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Greetings, readers. This is Sy taking over Cliff, who’s currently zipping all around California.

President-elect Donald Trump’s Wednesday morning press conference was always going to be a must-watch event on the heels of bombshell (and unverified) claims about his close ties to Russia and other, far more lewd allegations. But I bet few would have expected Trump to launch into a tirade against the pharmaceutical industry early on in the presser, sending biotech shares and indices plunging across the board.

Here’s what Trump said:

We have to get our drug industry coming back. Our drug industry has been disastrous. They’re leaving left and right. They supply our drugs but they don’t make them here, to a large extent. And the other thing we have to do is create new bidding procedures for the drug industry, because they’re getting away with murder. Pharma has a lot of lobbies, a lot of lobbyists, a lot of power. And there’s very little bidding on drugs. We’re the largest buyer of drugs in the world, and yet we don’t bid properly. We’re going to start bidding. We’re going to save billions of dollars over a period of time.

There’s a whole lot rolled into one statement there. Trump appears to be simultaneously criticizing inversion mergers that shift drug companies’ tax domiciles overseas, pharma’s tactic of using manufacturing plants in European, Asian, and African countries, and high drug prices.

That last bit on introducing competitive bidding and direct price negotiations (presumably in Medicare) is what’s giving the industry some serious heartburn today. Just how bad was the damage? The NASDAQ Biotech Index is down 3.5%; S&P’s biotech ETF is down 3.7%. Big cap biotechs like Biogen, Celgene, and others are all down anywhere from 2% to 3.5%.

The biopharma sector largely rejoiced when Trump won his surprise victory in November. There was a sense that Trump would be far less hostile on issues like drug prices compared with Hillary Clinton despite the fact that Trump did advocate for competitive bidding during the campaign (one notable exception: Allergan chief Brent Saunders, who warned that Trump’s populism could make the industry a target and that drug makers should begin to limit their own price hikes to fend off more stringent regulations). Surely, the Republican staffers surrounding the new president-elect would keep him in check on the issue, the thinking went.

So much for that. Of course, words are just words, and implementing price negotiations and competitive bidding is no easy feat in a GOP-controlled Congress. But it seems biopharma’s post-election sigh of relief may have been premature.

Produced by Sy Mukherjee

@the_sy_guy

sayak.mukherjee@fortune.com

DIGITAL HEALTH

IBM Watson, FDA team up to study blockchain use for data exchange. IBM Watson Health seems to announce a new collaboration pretty much every week. On Tuesday, it revealed that it will be teaming up with the Food and Drug Administration (FDA) to study one of the most important new technologies for the health care space: blockchain, the digital ledger system that fuels secure cryptocurrencies like Bitcoin. The collaboration will be very wide-ranging. "IBM and the FDA will explore the exchange of owner mediated data from several sources, such as Electronic Medical Records, clinical trials, genomic data, and health data from mobile devices, wearables and the 'Internet of Things,'" said the company in a press release. The first area of focus will be on (what else?) cancer-related data. While blockchain is still in its very early stages when it comes to health-related use, some in the industry say the tech can encourage much more widespread data-sharing by making transactions more secure and efficient. "The healthcare industry is undergoing significant changes due to the vast amounts of disparate data being generated," said IBM Watson Health's VP for Innovations and Chief Science Officer Shahram Ebadollahi in a statement. "Blockchain technology provides a highly secure, decentralized framework for data sharing that will accelerate innovation throughout the industry."

