2,123p, Shire was 4.1% lower at 4,819p, AstraZeneca by 2.5% to 4,954p and GlaxoSmithKline sliding 1.6% to 1,632.5p.

Analyst Mike van Dulken at Accendo Markets noted that the quartet was making up for over 35%, 18 points, of the FTSE 100 index’s declines.

He said Clinton's comments echo "the populist swipe and US congressional challenge of Martin Shkreli, founder and former CEO of Turing Pharma which recently hiked the price of an Aids medicine by 5,000% overnight".

"It also serves to strike fear into the hearts of healthcare groups and their investors everywhere. As always, the industry remains between a rock and a hard place, treading the fine line between balancing the costs of clinical success (and failure) with the economic laws of supply and demand, all the while trying (often in vain) to satisfy demanding stakeholders without appearing to view the sick as merely a commercial opportunity."

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