President Donald Trump said he's considering suing drugmakers for their role in fueling the opioid epidemic, sending pharma stocks tumbling Monday.
A number of cities, counties and states have already sued opioid manufacturers. Last month, Attorney General Jeff Sessions said he was creating a task force to examine companies' role in the epidemic and was ordering it "to examine existing state and local government lawsuits against opioid manufacturers to determine if we can be of assistance."
"Our Department of Justice is looking very seriously at bringing major litigation against some of these drug companies," Trump said Monday. "We'll bring it at a federal level. Some states are already bringing it, but we're thinking about bringing it at a very high federal level and we'll do a job."
Trump was speaking in New Hampshire, where he was introducing his administration's new plan to tackle the crisis. Shares of three opioid producers were hit especially hard. Endo International and Depomed shares both fell about 4 percent, while Mallinckrodt, dropped 5.5 percent.
Morgan Stanley identified the three companies as facing risk from the lawsuits because their branded opioid sales are, and were, significantly large relative to their portfolio and given their current high financial leverage.
In a note to clients, the analysts said that pharma companies who make branded drugs may be more exposed to lawsuits than those who make generics because the former are usually promoted, whereas the latter aren't.
"Companies must also be accountable," Trump said. "The Department of Justice recently created a task force to coordinate investigations and lawsuits against manufacturers and other bad actors that harm our citizens."