NEW YORK (TheStreet) -- The major biotech stock indices fell Monday minutes after Democratic presidential candidate Hillary Clinton tweeted that she'll release a plan to tackle escalating drug prices on Tuesday.
Clinton's tweet included a link to the New York Times story on Turing Pharma and its decision to raise the price of a 63-year-old infectious disease drug from $13.50 per pill to $750 per pill, which she called "price gouging" and "outrageous."
Healthcare investors have long feared U.S. government involvement in drug-pricing decisions. The ability to set prices with almost no limits has made the biotech and pharma industries among the most profitable in the U.S. economy.
It's also fed a sustained healthcare bull market that has made a lot of investors rich. A limit on drug prices could cripple industry growth and profits, which in turn, could kill the bull market in biotech and drug stocks.
High drug prices--and what to about them--was already an issue in the current presidential election cycle, sparked by polls showing bipartisan criticism about the high cost of drugs. But the scrutiny and scorn being heaped on Turing Pharma and its hedge fund manager-turned-CEO Martin Shkreli Monday might one day be seen as the tipping point which made government intervention into the way drugs are priced a reality. For this, Shekeli is probably not the most popular guy among biotech and drug investors, today.
The iShares Nasdaq Biotechnology Index (IBB) - Get Report is down 4% while the SPDR S&P Biotech ETF (XBI) - Get Report is off 6%. Both indices tracking biotech stocks fell soon after Clinton's tweet made the rounds of Wall Street trading floors.
The specifics of Clinton's plan to control drug prices won't be released until Tuesday. But other presidential candidates, including Bernie Sanders, have already made their plans public.
These include allowing Medicare to negotiate with drug companies for discounts, much the way private sector insurances companies already do. Sanders also wants to allow the re-importation of lower-priced prescription drugs from other countries and require more transparency about R&D costs and drug-pricing decisions.
Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.