Shares of U.S. pharmaceutical and biotechnology companies fell on Tuesday after President Donald Trump said he was working on a “new system” to reduce prices in the industry, without providing details of his plan.
Trump’s comments came as he backed a Republican bill to repeal and replace the Affordable Care Act, known as Obamacare.
“I am working on a new system where there will be competition in the Drug Industry,” Trump tweeted. “Pricing for the American people will come way down!”
Pharmaceutical and biotech shares fell broadly after Trump’s tweet, but had pared back steeper initial losses by afternoon trading.
Shares of Pfizer Inc (PFE.N) and Merck & Co (MRK.N) were down about 0.5 percent, while Eli Lilly & Co (LLY.N) dropped 1.1 percent.
The Nasdaq Biotechnology index .NBI was 0.8 percent lower, pausing momentum for the index, which has climbed about 12 percent this year after a brutal 2016.
“I’m skeptical about what it is that he might do that would actually have a material impact on drug prices,” said Paul Heldman, managing partner at Heldman Simpson Partners, which follows healthcare issues for institutional investors out of Washington.
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