The furor unleashed when Turing Pharmaceuticals and its CEO Martin Shkreli raised the price of toxoplasmosis drug Daraprim from $13.50 to $750 a pill, then defended the 5,000% hike, threatens to drive investors away from biotech stocks long-term.

Investors began selling off shares yesterday as the iShares Nasdaq Biotechnology Exchange-Traded Fund (IBB) fell about 4.5%, with volume nearly triple the daily average. IBB has risen 27% over the last 12 months, compared with a 2% dip for the overall S&P 500 over the same period.

However, another exchange-traded fund, First Trust New York Stock Exchange Arca Biotech Fund, fell nearly 4.3% yesterday. Investors also saw declines of 3% or more for other biotech and pharma funds. PowerShares Dynamic Pharmaceticals ETF (PJP) declined 3.3%, while IShares US Pharmaceuticals (IHE) dropped nearly 3.5%.

The sell-offs followed Hillary Clinton’s tweet announcing she will present a plan designed to prevent steep hikes in drug prices: “Price gouging like this in the specialty drug market is outrageous,” she tweeted yesterday.

This morning, Clinton was set to announce her proposal. National news reports said the candidate will propose setting a $250 monthly cap on out-of-pocket prescription drug costs, allowing Medicare  to negotiate drug and biologic prices; eliminating tax deductions for direct-to-consumer ads; and lowering the exclusivity period for biologic drugs to seven years from 12.

“Since Hillary Clinton has to be considered a front-runner to be the next President of the United States, investors in the biotech sector didn’t react too favorably to this news and are clearly fearful of more government regulation or pricing interference in the near future,” Eric Dutram, ETF strategist with Zacks Investment Research, said in a commentary published yesterday.

He also noted that the tweet ended with “-H,” indicating it was written by her and not her social media team, “carrying extra weight for the message.”

Clinton telegraphed her intent to position herself against rising drug prices over the weekend, observing on CBS; “Face the Nation” that she frequently heard complaints over drug prices while campaigning: “I’m going to address them this week, starting with how we’re going to try to control the cost of skyrocketing prescription drugs,” she said, adding: “It’s something I hear about everywhere I go.”

Clinton’s stance has drawn criticism from one biopharma industry group. Pharmaceutical Research and Manufacturers of America (PhRMA) late this morning issued a statement from its president and CEO John J. Castellani saying that the Democratic candidate’s proposal “would turn back the clock on medical innovation and halt progress against the diseases that patients fear most.

“These sweeping and far-reaching proposals would restrict patients’ access to medicines, result in fewer new treatments for patients, cost countless jobs across the country and erode our nation’s standing as the world leader in biomedical innovation,” Castellani added.

Clinton’s main Democratic nomination rival, Sen. Bernie Sanders of Vermont, has reintroduced legislation allowing Medicaid program to fetch lower prices for some drugs and enabling U.S. residents to buy lower-cost drugs from Canada. The legislation is not expected to advance given Republican majorities in both houses of Congress.

Cowen & Co. today referred GEN to earlier cautions to investors—the most recent coming in a report issued yesterday—that investments in major pharmaceuticals carry, among their risks, “pricing pressures” as well as economic sensitivity and/or weakening consumer demand in developed markets.

One analyst predicts further investor sell-offs: “I do think there will be more days like today,” Bradd Kern, managing director at Armored Wolf, told CNBC.

The issue of drug pricing resurfaced in recent days, following a report in The New York Times highlighting the sharp price hike for Daraprim. Shkreli defended the increase in interviews yesterday: “This drug saves your life for $50,000. It is still a bargain for health insurers. At this price, it is a no-brainer,” he told Bloomberg.

He also said that the company would ensure through assistance programs that patients in need of Daramprim could obtain the drug even if their insurance companies refused to pay.

[This report has been updated from an earlier version to include details of Clinton’s proposal and comment from Pharmaceutical Research and Manufacturers of America].

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