Digitization helped UCLA slash blood transfusions. UCLA Health was able to reduce the number of blood transfusions it performs by 18% by transitioning to a fully electronic bar code scanning system, according to Healthcare IT News. The medical center used to rely on a hybrid system using both electronic codes and paper; but this proved inefficient. "An all-electronic format with barcode scanning brings elements to increase patient safety and decrease errors because the patient and the unit of blood are positively identified as well as matched against the provider’s transfusion order," says nursing informaticist Meg Furukawa. A combination of the electronic bar coding and digital clinical decision support apparatus reduced blood transfusions, which in turn is a win for patient safety. (Healthcare IT News)

INDICATIONS

Sarepta spikes as company touts sales of controversial Duchenne drug. The saga of Sarepta Therapeutics' rare disease drug Exondys 51, the first-ever treatment for the degenerative movement disorder Duchenne muscular dystrophy, has taken yet another turn. As I've chronicled extensively, Exondys is an extremely controversial treatment, and the FDA's decision to approve the therapy over the objections of the agency's own scientific staff stunned many observers last year, raising questions about whether or not the FDA had succumbed to a well-orchestrated and heart-wrenching PR campaign by patients and advocates. Insurers like Anthem have refused to cover the exorbitantly pricey treatment (around $300,000) since the drug's label admits that Exondys hasn't proved its efficacy, making the therapy a roll of the dice for payers and patients alike. But Sarepta CEO Ed Kaye played up the drug's initial sales during the J.P. Morgan Healthcare conference in San Francisco, sending the company's shares flying 21% in Tuesday trading (they've fallen off a little on Wednesday). The sales are still quite modest: $5.4 million for its first three months on the market. Still, the fact that 250 Duchenne patients are willing to take a chance on the drug despite insurer pushback is a positive sign for Sarepta. (Fortune)

Merck cancer star Keytruda could be headed for another crucial victory. Merck got some truly stellar news as the FDA accepted a supplemental application to expand use of its superstar cancer immunotherapy Keytruda in lung cancer patients. This drug has already staked its claim in the world of next-gen "checkpoint inhibitor" cancer treatments by besting rival Bristol-Myers Squibb's competing treatment Opdivo in advanced non-small cell lung cancer (NSCLC). But now, Merck is going in for the kill, pushing a combination therapy of Keytruda and chemotherapy that would give the company a far wider reach into the massive lung cancer market. That's because the combo treatment would become a go-to, first-line option in patients regardless of whether or not they have the biomarker PD-L1 (Keytruda is far more effective in people who express high levels of the biomarker).

Valeant finally gets some good news with sale spree. You may have heard that Valeant Pharmaceuticals didn't have the greatest 2016 (it shed 85% of its market value over the course of the year). The company appears determined to try and dig itself out of that hole. And a series of recent deals actually bodes well for the embattled drug maker as it nabs significant multipliers on the assets. Valeant sold off cancer drug maker Dendreon to the Chinese conglomerate Sanpower and a trio of skin care products called CeraVe, AcneFree, and Ambi to L'Oreal. The returns? Dendreon will net Valeant a 66% profit (particularly impressive since the company was in bankruptcy when Valeant scooped it up) and the skin care products are being sold for about eight times their purchase price. (Fortune)

THE BIG PICTURE

Anti-vaxxer RFK Jr. says Trump tapped him to lead a commission on vaccine safety. Public health experts went into panic mode on Tuesday as Robert Kennedy Jr., son of Bobby Kennedy and environmental activist, said that President-elect Donald Trump asked him to serve as head of a commission on "vaccine safety and scientific integrity." Why all the fretting? Kennedy is notorious for spreading widely-debunked conspiracy theories about vaccines, falsely asserting that they are linked to autism (and that government agencies have conspired to hide these risks from the public). Kennedy himself claims that neither he nor Trump are actually anti-vaccine (though both have used rhetoric favored by the anti-vaxxer crowd), but that it's still important to debate their safety. The Trump team pushed back on Kennedy's comments. "The President-elect is exploring the possibility of forming a commission on Autism, which affects so many families; however no decisions have been made at this time," Trump spokeswoman Hope Hicks said in a statement. (Fortune)

11.5 million sign up for Obamacare in November and December. The Obama administration announced on Tuesday that about 11.5 million Americans signed up for individual health plans under the Affordable Care Act in the months following the presidential election. That includes 2.6 million new customers and incorporates data from all states, including those that run their own health insurance marketplaces under Obamacare. The news comes as Republicans grapple with the best way to dismantle the health law, including whether or not repeal should only occur once a replacement plan is firmly in place. (Fortune)