Major biotech indices fell 4%.

By Sy Mukherjee
January 11, 2017

A version of this essay appears in today’s edition of the Fortune Brainstorm Health Daily. Get it delivered straight to your inbox.

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 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.

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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 4%. Big cap biotechs like Biogen, Celgene, and others are all down anywhere from 2% to 4%.

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.

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