Robert F. Kennedy Jr. confirmed by Senate as next Secretary of Health and Human Services

The confirmation vote

After his surprising nomination in the middle of last November followed by heated Senate committee hearings, Robert F. Kennedy Jr. was confirmed by the Senate of the United States as the next Secretary of Health and Human Services (HHS), the US equivalent of a healthcare minister. Kennedy won the vote by 52-48, where senators largely voted along party lines, with former Senate majority leader and polio survivor Mitch McConnell being the only Republican voting against Kennedy. While another important Republican, Senator Bill Cassidy, chairman of the Senate’s Health, Education, Labor and Pensions (HELP) Committee and a medical doctor of 30 years also had serious doubts, in the end he relented and voted for Kennedy.

The most important healthcare agencies

In this new position, Mr. Kennedy will play a key role in shaping the everyday life and health of American citizens by influencing several government agencies. One of them is the Centers for Medicare and Medicaid Services (CMS) which is responsible for federal health insurance and policies concerning reimbursement and access to medicines. This agency will be led by former medical talk show personality, Dr. Mehmet Oz.

The Food and Drug Administration (FDA) is responsible for the regulation of food, drugs and medical devices and has a large impact on innovation by approving or rejecting new medicines and medical devices. The new Commissioner of this agency is Dr. Martin Makary, a surgeon, who is considered a conventional pick and is less likely to implement dramatic changes.

Two other notable agencies are the Centers for Disease Control and Prevention (CDC) and the National Institutes of Health (NIH). As the name suggests CDC - expected to be led by former congressman, Dr. Dave Weldon - is responsible for prevention of chronic and infectious disease prevention and vaccine mandates among other fields. At the same time, the incoming Director of NIH, Dr. Jay Bhattacharya will oversee grants and funding allocated to biomedical research.

Kennedy’s likely focus on nutrition and PBMs

Mr. Kennedy took a long road, full of twists and turns to get to his current position. First, he launched a presidential campaign in 2023 to run for the Democratic Party’s nomination, only to convert to an independent candidate a couple of months later, before completely suspending his campaign in August 2024, to throw his support behind Donald Trump, the Republican nominee.

An environmental lawyer by profession, Mr. Kennedy lacks scientific or medical training and has no prior experience in the government. This did not prevent him from being an outspoken critic of vaccines for a very long time, often citing refuted theories and spreading misinformation. At the same time, he tempered and denounced several of his prior views during his Senate committee hearings, claiming that he was not against vaccines.

However, nutrition and food safety rather than vaccines seem to be his focus once he takes his seat at HHS. He has strong opinions on artificial food dyes and ultra-processed food and their disproportional contribution to chronic illnesses in children and adults alike.

When it comes to medicines, Dr. Makary is considered a conventional and reasonable candidate, likely signaling business as usual when it comes to drug approvals and the pace of innovation. At the same time, drug prices could remain in political focus, and based on the Trump administration’s communication, a reform of Pharmacy Benefit Managers (PMBs) could be a viable way tot tackle high prescription costs. These companies act as middlemen between health insurers and drug manufacturers, getting their revenue from administrative fees and negotiated rebates. PBMs often operate as a part of health insurers and considering the overly negative public opinion on these companies, they could be ripe for reforms.

Policy expert: Kennedy is less disruptive than expected

We arranged a meeting with investors this week to discuss these topics in detail. We gained valuable insights from our guest speaker, a leading US healthcare policy expert, who highlighted that Robert F. Kennedy might be less disruptive than people expect. His more muted comments during the Senate committee hearings along with the guarantees he had given to the committee not to dismantle important policies also point in this direction. Additionally, the other candidates to lead important HHS agencies are more conventional, also supporting the expert’s view. He mentioned that many tried to disrupt the US healthcare system for better and worse, but most found that it is easier said than done and Mr. Kennedy will likely not be an exemption.

Kennedy’s support of innovation

Nevertheless, Mr. Kennedy and many others in the new administration are supporters of innovation as shown for example by Mr. Kennedy’s prior investments in innovative biotech companies. Based on his comments, he recognizes the value this industry creates for patients and investors. His deputy, Jim O’Neill, who will be responsible for operational issues at HHS, could also be a strong pro-innovation voice considering his experience as a biotech venture capitalist.

To conclude, Mr. Kennedy will probably be less disruptive then currently expected and the biopharma industry could in fact benefit from a more innovation and business friendly environment under the new administration. However, as market already has taken into account, there will be short term uncertainties as the new Administration starts working.