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Health stocks hit after Trump taps RFK Jr for top job


Health stocks hit after Trump taps RFK Jr for top job

Getty Images Robert F. Kennedy Jr, in suit and tie, raises his eyebrows sceptically during hearing with the House Judiciary Subcommittee on the Weaponization of the Federal Government on Capitol Hill on July 20, 2023 in Washington, DC. Getty Images

Shares in vaccine makers and healthcare firms around the globe slid sharply on Friday, as investors warned that Donald Trump’s selection of Robert F Kennedy Jr as US Health Secretary could pose recent challenges to the sector.

Kennedy is known as a vaccine sceptic and, if confirmed in the post, has vowed to use it to crack down on “large Pharma”.

The information prompted a sell-off across the industry. In the US, shares in Pfizer sank more than 4% and Moderna about 7% while UK-listed firms AstraZeneca and GSK dropped more than 3%.

Russ Mould, property director at AJ Bell, said the pick had “spooked” shareholders, despite questions about how the recent administration might pursue its threats.

“The impact on the sector is challenging to judge fully at this stage but, at the very least, it will factor a excellent deal of uncertainty,” he said.

The US health secretary leads a huge agency overseeing everything from food safety to medical research and welfare programmes.

Critics of Kennedy, commonly known by his initials RFK Jr, include many community health officials, who have denounced his record of spreading health information that scientists declare is untrue.

But the former environmental lawyer has gained a following by tapping into mistrust of those who view US regulators as too deferential to large food and medical companies.

Before endorsing Trump, Kennedy had mounted a failed bid for the presidency himself as a third event candidate. That campaign included calls for increased restrictions on food chemicals and dyes, cutting ultra-processed foods from school lunches, and forcing drug companies to distribute more information about vaccines.

If his nomination is ratified by the Senate and he is empowered to act on his pledges, it would mark a transformation in way, not only from the Biden administration, but from Trump’s first term, which saw the government pour money into helping firms develop Covid vaccines, while taking a hands-off way to regulation.

However, Trump also drew alarm from the industry with efforts to lower drug prices, including by making it easier to import medicine from Canada.

Paul Chaplin, chief executive of Danish firm Bavarian Nordic, which saw its shares drop more than 15%, said the industry would have to wait to view what will actually transformation.

But he noted that policies in Trump’s first term had actually boosted the corporation’s mpox and smallpox vaccine business.

Getty Images A hand in a latex glove holds a tray of syringes filled with the Pfizer-BioNTech vaccine for Covid-19 at a vaccination centre in Munich, Germany, on Thursday, 2 Dec 2021Getty Images

He said he thought a second Trump term, with RFK Jr as health secretary, could be excellent for some parts of his business, while raising uncertainty for others, acknowledging that the uncertainty had hit distribute prices.

“It is too early to declare and we have to wait and view how things develop,” he said In an interview on the BBC’s globe Business update radio programme.

In Europe, Danish-listed shares of Ozempic-maker Novo Nordisk closed more than 5% lower, while France’s Sanofi, a chief in flu vaccines, saw its shares in Paris slide more than 3%.



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