MW RFK Jr. would rattle health markets as head of HHS, but his confirmation is far from certain, analyst says

By Ciara Linnane

'If Kennedy is confirmed, it is hard to bookend risks for investors as his views are so outside the traditional Republican health policy orthodoxy'

Robert F. Kennedy Jr. would create "significantly more volatility" in health markets if he is confirmed as Secretary of Health and Human Services, making navigating policy risks far more challenging, according to Raymond James analyst Chris Meekins.

Meekins made the comment in a note to clients published after reports, later confirmed, that President-elect Donald Trump was naming the vaccine skeptic and former presidential hopeful as his pick for the role.

Kennedy has some unconventional views that worry public health experts and the pharmaceutical industry, said the analyst, who is not convinced he could be confirmed.

"However, if Kennedy is confirmed, it is hard to bookend risks for investors as his views are so outside the traditional Republican health policy orthodoxy," the analyst wrote early Friday.

Investors may need to scrap everything they have thought they understood about where Republicans stand on healthcare, he wrote.

"Kennedy's appointment may make it less likely traditional qualified experienced GOP staff will agree to join HHS, creating more uncertainty," he wrote.

Kennedy is known for his vaccine skepticism and his aversion to the new class of GLP-1 drugs for diabetes management and weight loss. He is also a firm critic of the pharma industry in general.

The scion of arguably the most famed family in Democratic Party politics, Kennedy has no health degree or formal qualification but made healthcare and the failings of the U.S. system a cornerstone of his own run for president.

In the past, Kennedy supported a single-payer healthcare system, but he has also said individuals should be able to retain their private health insurance if they wish.

On abortion, he has been pro-choice, but his campaign also expressed openness to restrictions once a fetus has reached viability, said Meekins.

Among the Republican senators Meekins is keeping an eye on regarding confirmation: Susan Collins of Maine, Lisa Murkowski of Alaska, Bill Cassidy of Louisiana, Shelley Moore Capito of West Virginia, Joni Ernst of Iowa, Chuck Grassley of Iowa, John Kennedy of Louisiana (no relation), Mitch McConnell of Kentucky, Thom Tillis of North Carolina, Lindsey Graham of South Carolina and John Barrasso of Wyoming.

"Recent Supreme Court decisions around Chevron deference and other cases limit the authority of agency leaders," Meekins wrote. "If Kennedy tries to go around congressional law to execute what he wants, lengthy legal battles will be likely, and he will likely lose."

Vaccine stocks tumbled early Friday in response to the news, with Pfizer Inc. $(PFE)$ partner BioNTech SE (BNTX) leading the decliners, down 2.4%.

Eli Lilly & Co. Inc. $(LLY)$ and Denmark's Novo Nordisk $(NVO)$ (DK:NOVO.B), the two leaders in the GLP-1 space, were down 0.9% and 3% respectively.

Meekins wrote last week that Kennedy would not have carte blanche to do whatever he likes with the U.S. healthcare system, noting the laws and regulations enacted by Congress make it almost impossible to fire established career government bureaucrats at the public-health agencies.

For more: Can RFK Jr. really 'run wild' on healthcare? Investors shouldn't panic yet.

-Ciara Linnane

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November 15, 2024 07:23 ET (12:23 GMT)

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