Source: Wall Street See
Analysts say that even if Kennedy is confirmed as the Secretary of Health in the USA, he may not be able to make a big impact. First, there may be internal disagreements within the Trump team; secondly, it is uncertain whether Kennedy has the authority to appoint leaders of departments like the FDA; finally, Trump may appoint someone with industry background as the FDA Commissioner, guiding Kennedy to focus on the nutrition field rather than pharmaceutical approval field.
The famous "anti-vaccine pioneer", advocate for healthy eating, new government nominee for Health Secretary, Robert Kennedy, and loyal "fast food lover", Trump, enjoyed unhealthy cola and fries together, even Trump's son joked on social platform X: "Let America be healthy again, starting tomorrow!".
Although the two are in the honeymoon phase, many analysts believe that Kennedy may find it difficult to implement large-scale reforms in the US medical care system, so investors do not need to panic too much.
Last Thursday,Trump officially announced the nomination of the "anti-vaccine pioneer" Kennedy,, vaccine stocks plummeted for several consecutive days, dragging down the entire medical health sector, spreading panic from the US stock market to Europe, and the stock market wailed.
If Kennedy becomes the Secretary of Health and Human Services, he will be in charge of 13 operational departments, including the FDA, National Institutes of Health, and the Centers for Disease Control and Prevention. He has proposed plans to revise direct-to-consumer drug advertising guidelines and set drug price ceilings, which the industry sees as the worst-case scenario.
Kennedy's plan may not necessarily be achieved.
Analysts say that even if Kennedy is confirmed by the Senate as the US Secretary of Health and Human Services, the feasibility of his plan remains uncertain.
First, there are indications that there may be internal discord within the Trump team - Kennedy and Vivek Ramaswamy of the Office of Management and Budget have widespread disagreements on regulating the pharmaceutical industry.
Kennedy hopes to push the Food and Drug Administration (FDA) to take a tougher stance on large pharmaceutical companies, increase regulation on drugs and vaccines, and reduce federal funding support for research and development.
Ramaswamy believes that the FDA's overly strict regulations create unnecessary barriers to innovation, advocating for reducing barriers to drug market entry.
This raises a question: as a biotechnology investor, will Ramaswamy demand that Trump relax regulations on pharmaceutical companies? Will Trump support Kennedy's preference for stricter policies?
Secondly, Leerink's biotechnology analyst Mani Forooha points out that it is unclear whether Kennedy will be able to implement reforms that could have a significant impact on industry profits, partly because it is uncertain if he has the authority to appoint leaders of departments like the FDA. Forooha says:
"The scale and complexity of the FDA mean that implementing comprehensive reform in various policies will be extremely challenging."
Finally, BMO Capital Markets analyst Evan Seigman stated that, based on Trump's previous term, he may appoint individuals with industry backgrounds as FDA commissioners (Kennedy himself does not have a degree or formal qualifications in the health field). Therefore, there should not be drastic changes in the medical care sector, and Trump may guide Kennedy to focus on areas like nutrition, rather than pharmaceutical approvals.
Editor / jayden
