Drug Companies Face Hostility as They Hope for Allies Among Trumps Health Picks

Drug company executives had hoped that a second Trump administration would be staffed by friendly health policy officials who would reduce regulation and help their industry boom.

But some of President-elect Donald Trump’s proposed nominees are instead alarming drug makers, according to interviews with people in the industry.

For health secretary, Mr. Trump chose Robert F. Kennedy Jr., a longtime vaccine skeptic with no medical or public health training who has accused drug companies of the “mass poisoning” of Americans.

Mr. Trump’s pick to lead the Centers for Disease Control and Prevention is Dr. Dave Weldon, a former congressman from Florida who raised doubts about vaccines and pushed to move most vaccine safety research from the agency.

And Mr. Trump’s choice to run the Centers for Medicare and Medicaid Services, the former television host Dr. Mehmet Oz, has scant experience in managing a large bureaucracy like the one he may now oversee; the agency is in charge of health care programs that cover more than 150 million Americans.

In Mr. Trump’s first term as president, pharmaceutical executives largely cheered his health policy nominees. They had ties to the moderate wing of the Republican Party and decades of conventional experience, including at major drug companies.

John LaMattina, who was once the top scientist at Pfizer and is now a senior partner at PureTech Health, a firm that creates biotech startups, said of those officials: “You could disagree with them, but at least there’s a certain knowledge base and they’ve given serious thought to these issues.”

He added: “We’re now seeing some people without any sort of background, and that’s worrisome.”

The implications remain unclear for Americans who rely on medications or on widespread immunity from diseases that, for now, are rare. Some in the Trump administration want to speed drug approvals, potentially seeding the market with drugs of uncertain effectiveness. Mr. Kennedy has in some forums called for more independent safety reviews of established vaccines, and at other times he has demanded fewer constraints on unconventional and unproven treatments.

But Mr. Kennedy has also tapped in to veins of outrage among consumers and lawmakers, who have long vilified drug companies for setting high prices on certain drugs and reaping billions of dollars in profits rather than putting patients first.

In choosing such a vociferous critic as Mr. Kennedy, the president-elect stunned the sector, causing vaccine and biotechnology stocks to plummet temporarily.

And though Mr. Kennedy most recently said that he would not take vaccines away from Americans who want them, even a modest reduction in the number of people receiving certain shots could spook investors and translate into hundreds of millions of dollars of lost revenue. The industry is also concerned that drug approvals could be delayed if Mr. Kennedy makes good on his threats to fire drug regulators, or if they quit in droves to avoid working under his leadership.

“There was cautious optimism on Trump when he won, and that was very rapidly replaced with concern over R.F.K. Jr.,” said Brian Skorney, a drug industry analyst at the investment bank Baird.

Drug companies’ political action committees made millions of dollars in contributions to both Democrats and Republicans this election cycle, and the industry’s lobbying groups can wield considerable influence over policy and legislation.

Top pharmaceutical executives have said little publicly about Mr. Trump’s picks for health policy positions, seeking to avoid alienating the people who would regulate them. Their lobbying groups have publicly issued polite statements saying they want to work constructively with the administration.

But Derek Lowe, a longtime pharmaceutical researcher and industry commentator, has sharply criticized Mr. Kennedy on his blog, calling him “a demagogue whose positions on key public health issues like vaccination are nothing short of disastrous.”

“You really can’t engage with someone like that. There is no common ground,” Mr. Lowe said in an interview.

Drug industry officials have a long list of concerns about Mr. Kennedy, who did not return a request for comment for this article. They are particularly worried that he could seek to undermine childhood vaccines; one way would be for him to push to revise the government’s recommendations on immunizations.

Mr. Kennedy has also called for overturning legal protections that shield vaccine makers from litigation when people are seriously harmed by vaccines — a change that would upend an established compensation program and could expose the industry to costly lawsuits.

The stakes appear to be highest for companies that make vaccines. About a fifth of Merck’s revenue comes from two types of vaccines that Mr. Kennedy has targeted: a vaccine against the human papillomavirus that has averted thousands of cancer cases, and the shots that children receive to protect them against measles, mumps and rubella. (Merck declined to comment.)

Vaccine sales represent about 3 percent of the industry’s overall prescription drug revenues, according to IQVIA, an industry data provider. With some exceptions, vaccines tend to generate relatively low returns compared with profits from more expensive products used for diseases like cancer and arthritis.

Drug manufacturers also fear the effect Mr. Kennedy could have at the Food and Drug Administration. They often complain that the agency can be too onerous, but their business model is reliant on a well-staffed F.D.A. that can weed out would-be competitors that haven’t met its standards for safety and effectiveness.

