Investing.com — Healthcare stocks in the U.S. and Europe have tumbled since Donald Trump’s election victory on November 5, with concerns rising over the potential policy impact of his cabinet picks, according to Barclays (LON:BARC).
The sector has underperformed broader indices, with the U.S. healthcare ETF lagging the S&P 500 by around 7%, while European healthcare stocks have trailed the broader European index by about 1.5%.
The nomination of Robert F. Kennedy Jr. to lead the Department of Health and Human Services (HHS) has sparked sharp reactions, especially in pharmaceutical and biotech stocks.
Kennedy, known for his vaccine skepticism and criticism of obesity drugs, has caused concern over potential regulatory headwinds.
Kennedy’s statements against GLP-1 drugs for obesity, vaccines, and broader FDA policies have raised alarms.
Though analysts at Barclays say these views may be challenging to translate into actionable policy.
On Obesity treatments, the medicare’s coverage of GLP-1 drugs like Novo Nordisk (NYSE:NVO)'s semaglutide is currently limited to patients with documented cardiovascular risks under the SELECT trial criteria. Expanding coverage would require legislative changes under the Treat and Reduce Obesity Act (TROA).
Barclays views the commercial market, rather than Medicaid or Medicare, as the primary growth driver for anti-obesity medications.
While on vaccine policies, Kennedy’s history of anti-vaccine advocacy has amplified skepticism among investors.
Barclays highlights Novo Nordisk and Sanofi (NASDAQ:SNY) as stocks that have been “unduly punished” in response to Kennedy's nomination. Barclays has reiterated "overweight" ratings for both companies, viewing the selloff as an overreaction.
Though Barclays notes that while the healthcare sector faces near-term challenges, some subsectors may benefit from clearer policies over time.
Beyond Kennedy’s nomination, Trump’s broader cabinet appointments, including Vivek Ramaswamy to the Department of Government Efficiency, have added to investor concerns about regulatory uncertainty.
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