Even though nearly every analyst this morning is saying Thursday's bloodbathwas an overreaction, investors are continuing to sell biopharma stocks in the early going Friday.
There are two main issues putting pressure on the stocks. For big pharma, investors are worried about President Obama's proposal to raise the rebates the companies would have to provide for popular drugs bought by Medicaid. And for big biotech, the fear is over the administration's roadmap for getting cheaper, generic versions of expensive, supposedly harder-to-reproduce biotech drugs on the market.
Most analysts believe generic biotech drugs are years away. And many say that the earnings impact of the increased rebates, if they become a reality, are not as big as investors seem to think they'll be for the drug companies.