Healthcare stocks take a hit after Trump appoints RFK Jr to top regulator

Shares of vaccine makers and healthcare firms around the world fell sharply on Friday as investors warned that Donald Trump’s selection of Robert F Kennedy Jr. as US Surgeon General could bring new challenges to the industry.

Kennedy is known as a vaccine skeptic and promised in the post that if approved, he would use it to take down “Big Pharma.”

The news caused a wave of sales in the industry. In the US, Pfizer’s shares were down more than 4% and Moderna were down nearly 9% at midday, while UK-listed firms AstraZeneca and GSK were down more than 3%.

Russ Mould, investment director at AJ Bell, said the election had “scared” shareholders despite questions about how the new administration might follow up on its threats.

“The impact on the industry is difficult to fully assess at this stage, but at the very least it will cause a large amount of uncertainty,” he said.

The US health secretary leads a massive agency that oversees everything from food safety to medical research and welfare programs.

Commonly known as RFK Jr. Critics of Kennedy, known by his initials, include many public health officials who have condemned his record of spreading health information that scientists say is inaccurate.

But the former environmental lawyer gained supporters by capitalizing on the mistrust of those who see U.S. regulators as too deferential to big food and medical companies.

Before supporting Trump, Kennedy made an unsuccessful bid for the presidency as a third-party candidate. This campaign included calls to increase restrictions on food chemicals and dyes, eliminate ultra-processed foods from school lunches, and force pharmaceutical companies to share more information about vaccines.

If his nomination is confirmed by the Senate and he is given the authority to fulfill his promises, it would mark a change in approach not only under Biden but from Trump’s first term, when the government poured money into helping firms develop Covid. vaccines take a hands-off approach to regulation.

But Trump has also alarmed the industry with his efforts to lower drug prices, including making it easier to import drugs from Canada.

Paul Chaplin, CEO of the Danish firm Bavaria, which saw its shares fall more than 15%, said the industry would have to wait to see what would actually change.

But he noted that policies during Trump’s first term actually increased the company’s mpox and smallpox vaccine business.

He said he thought a second Trump term, with RFK Jr. as health secretary, could be good for some parts of his business but increase risk for others, and acknowledged that uncertainty was affecting share prices.

“It’s too early to tell and we’ll have to wait and see how things develop,” he said in an interview on the BBC’s World Business Report radio programme.

In Europe, shares in Danish-listed Ozempic maker Novo Nordisk closed down more than 5%, while Paris shares of French flu vaccines leader Sanofi lost more than 3%.