High-flying biotech Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) was called out for its rapid drug price raises today by Senator Bernie Sanders, and its stock quickly crashed as a result.
ARIA fell over 14% after the following tweet by Sanders:
Drug corporations' greed is unbelievable. Ariad has raised the price of a leukemia drug to almost $199,000 a year. https://t.co/EB4nEPxP2G
— Bernie Sanders (@SenSanders) October 14, 2016
The article Sanders references above presents some worrying facts about Ariad’s pricing tactics:
Since the beginning of the year, the company raised the price of its Iclusig chronic myeloid leukemia treatment four times, which has amounted to a cumulative increase of 27 percent. As a result, the drug now has a list price of $16,560 a month, or almost $199,000 a year, before any rebates or discounts. And Ariad had also raised the price twice last year.
Biotech firms have come under fire from politicians frequently regarding their sales practices. Presidential candidate Hillary Clinton recently unveiled a plan to fight these kinds of price increases, which has added to the Biotech Sector‘s underperformance this year.
The reaction in ARIA today is proof positive that Washington is indeed a very powerful influence in the biotech world. If policymakers continue to insert themselves on the drug pricing issue, investors in the space will no doubt see even more volatility in the space, which has become a political battleground in this important and polarizing election year.
Ariad shares fell 11.28 -1.79 (-13.68%) in Friday afternoon trading. Year-to-date, ARIA has still surged more than 80%, however.