Drug Supply Chain Stocks Dip After White House Recommendations on Drug Pricing

Drug supply chain stocks headed lower on Friday, Feb. 9, following the release of a report from the White House Council of Economic Advisers on how the government can help bring down drug prices.

"The document includes many suggestions which have been bandied about for years, including moving drugs paid for under [Medicare Part B] to [Medicare Part D], changing how pricing data is reported, point of sale rebate adjudication, reducing generic drug costs, [enhancing pharmacy benefit manager] competition and driving faster approval of generic drugs and biosimilars," RBC Capital Markets LLC analyst George Hill wrote in a note.

Hill pointed out that it is a "very long process from proposal to policy. Few of these proposals are new, with consequences that are well understood; thus we see the likelihood of dramatic change as low."

Nevertheless, shares of pharmacy benefit manager Express Scripts Holding Co. (ESRX) closed down 2.2% on Friday at $71.71 amid volatile trading in the broader stock market.

As for drug distributors, shares of AmerisourceBergen Corp. (ABC) closed down 2.6% at $89.19 and shares of McKesson Corp. (MCK) dropped 0.9% to $148.93. Cardinal Health Inc. (CAH) ended in the green, up 0.1% to $66.72.

More from Stocks

Former Disney COO Emerges as Leading Candidate For CBS Job

Former Disney COO Emerges as Leading Candidate For CBS Job

Micron Shares Tumble on Mixed Earnings Results

Micron Shares Tumble on Mixed Earnings Results

Amazon and Oracle's Beef Is Carrying Over to the Courtroom in JEDI Dispute

Amazon and Oracle's Beef Is Carrying Over to the Courtroom in JEDI Dispute

U.S. Stocks Bounce Ahead of Fed Rate Hike Comments -- One Key Trend to Remember

U.S. Stocks Bounce Ahead of Fed Rate Hike Comments -- One Key Trend to Remember

In This Stock Market, It's Not Easy Being Green

In This Stock Market, It's Not Easy Being Green