NEW YORK/LONDON (Reuters) - Pharmaceutical and biotechnology shares soared on Wednesday as Republican Donald Trump’s U.S. presidential election calmed investor fears of tough action on drug pricing that has pressured the sector for more than a year.

A trader sits in front of the computer screens at his desk at the Frankfurt stock exchange, Germany, June 29, 2015. . REUTERS/Ralph Orlowski

Hospital shares tumbled as a Republican sweep of Congress raised prospects for a rollback of the Affordable Care Act (ACA), which expanded the number of patients in government health plans.

Fears of a win by Hillary Clinton and Democrats gaining power in Congress had clouded the outlook for biotech and pharma shares and contributed to general underperformance for the U.S. healthcare sector this year.

On Wednesday, the stocks also were fueled by the defeat of a Californian ballot proposal aimed at reining in rising prices for prescription drugs.

Clinton “not being in the White House removes the notion of some sort of price controls off the table,” said Tony Butler, an analyst at Guggenheim Securities in New York. “From the perspective of pharmaceutical, biotechnology, generic (drug) stocks, (the election) went about as well as could be expected.”

Shares of drugmaker Pfizer PFE.N rose 8.5 percent and biotech Celgene CELG.O jumped 10.4 percent, while specialty drugmaker Mallinckrodt MNK.N surged 10 percent.

European drug stocks also gained, with Switzerland's Roche ROG.S and France's Sanofi SASY.PA both rising more than 5 percent.

The Nasdaq Biotechnology index .NBI advanced 9 percent and was on track for its biggest single-day gain in more than eight years.

Biotech sentiment was also lifted by the prospect of Republican-led legislation to free up cash currently held overseas for tax reasons by large U.S. pharmaceutical companies. Analysts said that could pave the way for acquisitions in the sector.

Biotech and pharmaceutical investors have been on edge since September 2015, when Clinton tweeted about specialty drug “price gouging.” Over that time, Nasdaq-listed biotech shares had lost more than one-fourth of their value through Tuesday.

Trump has said less on the topic. But he has suggested support for importation of cheaper drugs and advocated increased scrutiny over drug price increases and a bigger role for negotiating down the cost of medicines.

Some Republican lawmakers have also seized on high drug prices in the past year, including for Mylan's MYL.O EpiPen emergency allergy treatment, suggesting the issue may not go away.

Even with a Trump administration, “we do believe there is an overall shift toward greater pricing scrutiny that will continue to reduce potential revenue growth purely from price increases,” Jefferies analyst Brian Abrahams said in a research note.

Shares of hospital chains Tenet Healthcare THC.N and HCA Holdings HCA.N tumbled 25 percent and 12 percent, respectively, while health insurer Centene CNC.N, which specializes in the government's Medicaid health program that was expanded under the healthcare law, dropped 17.3 percent.

“We see extreme risk of ACA repeal/replace, loss of the Medicaid expansion, a primary driver of results for both hospitals and health plans,” Mizuho Securities analyst Sheryl Skolnick said in a research note.