Despite beginning the year on a rough note, the broad-based S&P 500 is up a solid 8% year to date. On the flip side, drug stock investors seemingly can’t catch a break. The SPDR S&P Biotech ETF is off a little more than 7% year to date, while the VanEck Vectors Pharmaceuticals ETF has plunged 20% since the year began.
There were a number of factors that sacked drug stocks in 2016. We had what looked like a strong probability of Hillary Clinton winning the presidency and introducing prescription drug reforms that would have curbed drugmakers’ margins and potentially shortened patent protection periods. Even though Clinton lost the presidency, drug stocks haven’t recovered their losses for the year on account of President-elect Donald Trump also recognizing inherent issues with U.S. drug pricing.
