Health stocks hit after Trump taps RFK Jr for top job

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Shares in vaccine makers and healthcare firms around the world slid sharply on Friday, as investors warned that Donald Trump's choice of Robert F Kennedy Jr as US Health Secretary could pose new challenges to the sector.

Kennedy is known as a vaccine sceptic and, if confirmed in the post, has vowed to use it to crack down on “Big Pharma”.

The news prompted a sell-off across the industry. In the US, shares in Pfizer sank more than 4% and Moderna were roughly 9% lower at mid-day, while UK-listed firms AstraZeneca and GSK dropped more than 3%.

Russ Mould, investment director at AJ Bell, said the pick had “spooked” shareholders, despite questions about how the new administration might pursue its threats.

“The impact on the sector is hard to judge fully at this stage but, at the very least, it will cause a good deal of uncertainty,” he said.

The US health secretary leads a huge agency overseeing everything from food safety to medical research and welfare programmes.

Critics of Kennedy, commonly known by his initials RFK Jr, include many public health officials, who have denounced his record of spreading health information that scientists say is false.

But the former environmental lawyer has gained a following by tapping into mistrust of those who see US regulators as too deferential to big food and medical companies.

Before endorsing Trump, Kennedy had mounted a failed bid for the presidency himself as a third party candidate. That campaign included calls for increased restrictions on food chemicals and dyes, cutting ultra-processed foods from school lunches, and forcing drug companies to share more information about vaccines.

If his nomination is ratified by the Senate and he is empowered to act on his pledges, it would mark a change in approach, not only from the Biden administration, but from Trump's first term, which saw the government pour money into helping firms develop Covid vaccines, while taking a hands-off approach to regulation.

However, Trump also drew alarm from the industry with efforts to lower drug prices, including by making it easier to import medicine from Canada.

Paul Chaplin, chief executive of Danish firm Bavarian Nordic, which saw its shares drop more than 15%, said the industry would have to wait to see what will actually change.

But he noted that policies in Trump's first term had actually boosted the company's mpox and smallpox vaccine business.

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Chaplin told the BBC's World Business Report radio programme that risk and uncertainty hit share prices.

He said RFK Jr becoming US health secretary would be good for some parts of his business.

"It is too early to say and we have to wait and see how things develop," he added.

In Europe, Danish-listed shares of Ozempic-maker Novo Nordisk closed more than 5% lower, while France's Sanofi, a leader in flu vaccines, saw its shares in Paris slide more than 3%.