The iShares Nasdaq Biotechnology ETF has been slipping.

The iShares Nasdaq Biotechnology ETF (NasdaqGS: IBB), the largest biotech-related ETF, has been losing ground since Monday. The ETF is locked inside a downward channel and is making lower-highs and lower-lows. Concerns on pre-election posturing around drug pricing appear to be pressuring IBB, the largest biotech-related ETF.

In a departure from Republican policy, President Trump has supported drug imports to dampen high drug prices in America.

Those fears may be coming true, judging from media reports.

According to The Hill, the Trump administration is issuing a rule and accompanying guidance that will allow states, pharmacies, wholesalers, and manufacturers to import prescription drugs from Canada. However, the caveat is that the import should not pose any safety risks and should save consumers money.

Moreover, the Wednesday announcement from the White House was strategically timed. It significantly came the same day that the House voted to impeach the President.

Drug pricing and import: About turn?

Health and Human Services (HHS) Secretary Alex Azar said on a call to reporters: “For the first time in history, HHS and the FDA are open to importation as a means to lower drug prices. No president in history has had an FDA willing to open the door to safe importation of drugs from Canada.”

However, the statement is a bit of a volte-face. Azar last year dubbed drug imports as a “gimmick.”

Prescription drugs are cheaper in Canada, though, because the government can directly negotiate their price with drug companies.

Drug import and pricing: Industry protest

Understandably, the drug industry is already up in arms. It warned of tainted drugs or those from unverified sources.

“Patients deserve access to the medicines they need with out-of-pocket costs they can afford,” said Jim Greenwood, chief executive of the Biotechnology Innovation Organization, to the WSJ. “Under no circumstance should we risk patient safety to achieve this goal, yet that’s exactly what this dangerous importation scheme will do.”

“These dangerous proposals threaten the safety of patients without delivering the savings they promise and would likely come at a high cost to the state,” said a blog from the industry group PhRMA.

Canadian clarification

However, will the Canadian government support the Trump administration’s import proposal?

That’s not clear, but the northern neighbor is apprehensive about high prices and potential shortages resulting from it:

In a statement to The Hill, Alex Cohen, a spokesman for Canada’s Minister of Health, said: “We continue to be in communication with the White House and the U.S. Department of Health and Human Services. Our message remains firm: we share the goal of ensuring people can get and afford the medication they need. But these measures will not have any significant impact on prices or access for Americans. We remain focused on ensuring Canadians have access to the medication they need.”

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