By Bhanvi Satija
LONDON, Jan 22 (Reuters) – Sweeping U.S. policy changes under Health Secretary Robert F. Kennedy Jr. are having a chilling effect on vaccine makers as anti-vaccine rhetoric has turned into concrete changes to inoculation schedules and recommendations, investors and executives said.
The administration of President Donald Trump has in the last year upended vaccine recommendations, with the U.S. last month ending its longstanding guidance that all children receive inoculations against flu, hepatitis A and other diseases.
The unprecedented changes have led to diminished vaccine usage, hurt the investment case for some biotechs, and created a drag that will likely dent revenues and raise costs for companies in the coming years, 15 investors and analysts told Reuters.
“Vaccines will not be a growth area under the current administration,” said Stephen Farrelly, global pharma and healthcare lead at ING, signaling a potential drag on the sector through 2028.
VACCINE POLICY UNDER KENNEDY
Kennedy, a longtime anti-vaccine activist who has cast doubt on the safety and efficacy of vaccines contrary to scientific evidence, has moved quickly since taking over the Department of Health and Human Services under Trump.
He fired a panel of independent expert advisers, replacing them with members who share his anti-vaccine views, and dropped broad COVID-19 vaccine recommendations for pregnant women and children.
He also revived research into a long-ago debunked claim linking vaccines to autism, and adopted new reduced childhood vaccine schedules without the long-standing practice of involving a broad group of outside experts.
Investors and analysts initially saw Kennedy’s appointment as a headline risk, rather than a fundamental threat.
At the time, issues such as tariffs and drug pricing pressure from the Trump administration were weighing on sentiment, putting vaccine concerns on the back burner.
Sanofi Chief Financial Officer François-Xavier Roger last year noted “a little bit of negative buzz” around vaccines.
That changed as the risks become less theoretical. Investors are now concerned the impact of Kennedy’s policies will be hard to reverse, echoing public health experts’ worries, who also said they will lead to preventable illnesses and deaths.
Kennedy says the changes aim to improve safety and bring U.S. vaccine policy in line with other peer nations.
A HHS spokesperson said in a statement that vaccine recommendations are based on the best available “gold-standard scientific evidence and public health considerations, not corporate interests.”
Big vaccine makers include UK-based GSK, France’s Sanofi, U.S. drugmakers Pfizer and Merck, and smaller firms such as Moderna, Novavax and Germany’s BioNTech.
The striking policy changes have begun to prompt some rare public rebukes from industry leaders.
Pfizer CEO Albert Bourla and Sanofi CEO Paul Hudson criticized Kennedy’s rhetoric at a major healthcare conference last week, with Hudson citing “all the… misinformation that is going around.”
Bourla told reporters it was driving down vaccination rates and increasing disease risk. “I’m seriously frustrated,” he said. “What is happening has zero scientific merit and is just serving an agenda which is political and antivax.”
POLITICAL PRESSURE STARTS TO BITE
The long-term prospects for vaccine makers remains robust, investors said, as vaccines are still the most effective tool for preventing disease. But they said companies were now more beholden to the whims of political leaders.
“Unfortunately, success and failure will rest on the opinions of a few people. It’s not enough to have good science and commercial opportunity,” said Clear Street analyst Bill Maughan. “If you’re a biotech investor, it just seems tough to really get conviction in a vaccine name right now.”
Investors said they would stick by large-cap drugmakers less dependent on vaccine revenue such as GSK, Sanofi, Pfizer and Merck. Smaller players like Moderna, BioNTech and Novavax face sharper risks.
The effect of U.S. changes are already starting to take hold. GSK and Sanofi reported lower U.S. flu vaccine sales in the third quarter, despite a more severe flu season.
In October, Australia’s CSL postponed separating its vaccine unit Seqirus, citing “heightened volatility” and falling U.S. vaccination rates.
“There’s clearly consumer reaction to the narrative that is coming out in the United States,” said Jefferies analyst Michael Leuchten.
LONG-TERM VIEW
Some investors said demand for vaccines and disease prevention will likely rebound. Outbreaks such as the rising measles cases in South Carolina, or an extended severe flu season, could drive renewed vaccine usage, they said.
The U.S. Centers for Disease Control and Prevention recently said the 2025–26 flu season had seen at least 11 million cases and 5,000 deaths reported so far, nearly double last year’s toll.
Medical organizations, including the American Academy of Pediatrics, have challenged Kennedy’s policies in court and it remains to be seen how that will play out.
Investors “often focus on shorter-term time frames, while companies clearly take a far longer-term view,” said Linden Thomson, senior portfolio manager at asset management firm Candriam.
“These businesses have been around for decades. They don’t invest on a one- or two-year horizon,” agreed Matthew Masucci, an analyst for Callodine Capital, which owns GSK and Sanofi shares.
But for now, investors may be more cautious.
Whipsawing U.S. policy and vaccine scepticism is a drag on investment, said Ian Turnbull, an equity analyst at investment firm Mawer.
“It does make it a less attractive market to invest in if your demand isn’t predictable like it used to be,” he said.
(Reporting by Bhanvi Satija; Additional reporting by Maggie Fick in London and Michael Erman in New York; Editing by Adam Jourdan, Michele Gershberg and Bill Berkrot)
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