Image source: Getty Images.

What happened

Juno Therapeutics (JUNO), Vertex Pharmaceuticals (VRTX -0.59%), BioMarin Pharmaceutical (BMRN 0.64%), and Celgene (CELG) were all up at least 10% as of 2:58 p.m., after Donald Trump won the U.S. presidential election yesterday.

So what

Hilary Clinton had been quite vocal about high drug prices and her plans to do something about them, including spurring competition. Now that it's clear she won't be in the White House, investors have taken the risk of lower drug prices out of their valuations.

Vertex Pharmaceuticals' cystic fibrosis drugs and BioMarin Pharmaceuticals' orphan drugs have quite high prices, since they aren't used by very many patients. The prices of Celgene's cancer drugs are also pretty steep, but that's generally true of most cancer drugs. Juno Therapeutics doesn't have any therapies on the market yet, but since its cancer treatment is complex -- involving taking cells from patients, activating them, and then putting them back into the patient -- most investors expect it'll be quite expensive, likely priced higher than most cancer drugs.

Interestingly, both Celgene's and BioMarin's managements noted on their recent earnings conference calls that very little of their revenue growth came from price hikes. "Consistent with prior periods, our growth was predominantly volume-driven, as product volume grew 25%," noted Celgene's CFO Peter Kellogg of the 28% year-over-year growth in revenue.

"If there were any kind of regulation or policy around limiting the number or the amount of price increase one can implement every year or so, that would have zero impact on our business today, because that's not what we've been doing," said BioMarin's chairman and CEO Jean-Jacques Bienaime.

Based on today's move, investors clearly didn't buy Bienaime's zero-impact argument, perhaps because they were worried about other potential Clinton-sponsored mechanisms to lower drug prices beyond limiting further price hikes.

Now what

While a Trump presidency might be good for drugmakers, their long-term growth in revenue will come from increasing sales of their current drugs and developing new ones, no matter who is president. That's what investors should be focused on now that the election is over.