Almost immediately after former Secretary of State Clinton sent her strong-arming tweet, stocks in the biotech market began to plunge.

The Nasdaq biotech index closed down almost 5% — one of the worst days of 2015 for the biotech industry. The day’s total losses amounted to more than $38 billion.

Some pharmaceutical companies saw drops as extreme as 10%. The largest firms, which barely waver around 1% changes, saw over 2% declines.

Clinton was responding to a New York Times article in which the author highlighted Turing Pharmaceuticals and an exorbitant price jump for a 62-year-old specialty treatment called Daraprim.

Upon acquiring the rights to sell Daraprim, Turing Pharmaceuticals altered the price overnight from $13.50 per tablet to $750.00 per tablet. That’s an increased of over 5,000%.

Even before the New York Times exposé, Turing Pharmaceuticals received a complaint letter from the Infectious Disease Society of America saying that the price increase for Daraprim was “unjustifiable for the medically vulnerable patient population… unsustainable for the healthcare system.”

In response to the media onslaught, Turing Pharmaceuticals announced the following day that it will reduce the price of the drug.

Daraprim is the only U.S.-approved method used to treat toxoplasmosis, a parasitic infection often contracted via contaminated food or water. 

For patients with weakened immune systems, toxoplasmosis can be cause for serious concern. This especially affects patients living with AIDS and various cancers, as well as pregnant women.

However, a healthy person may not even notice the contamination. About 60 million people could be infected right now and have not even the slightest idea.

Biotech Toes the Line

But the point of this isn’t Daraprim or Turing Pharmaceuticals or even Hillary Clinton.

Although Turing’s price increase is the most dramatic, it’s not an uncommon trend in the pharmaceutical world.

Insurance companies, health care advocates, and politicians have been criticizing outrageous drug prices for years.

Biotech stock prices, in a massive scare-off from Hillary’s tweet, did plummet.

And yes, this event is bringing the debate about pharmaceutical company practices to the forefront. As long as this topic remains on the conversation table, biotech companies will have to provide some answers — some real justifications for the prices they inflict on the American people.

But some analysts will argue that the iShares Nasdaq Biotechnology ETF (NASDAQ: IBB) was already skating on thin ice even before Hillary fired her tweet.

The IBB had been struggling to stay above its 200-day simple moving average and regrasp its 150-day SMA for the past week. Actually, we can look even further back and see that the biotech sector has been teetering since the end of July.

Clinton’s subsequent unveiling of her planned policy pushed the market down further. Among other things, her policy includes capping prescription drug bills for chronically ill patients at $250 per month.

Clinton intends to “halt excessive profiteering” by major biotech companies, asserting that her policy would allow American patients to import their necessary drugs from more affordable international sources — as long as those drugs align with U.S. standards.

So did Clinton kill biotech? I’d say not.

Her tweet and policy pushed that market off the precipice it had been toeing for some time now.

Large biotech firms, including Gilead, have taken some major hits recently by pharmacy groups refusing to treat patients with overpriced medicines. In response to these events and the major sell-offs that go with them, large biotech firms are being forced to discount their own prices.

With biotech stock working in correction mode, we might see even lower share prices coming our way.

But there’s one thing we need to remember here, folks…

Despite all the hoopla coming from Clinton’s Twitter account, the odds of her policy having a real effect on pharmaceutical prices are incredibly small. 

Even if a Democrat does take the White House, it will be a long, uphill battle against big Republican money (and a Republican House) that opposes any legislation to regulate drug prices. 

It’s not often that politicians and legislation have such a large effect on entire markets, but analysts are still warning investors to “get ready” for some noisy health care pricing as the battle over pharmaceutical prices heats up going into the 2016 elections.

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