Mr. Kennedy regularly lambastes the F.D.A. as “corrupt” and too close to the drug industry. He has denounced the fees the agency receives from makers of medical devices and drugs, which make up about half of its $7.2 billion annual budget.

It’s unclear how Mr. Kennedy’s views will mesh with those of Jim O’Neill, a Silicon Valley investor and former government official who would serve as his deputy if he is confirmed. Mr. O’Neill, a former top aide to the billionaire Peter Thiel, has called for approving drugs once they’ve been shown to be safe but before they have been shown to be effective. That idea goes well beyond the deregulation favored by most pharmaceutical executives.

Karoline Leavitt, a spokeswoman for Mr. Trump’s transition who will be his press secretary, described the president-elect’s choices for administration posts as “highly qualified” and reflective of “his priority to put America First.”

Although lawmakers in both parties frequently criticize the drug industry for charging high prices, Mr. Kennedy paints pharmaceutical companies in a much harsher light.

In an interview last year, Mr. Kennedy called vaccine makers “the most corrupt companies in the world” and “serial felons.” He has advanced falsehoods about the science underlying some of the industry’s most influential products, suggesting that vaccines cause autism and that H.I.V. may not be the true cause of AIDS. He has embraced an increasingly popular notion that healthy food and lifestyle changes — not pharmaceutical products — will heal sick people. Referring to drug companies, he wrote on X this year, “The sicker we get the richer and more powerful they become.”

“His view of our world seems to be that everything is a conspiracy,” said Brad Loncar, a former biotech investor who now runs BiotechTV, an industry media company. “If you really know our industry, it’s made up of well-intentioned, smart people, and it’s one of the most innovative sectors of our entire economy.”

Pharmaceutical officials were relieved by Mr. Trump’s pick to lead the F.D.A., Dr. Martin Makary, who has a contrarian bent but has been aligned with scientific consensus on vaccine safety and is not seen as a threat to unwind the status quo.

Drug companies hope to have an ally in Vivek Ramaswamy, who made his fortune as a biotechnology executive and has been named to lead a government efficiency effort alongside Elon Musk. Mr. Ramaswamy has been critical of what he describes as regulatory red tape that slows new drug approvals.

And Mr. O’Neill, the president-elect’s choice for deputy health secretary, has close ties to some biotechnology and medical technology companies, though he is less well-connected to major industry players.

Bracing for the potential of public attacks and new proposals that could hurt their bottom lines, drug companies are said to be reaching out to contacts close to Mr. Trump in hopes of influencing the incoming administration. Some are also considering new ways to defend their businesses from government initiatives they consider detrimental.

“There’s no playbook for dealing with these disruptive figures like Kennedy,” said Sam Geduldig, managing partner of the right-leaning lobbying firm CGCN Group.

Other lobbyists said they are instructing pharmaceutical clients not to hit the panic button yet. Once Congress returns after the Thanksgiving break, Mr. Kennedy is expected to make the rounds on Capitol Hill.

He could face trouble winning the support he needs from Senate Republicans to be confirmed because ofhis record on vaccines, his past support for abortion rights and his ideas about overhauling the food system.

Drug industry officials have long regarded Mr. Trump as a wild card, just as likely to be a boon as a foe.

In 2020, the Trump administration’s Operation Warp Speed worked closely with drug makers and poured billions of dollars into producing highly effective Covid shots in record time, saving countless lives. Mr. Trump’s pandemic-era health secretary, Alex Azar, spoke with admiration that year about “our partners in the private sector.”

But this year, Mr. Trump spoke little about Operation Warp Speed.

With some exceptions, the drug industry has been in something of a slump since the heights of the pandemic, when it enjoyed a boost in its public image and investors eager to get in on huge gains poured money into drug stocks.

But trust in vaccines and public health institutions has eroded at the same time as the bubble in the biotech markets has deflated. Among major Covid vaccine makers, Moderna’s stock price is down tenfold, and Pfizer’s stock price has fallen by half, from their high-water marks in 2021. An index of smaller biotechnology stocks is down by close to half.

Drug company officials still see opportunities to benefit from Mr. Trump’s win.

The industry is looking forward to Mr. Trump replacing Lina Khan, the chair of the Federal Trade Commission, as he is expected to do. She has been aggressive in taking on big business, including pharma.

The industry is also hopeful that Trump could help reverse its worst policy defeat in recent memory. Under the 2022 Inflation Reduction Act, President Biden’s signature policy achievement, Democratic lawmakers empowered Medicare to directly negotiate the prices of certain prescription drugs — cutting into manufacturers’ profits and raising the specter of similar price cuts in the commercial market. Republicans in Congress have said that they want to repeal the negotiation program.