U.S. Vaccine Policy Shifts Impact Pharmaceutical Sector
Sweeping U.S. policy changes implemented by Health Secretary Robert F. Kennedy Jr. are affecting vaccine manufacturers and investors. These changes stem from anti-vaccine sentiment and have resulted in concrete alterations to inoculation schedules and recommendations.
Administration Actions
The Trump administration, led by Health Secretary Kennedy, has modified vaccine recommendations over the past year. Last month, the U.S. ended its longstanding guidance for children to receive inoculations against flu, hepatitis A, and other diseases.
Kennedy, an activist who has questioned the safety and efficacy of vaccines contrary to scientific evidence, has acted quickly since taking over the Department of Health and Human Services. He replaced a panel of independent expert advisers with members sharing his views and dropped broad COVID-19 vaccine recommendations for pregnant women and children. He also resumed research into a previously disputed claim linking vaccines to autism and adopted new, reduced childhood vaccine schedules without the involvement of a broad group of outside experts.
Kennedy has stated that these changes aim to improve safety and align U.S. vaccine policy with other nations. A HHS spokesperson affirmed that vaccine recommendations are based on "gold-standard scientific evidence and public health considerations."
Industry and Investor Response
Fifteen investors and analysts have indicated that these changes have led to diminished vaccine usage, affected the investment case for some biotechs, and will likely reduce revenues and raise costs for companies in the coming years. Stephen Farrelly of ING noted that vaccines may not be a growth area under the current administration, potentially affecting the sector through 2028.
Initially, Kennedy's appointment was seen as a headline risk rather than a fundamental threat by investors, who were more focused on tariffs and drug-pricing pressures. However, risks have materialized, and investors are now concerned that the impact of Kennedy's policies will be difficult to reverse, mirroring concerns from public health experts regarding potential increases in preventable illnesses and deaths.
Major vaccine makers include GSK, Sanofi, Pfizer, Merck, Moderna, Novavax, and BioNTech. Industry leaders have voiced public criticism. Pfizer CEO Albert Bourla and Sanofi CEO Paul Hudson criticized Kennedy's statements at a recent healthcare conference. Bourla stated that the situation lacked scientific merit and was driven by a political, anti-vaccine agenda, leading to reduced vaccination rates and increased disease risk.
Financial Impact and Future Outlook
Investors noted that the long-term prospects for vaccine makers remain robust due to vaccines being effective disease prevention tools. However, they acknowledged that companies are now more influenced by political leadership. Clear Street analyst Bill Maughan commented that it is challenging for biotech investors to feel confident in vaccine stocks currently.
Large-cap drugmakers less dependent on vaccine revenue, such as GSK, Sanofi, Pfizer, and Merck, are expected to fare better, while smaller firms like Moderna, BioNTech, and Novavax face higher risks.
The effects of U.S. policy changes are already apparent. 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 the separation of its vaccine unit, Seqirus, citing "heightened volatility" and declining U.S. vaccination rates.
Some investors believe demand for vaccines will eventually rebound, potentially driven by outbreaks such as rising measles cases or severe flu seasons. The U.S. Centers for Disease Control and Prevention reported 11 million cases and 5,000 deaths for the 2025–26 flu season so far, nearly double the previous year.
Medical organizations, including the American Academy of Pediatrics, have legally challenged Kennedy's policies. While investors often focus on shorter-term gains, companies tend to take a longer-term view. However, fluctuating U.S. policy and vaccine skepticism create an unpredictable market, making investment less attractive.