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Presidential elections and secretary appointment: an event study for us biotechnology and drugs

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  • Martins, António Miguel
  • Albuquerque, Bruno
  • Sardinha, Luís
  • Moutinho, Nuno

Abstract

The aim of this study is to analyse the effect of the 2024 US presidential election and the appointment of the US health secretary to the largest US listed biotechnology and drug firms. Using an event study methodology, we find that President Donald Trump’s election had no significant impact on the industry. On the contrary, the results show statistically significant negative stock price reactions around the US health secretary appointment. The negative industry reaction to the US health secretary appointment is largely explained by his scepticism about vaccination and criticism about the high prices of drug prescriptions and margins in the industry. These results highlight the importance of top government position appointments, especially when such appointments eliminate much of the uncertainty regarding future government action in the industry and political uncertainty hypothesis. Finally, cross-section analysis reveals that the firms most penalized by the 2024 US presidential election and the appointment of the US health secretary are those with the highest investments in R&D and capital expenditures. This could mean lower future investments in new vaccines or drugs, seriously harming society.

Suggested Citation

  • Martins, António Miguel & Albuquerque, Bruno & Sardinha, Luís & Moutinho, Nuno, 2025. "Presidential elections and secretary appointment: an event study for us biotechnology and drugs," Finance Research Letters, Elsevier, vol. 85(PC).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pc:s1544612325013807
    DOI: 10.1016/j.frl.2025.108125
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    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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