Monday, September 13, 1993
Biotechnology stocks shrugged off reports on Friday that the Clinton health care plan would review prices of new prescription drugs, deny Medicare coverage to those considered to be overpriced, and require drug companies to discount all drugs reimbursed by Medicare by at least 15 percent.
The BioCentury 100 was off 1 percent last week after having climbed 10 percent in the three previous weeks. In fact, profit-taking earlier in the week had driven the price level down almost 3 percent before shares staged a rebound.
Analysts had no ready explanation for the ho-hum reaction by investors. "It could be a 'Don't bother me with this again, it's already reflected in the stock' reaction, or a wait-and-see attitude," said Robert Friedman of Kidder, Peabody.
It's also possible that President Clinton wasn't aware of all aspects of the proposal, according to reports of his reaction to questions about the plan at a recent luncheon, Friedman said. He added, however, that "for me to believe Clinton is getting side-swiped here is a little hard."
'Tired of it'
David Molowa of Bear, Stearns said no one believes that there will be controls. "People are so tired of hearing it and they've reacted so many times. We didn't talk about it here," he said.