Robert F. Kennedy Jr.'s nomination as the Trump administration's Department of Health and Human Services (HHS) secretary has rocked the biopharma world, sending shares sinking for many drugmakers following the Thursday announcement.
But in a contrarian take offered by BMO Capital Markets analyst Evan Seigerman, the more important—and as-yet-unknown—nomination for the industry is that of the next FDA commissioner.
If confirmed by the Senate, the BMO analyst expects RFK Jr., an environmental lawyer with no medical credentials, to focus on U.S. food and nutrition policy rather than "targeting the pharmaceutical industry or parroting long-debunked rhetoric on vaccines (which have become culturally and politically unpopular)," Seigerman wrote in a Friday note to clients.
Current HHS secretary Xavier Becerra is also a lawyer, Siegerman noted, speaking to the historical "administrative" precedent of the job.
"While we appreciate the uncertainty this appointment brings, the impact to biopharma is undecided until the FDA commissioner is selected," Siegerman explained. "Yes, the FDA and NIH fall under HHS, but there is little precedent in recent history for HHS policy dictating or affecting FDA regulation or approval of drugs."
Under president Donald Trump's first administration, oncologist Stephen Hahn, M.D., and physician Scott Gottlieb, M.D., were both tapped for the FDA commissioner spot. If the incoming president's next choice for the FDA is similar to his last two, it could stand to "reverse sentiment from here," the analyst noted, arguing that the biopharma industry's share-price reaction to RFK Jr.'s nomination was an "overreaction."
"We anticipate Trump's choice for FDA commissioner to be supportive of government and industry cooperation," Seigerman added.
Following the announcement of RFK Jr.'s spot in Trump's government, the prominent industry trade group PhRMA pledged to work with the upcoming administration to "strengthen our innovation ecosystem and improve health care for patients," CEO Stephen Ubl said in a recent statement.
"Our industry has long argued the U.S. must do more to address the growing epidemic of chronic disease, which is the biggest driver of health care spending," Ubl said. "This will require a comprehensive strategy that includes focusing more on prevention and early intervention; promoting health and wellness; and developing new treatments and cures."
Even though much of the biopharma world, like PhRMA, is gearing up to navigate working with the new administration, some industry officials had hoped that Trump's choice for HHS would go in a different direction such as former Louisiana Gov. Bobby Jindal, The Wall Street Journal reported Friday, citing unnamed industry officials and people familiar with the matter.
While RFK Jr. has recently attempted to dilute his controversial vaccine beliefs, emphasizing in an interview that "we're not going to take vaccines away from anybody," he has a decades-long history of anti-vaccine rhetoric, including spreading the debunked claim that vaccines cause autism.
But other analysts see a real threat. While the HHS secretary holds limited direct powers, analysts at Intron Health see "genuine risk" to vaccine sales in the U.S. GSK and its portfolio of flu, respiratory syncytial virus and shingles immunizations would likely be particularly threatened if the Senate were to confirm Trump's pick, according to the team at Intron.
Some Republican senators have already voiced their support of the nomination, while several Democrats harshly oppose Trump's choice.