When it comes to President Donald Trump’s plans to bring down drug prices, the market has come to its own conclusions.

Once, two sentences in a 6,500-word Time “Person of the Year” profile was enough to send the biotech and pharmaceutical sectors sinking.

But since Trump’s late January meeting with pharmaceutical executives, investors have done an about-face on the sector.

SPDR S&P Pharmaceuticals ETF XPH, +0.62% shares had sunk nearly 9% in three weeks after Trump said drug companies were “getting away with murder” and that bidding could bring prices down.

ut after the president’s pharmaceutical meeting, when Trump said again that drug prices needed to be lower but appeared to back away from negotiating them, the sector ETF rebounded.

The SPDR S&P Pharmaceuticals ETF’s trajectory in the month since has gone steadily up, an 11.8% surge.

After a Tuesday evening address to Congress in which Trump said lawmakers should work bring down the price of drugs “immediately,” shares continued to make gains Wednesday morning, rising 1.2% in morning trade, as did the S&P 500 SPX, -0.46% .

Read: Text of Trump’s address to Congress

The president provided no detail as to how prices should be lowered, in comments that “seemed unspecific and vague,” said RBC Capital Markets analyst Michael Yee.

So far this year, “political pricing rhetoric and tone are relatively less noisy vs. 2016 headlines,” Yee said, adding that more likely than drug price negotiations “is some form of compromise down the road — even if anything was going to happen... and suggesting last year’s fears may be overblown.”

But others say Trump’s continual mentions of drug pricing suggest he does plan to do something about it.

The Tuesday evening mention of drug prices underscores “our view that Trump is committed to some action to permit federal government involvement in pricing under Medicare Part D, his position for a year,” Evercore ISI policy analyst Terry Haines said. “We continue to think that comes during ACA reform legislation, when Trump can insist something be included as a condition of him signing the bill into law.”

Haines’ colleague, Evercore ISI analyst Mark Schoenebaum, said earlier this month he’s concerned the market has “become a little complacent about what Trump’s going to do on drug pricing,” describing many of the proposals as “scary.”

“I will tell you that my behind-the-scenes conversations with industry executives indicate they are scared,” he said. “They don’t know what’s going to happen, and they’re standing on guard.”



Related: President Trump says he wants to bring down drug prices — and uses aspirin as an example

Drug stocks have rallied since a meeting of Trump and executives from major drug companies.

Though Trump said drug prices were “astronomical” at the late January meeting, and later that day White House press secretary Sean Spicer reasserted interest in negotiating drug prices, the key takeaway for many since then has been the president’s focus on what other countries pay for drugs.

Other countries, many of which do negotiate prices with drug companies, are participating in “global freeloading,” Trump said.

“Our trade policy will prioritize that foreign countries pay their fair share for U.S.-manufactured drug, so our drug companies have greater financial resources to accelerate development of new cures, and I think that’s so important,” Trump said. “Right now it’s very unfair what other countries are doing to us.”

See: President-elect Trump’s promise to bring down drug prices sends biotech and pharma ETFs slumping

That’s been a key factor pushing stocks up since the meeting, said Paul Yook, co-portfolio manager of Bioshares, which oversees biotech ETFs BBC, +2.44% and BBP, +0.57% .

“He’s very concerned that the U.S. is paying more,” Yook said. “He sees this as a real discrepancy that should not be in place. I think drug executives are very happy to hear that... If you can raise prices outside the U.S., and lower prices in the U.S., net-net it could be flat to the health care system. Or certainly not all down.”

BBC, which is composed of clinical trial-stage companies, had its second-biggest share move in over a year on Monday, coming in second to a move the day after Trump’s election, according to Yook.

“I don’t know why it came [on Monday] but it’s the most excitement we’ve seen in the space in a long time,” Yook said.

Trump is also dangling the prospect of tax reform, which could be a significant boon to pharmaceutical companies, prompting them to bring billions of dollars into the U.S., Yook noted.

”What we’re just not hearing about is the draconian price cuts that the Democratic administration or Hillary Clinton or Bernie Sanders were talking about,” he said. “What we’re talking about is more measured, and not really having a guillotine falling on drug prices, but rather more normalized market movements in the industry.”

Trump Tells Pharma CEOs: Bring Down Drug Prices

Outcry over drug prices has also somewhat dimmed in recent months.

Biogen Inc.’s BIIB, -0.74% Spinraza, approved around Christmas Eve last year, was priced at up to $750,000 in the first year and $375,000 in later years.



Though the drug was expected to prompt criticism, Biogen has gone largely unscathed, perhaps because the pricing was released during a time when many aren’t watching the news closely.

Read: Extremely expensive Biogen rare disease drug could invite tweet by President-elect Trump, analyst says

By contrast, a Duchenne muscular dystrophy drug that privately held Marathon Pharmaceuticals priced at $89,000-a-year prompted so much backlash that the company paused its launch.

Marathon’s Emflaza is a corticosteroid, which are used for DMD in many other parts of the world, which caused many to question whether the drug was truly innovative and as such, worth the price tag.