Health care and biotech stocks fell sharply after President-elect Donald Trump attacked the industry during his press conference Wednesday.
"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," Trump said.
"And the other thing we have to do is create new bidding procedures for the drug industry, because they're getting away with murder," he said.
The iShares Nasdaq Biotechnology ETF (IBB) briefly fell more than 2.5 per cent, tracking for its first negative day of 2017.
The health care SPDR (XLV) declined around .96 per cent, with Endo International falling around 8.6 per cent, Perrigo down more than 6 per cent and Mallinckrodt down more than 7 per cent.
The Nasdaq composite erased gains to trade slightly lower.
Amgen, Gilead Sciences and Celgene each fell more than 1.7 per cent in early afternoon trade.
Health care dropped more than 1.5 per cent as the worst performer in the S&P 500, with the pharmaceuticals sub-sector down more than 1.5 per cent and the biotechnology sub-sector off nearly 3 per cent.
IBB intraday move Wednesday
Market analysts had generally expected a Trump election victory to have less of a negative effect on health care stocks than Democratic candidate Hillary Clinton would have, as she was more outspoken against high drug prices.
However, Trump's postelection comments about tackling high prices have hurt the sector.
IBB is down more than 5 per cent over the last 12 months.
"I expect biotech stocks to rebound, especially as the companies execute on 2017 guidance. However, the drug price issue will likely linger, especially if it becomes one of Trump's key private-sector issues, along with defence, autos, and industrials such as Carrier," Michael Bailey, director of research and chair at FBB Capital Partners, said in an email.
"My sense is cutting drug prices will prove more difficult for Trump than discouraging a company from moving production to Mexico," Bailey said.