Christmas stockINGS is set to hit a new low as the global pharmaceutical company stocks suffered a significant fall in early trading on Monday.
Aal stock prices fell more than 9% to around $1.05 in early trade, while Pfizer stock dropped by nearly a fifth to $1,079.
In the final minutes of trading, the stock price of both companies was down about 1%.
While stocks are usually the biggest winners of a stock market crash, stocks of major pharmaceutical companies have fallen a lot more in recent years due to rising healthcare costs and slower growth in other sectors.
Pfizer’s stock dropped from $2,051 to $2.04, while Aal stock plummeted by more than 12% from its $2 a share high last year.
Both companies have been struggling to regain their market value as the US economy has stagnated and they have seen revenue fall.
The healthcare industry is not just the focus of a major economic downturn, as it is also the focus for a number of global healthcare providers and pharmaceutical companies.
Pfizer is facing its first major crisis in a decade as its CEO Martin Shkreli, who has been accused of illegally bribing healthcare professionals in an attempt to boost drug prices, is facing criminal charges.
Shkrelis alleged that he was paid $5,000 per hour by Pfizer to fix the price of its drug Daraprim, which is used to treat toxoplasmosis, and that he also pocketed $5 million in cash to help pay off his debt.
Shyam Sunder, a partner at hedge fund Voorhees Capital Management who is closely following the US healthcare market, said on Monday that the pharmaceutical industry was in a situation similar to that of other sectors that are experiencing a global slowdown.
“There is not much more they can do, and this is really the first time that the US has seen a large decline in this sector,” he told CNBC.
“We are seeing a lot of uncertainty around healthcare and there is a lot to be concerned about for both companies and healthcare providers.”
The market will be particularly worried as the Federal Reserve is due to start raising interest rates later this year.
The US central bank will decide whether to raise rates from the current rate of 0.25% to 1%, which has been held steady since September.
If rates rise, this could be a catalyst for more stocks to fall.
Shkreshl is currently being investigated by the US Securities and Exchange Commission for securities fraud, and his company has been embroiled in several legal battles with its shareholders.
While pharmaceutical stocks are not the only sectors experiencing a downturn, the market is also seeing a sharp rise in other industries.
While the pharmaceutical sector has seen significant growth in recent decades, it is not expected to remain that way, as many other sectors are also facing major challenges in terms of growth.