RFK Jr. as HHS Head: Biotech Investment Implications 

By Greg Mannix, VP, EMEA Business Development, LSN

Editor’s note: The below article is a digest of published expert analyst commentary rather than original content.

According to analysts, RFK Jr’s nomination to head HHS may have introduced a level of uncertainty when it comes to the future of biotech and pharma investment, especially in the areas of vaccines and infectious disease. After his appointment, pharma stocks, especially those of vaccine makers, dropped. Regulatory uncertainty is generally not ideal for the industry. For example, Moderna tried to reassure investors by asserting that according to legislation, the secretary’s role is management, not policy. We may see an RFK who focuses on diet and obesity prevention and leaves regulatory matters for the FDA commissioner (Trump nominated Marty Makary, MD). On the other hand, if HHS, FDA, CDC (for which Trump nominated Dave Weldon, MD) and NIH (for which Trump nominated Jay Bhattacharya, MD, PhD) see a departure of resources with scientific expertise, the resulting uncertainty could have a dampening effect on investment, especially at the venture stages. However, reducing FDA funding may face hurdles due to nearly half the agency’s budget being funded by user fees rather than federal funds.

RFK Jr has expressed skepticism of the transparency of the safety data behind COVID vaccines as well as vaccines for measles and polio. However, his primary complaint has been mandates rather than regulatory process; He has also expressed sentiment toward GLP-1s, highlighting that these drugs address symptoms rather than food system issues. This has resulted in some industry analysts expressing concern about the confidence of investors who fund vaccines or infectious disease therapies.

NIH funding is also a concern to biotech investors. RFK Jr previously stated that he would reduce NIH staff by 600 – 20,000 employees on his first day on office, potentially shrinking an organization that spends $50B on research, either directly, through monetary grants or through partnerships. Watch our video with the NIH, where they explain funding and partnering options beyond SBIR. Given the reliance life science startups have on NIH funding and partnerships, an RFK Jr effect on startup investment dollars could be most influenced in the short term by potential changes at the NIH. RFK Jr also said that he wants the NIH to take an 8-year break from researching infectious disease, presumably to focus on chronic diseases. He has also stated in the Wall Street Journal that half of NIH’s budget should be dedicated to research on preventative, alternative and holisitic medicine. Notwithstanding the above, the first Trump administration recommended cuts in federal spending on research too, but the NIH saw its budget increase 30% between 2016 and 2020.

Finally, RFK Jr has indicated that he wants DTC pharmaceutical advertising to cease. Analysts have estimated returns on DTC advertising to be 100% to 500%, and some have indicated that such a ban would reduce pharmaceutical revenue.

All that said, many analysts and government experts have indicated that they do not believe RFK Jr. will end up making seismic shifts in the above areas, due to congressional oversight, industry pressure or precedent during the first Trump administration. Perhaps more important will be Makary’s moves as FDA commissioner and Bhattacharya’s actions as head of the NIH. The one thing we can be sure of is the first quarter of 2025 will certainly be carefully watched by the biotech investors.