Healthcare Stocks Tumble as RFK Jr Named Trump's Health Chief

Healthcare and vaccine manufacturer stocks worldwide plummeted on Friday, as market analysts cautioned that Donald Trump's selection of Robert F Kennedy Jr as US Health Secretary could create significant headwinds for the industry.

Kennedy, widely recognized for his vaccine-skeptical stance, has declared his intention to challenge 'Big Pharma' if confirmed to the position.

The announcement triggered widespread selling across the sector. Major US players Pfizer saw their shares decline by over 4%, while Moderna experienced a steeper 9% drop by midday trading. British pharmaceutical giants AstraZeneca and GSK witnessed declines exceeding 3%.

AJ Bell's investment director Russ Mould noted that the appointment had 'rattled' investors, despite uncertainty surrounding the new administration's ability to implement its proposed changes.

'The full extent of the impact on the sector remains unclear at this point, though it's certain to generate considerable uncertainty,' he explained.

The US health secretary oversees an extensive department responsible for food safety, medical research, and welfare program administration.

RFK Jr, as he's commonly known, faces opposition from numerous public health officials who have criticized his history of spreading what scientists identify as medical misinformation.

However, the former environmental attorney has built a following by capitalizing on public skepticism toward what some view as overly cooperative relationships between US regulators and major food and pharmaceutical corporations.

Prior to aligning with Trump, Kennedy had launched an unsuccessful independent presidential campaign. His platform advocated for stricter controls on food additives and colorings, eliminating highly processed foods from school meals, and demanding greater vaccine transparency from pharmaceutical companies.

Should the Senate confirm his nomination and enable him to execute his agenda, it would represent a significant shift from both the Biden administration and Trump's first term, during which the government provided substantial funding for Covid vaccine development while maintaining a relatively light regulatory touch.

Nevertheless, Trump's previous term did cause industry concern with initiatives to reduce drug prices, including efforts to facilitate Canadian pharmaceutical imports.

Bavarian Nordic CEO Paul Chaplin, whose company experienced a 15% share price drop, indicated that the industry would need to await concrete policy changes.

He pointed out that Trump's first-term policies had actually benefited their mpox and smallpox vaccine operations.

He suggested that a second Trump term with RFK Jr heading health policy could prove advantageous for certain aspects of his business while increasing risks in others, acknowledging that market uncertainty had impacted stock valuations.

'It's premature to draw conclusions, and we'll need to monitor how the situation unfolds,' he stated during an appearance on BBC's World Business Report radio program.

In European markets, Danish pharmaceutical company Novo Nordisk, known for its Ozempic medication, closed down more than 5%, while French vaccine specialist Sanofi's Paris-listed shares decreased by over 3%.