By Jonathan D. Rockoff and Jared S. Hopkins
President-elect Donald Trump's selection of Robert F. Kennedy Jr. to be Health and Human Services secretary was a worst case-scenario for drugmakers. Now, they will try to make the best of it.
Kennedy has supported discredited theories that link vaccines to autism and antidepressants to school shootings. If confirmed as HHS secretary, he could push to end drug advertising on television and to liability protections for vaccine makers. He could also target company user fees that subsidize drug-approval reviews.
None of the policy changes are on the wish lists of drugmakers. Health stocks, including Pfizer, GSK and Novo Nordisk, dropped on Friday. Moderna and BioNTech fell more than 4%.
The nomination "could have broad-reaching implications for the entire biopharma sector and many individual" companies, RBC analyst Brian Abrahams wrote to investors.
Industry officials say there is little they can do to stop Kennedy's ascension, though some hold out hope the Senate will reject the nomination. Lobbying against Kennedy, they say, would probably be unsuccessful and counterproductive.
Instead, industry officials hope to find areas of engagement. They want to build a relationship that would allow them to find places to work with Kennedy and others who might fill the ranks of the new Trump administration.
Among potential areas of cooperation are ultraprocessed foods, which Kennedy, like many food and nutrition experts, says contribute to obesity and chronic disease. Common cause against the products could pit pharma against the food industry.
The Pharmaceutical Research and Manufacturers of America, a trade group, sought to strike a constructive tone, saying it wanted to "work with the Trump administration to further strengthen our innovation ecosystem and improve healthcare for patients."
The Biotechnology Innovation Organization said it looked "forward to working closely" with Trump and his administration.
"The public health, economic security and our national security are best served by strong leadership that respects and advances science, nutrition and medicine and ensures that the United States and our allies continue to lead the world in biotechnology," it added.
Industry officials wouldn't talk on the record, because they expect to have to work with Kennedy and the new administration.
As HHS secretary, Kennedy would oversee an agency that spends more than $1.7 trillion to pay for the healthcare of many seniors and people with low incomes or disabilities, investigates foodborne illnesses and prepares for infectious-disease outbreaks and funds scientific research.
The pharmaceutical industry depends heavily on the decisions of the Food and Drug Administration, which rules on which drugs and vaccines can be sold. The Centers for Disease Control and Prevention recommends the vaccines that children and adults should take.
Industry officials had hoped Trump would nominate someone other than Kennedy for HHS. They favored alternatives Trump was considering, such as former Louisiana Republican Gov. Bobby Jindal, according to people familiar with the matter.
In a post on X announcing he had chosen Kennedy, Trump described drugs as contributing to the "overwhelming Health Crisis in this Country" and said drugmakers, among other companies, "have engaged in deception, misinformation, and disinformation."
Kennedy said on X that Trump asked him to "clean up the corruption in government health agencies," make sure they follow evidence-based science and end the "chronic disease epidemic."
He has been striking a more moderate tone on some issues in recent weeks. The day after the presidential election, Kennedy said he wouldn't "take away anybody's vaccines" but wanted to make sure people were informed about their safety and effectiveness.
Yet public-health experts and scientists have expressed concern Kennedy would, as HHS secretary, give credence to unfounded health claims and could weaken public health policies credited with keeping Americans healthy and extending their lives.
Now industry officials say they are are monitoring who might be nominated to run the FDA and are worried that agency rank-and-file could leave. Staff departures could result in slower drug-approval decisions, which could cost drugmakers hundreds of millions of dollars in lost sales.
The courts and laws could help protect the pharmaceutical industry's interests. Congress would have to pass a law if the Trump administration wanted to end the legal immunity of vaccine makers. Courts could block, on First Amendment grounds, any effort to end drug advertising.
States, not the federal government, set which vaccines children must get to attend school.
Yet HHS and its agencies play significant roles. Kennedy "can shape the agenda and shape the funding and the resources and how that money is spent," said Marc Scheineson, an attorney at Alston & Bird and former associate FDA commissioner.
Many doctors rely on the CDC's vaccine recommendations to guide the care they provide, and Kennedy could put vaccine critics on the board advising the agency on the recommendations.
The FDA has eased restrictions on access to medication abortion. But some conservative groups have challenged approval of the pill, while some state attorneys general and conservative groups have sought to limit access to the abortion pill and challenged mail shipments.
Kennedy, who is opposed by many antiabortion groups, at one point said he supported banning abortion after 15 weeks of pregnancy but later endorsed broad abortion access.
The FDA also plays a key role working out the details surrounding the user fees that industry pays to help subsidize drug-approval reviews, though Congress authorizes the law. The current user-fee law expires in fiscal year 2027.
Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com and Jared S. Hopkins at jared.hopkins@wsj.com
(END) Dow Jones Newswires
November 15, 2024 14:40 ET (19:40 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
