Shares in vaccine makers and healthcare firms slump as investors brace for possible regulatory changes under Robert F. Kennedy Jr

Shares in global vaccine makers and healthcare firms plummeted on Friday after former President Donald Trump nominated Robert F. Kennedy Jr. for the position of U.S. Health Secretary. Kennedy, a prominent vaccine sceptic and environmental lawyer, has stirred concern among investors with his vocal opposition to “Big Pharma” and his commitment to cracking down on the pharmaceutical industry if confirmed for the role.

The announcement sent shockwaves through the stock market, particularly impacting pharmaceutical giants. Pfizer’s stock fell by more than 4%, while Moderna saw a decline of around 7%. UK-listed firms, such as AstraZeneca and GSK, also experienced a dip of more than 3%.

Russ Mould, investment director at AJ Bell, commented that Kennedy’s nomination has “spooked” shareholders, creating uncertainty in the healthcare sector. “The impact on the sector is hard to judge fully at this stage but, at the very least, it will cause a good deal of uncertainty,” Mould added.

As U.S. Health Secretary, Kennedy would oversee a vast array of federal agencies responsible for food safety, medical research, and welfare programs. Critics, including many public health officials, have slammed Kennedy for promoting what they claim are false health claims, particularly regarding vaccines. However, Kennedy has garnered a loyal following by capitalising on growing mistrust of regulatory bodies and their ties to large corporations.

Kennedy’s political journey has included a failed run for president as a third-party candidate, during which he advocated for stricter regulations on food chemicals, reducing ultra-processed foods in school lunches, and greater transparency from drug companies about vaccines. His stance, while controversial, resonates with those who view U.S. regulators as overly lenient toward powerful industries.

If his nomination is confirmed by the Senate, Kennedy’s policies could mark a dramatic shift from both the Biden administration’s focus on pandemic preparedness and Trump’s earlier approach, which included substantial government investment in vaccine development and a more hands-off regulatory stance.

During Trump’s previous term, the administration sought to lower drug prices, including facilitating the importation of cheaper medications from Canada. The health sector will be closely watching how Kennedy’s leadership might influence regulatory practices, particularly in terms of vaccine development, pharmaceutical pricing, and the broader approach to public health.

Despite the volatility in the stock market, some within the industry, including Paul Chaplin, CEO of Bavarian Nordic, which saw a significant 15% drop in its share price, stressed that the future of the sector remains uncertain. Chaplin, however, pointed out that some of Trump’s policies in his first term had positively impacted companies like his, particularly in the smallpox and mpox vaccine markets.

The coming weeks and months will determine whether Kennedy’s appointment will lead to fundamental changes in U.S. healthcare policies, or whether the health sector will adapt to his potentially more aggressive regulatory stance.