Key Questions: What Does MAHA Mean for Healthcare and Consumer Staples Companies?

Since the beginning of the year, the administration has launched a sweeping overhaul of the U.S. healthcare system. The Make America Healthy Again (MAHA) initiative is not only disrupting public health institutions but also sending shockwaves through the healthcare and consumer staples sectors.

From vaccine policy to food safety, the administration’s reforms are challenging long-standing norms and have the potential to create new winners and losers in the market. Here’s how these policies are reshaping the investing landscape.

Vaccine and FDA Overhaul

Numerous administration officials have proposed or enacted policy shifts concerning vaccines that are rattling the pharmaceutical sector. While we view vaccine bans as highly unlikely, the vaccine industry is undergoing immense change. From reorganization of the Centers for Disease Control & Prevention (CDC) Advisory Committee on Immunization Practices to a call for more transparency in post-market surveillance, the status quo that has been in place for decades is now being challenged. 

These moves have introduced regulatory uncertainty for vaccine manufacturers. While vaccine revenue is not typically the lion’s share of large pharmaceutical companies’ total sales, it may have an outsized impact on industry sentiment, depressing valuation multiples as outlooks dim. 

Federal Drug Administration (FDA) reforms include eliminating user fees to reduce pharmaceutical influence, increasing scrutiny of psychiatric medications and weight-loss drugs for children, and potentially eliminating the ability of pharmaceutical companies to advertise directly to consumers. These changes could both slow drug approvals and shift focus toward natural and integrative therapies. The timelines for drug approvals are already long and unpredictable, so increased scrutiny could impact the calculus on which drugs move forward in the development process.

NIH Cuts and the Biotech Squeeze

In addition to changes regarding our country’s vaccine policy, The National Institutes of Health (NIH) is redirecting funding away from infectious disease research toward chronic illness, mental health, and environmental health. This shift could slow the pipeline for early-stage biotech firms that rely on NIH grants and partnerships. In addition to the influence on biotech companies, those that provide tools and services to them may be impacted as well. While the size of the spending cuts is still murky, one thing is clear: the industry will have to adapt to learn to do more with less going forward. Later-stage companies with other funding sources may be better positioned for now, but the long-term acquisition pipeline may shrink as there may be fewer innovative therapies being researched at government and/or academic institutions.

Centers for Medicare & Medicaid Services (CMS) Overhaul: A Pivot to Prevention

The Administration is restructuring Health & Human Services (HHS) organizations under a new umbrella agency called the Administration for a Healthy America. The focus is on promoting value-based care and preventive medicine, encouraging non-pharmaceutical interventions for chronic disease, and reevaluating reimbursement models to favor nutrition, lifestyle, and behavioral health. This could benefit companies in remote monitoring, home health, and digital therapeutics, while challenging traditional hospital systems and pharmaceutical-heavy care models. 

As part of this preventive approach, HHS has embraced wearable health tracking devices as tools for empowering individuals and reducing chronic disease. The administration is exploring partnerships to integrate wearables into public health programs, especially for metabolic health and mental wellness. Both consumer-facing and FDA-cleared devices may be well-positioned for growth as government support increases demand. 

Food Policy and Functional Health: A New Frontier

At the core of Make America Healthy Again is food policy, with an identified area for improvement clearly stated as “poor diet.” MAHA states directly that “the American diet has shifted dramatically toward ultra-processed foods (UPFs), leading to nutrient depletion, increased caloric intake, and exposure to harmful additives.” In response, the U.S. government is calling for the banning of additives, chemicals, and food dyes. Additionally, limiting ultra-processed foods, updating the criteria for “healthy” foods, and improving nutritional labeling has also been proposed. This initiative to improve food quality and policy is also not just limited to the HHS Secretary — there has been increasing momentum in bipartisan support, furthering the prospects for change to be successful. 

The potential for an updated food policy has led food producers to be proactive. Companies are now prioritizing reformulation, in place of innovation, in product portfolios to ensure compliance with potential policy updates. For example, with food dye additives being targeted, companies have been discussing the reformulation of colors, utilizing natural color while attempting to maintain the intended flavor. However, sometimes, this is easier said than done. In certain cases, a quick fix may be possible, but in others, a natural replacement may be difficult to obtain, or trials may take significant time to replicate the intended flavor. 

As of right now, being proactive is a good approach, but this does not mean food producers will not face further headwinds from the new policy. The U.S. government could force high transition costs through aggressive timelines, implemented tax incentives for healthy products, or high penalties for noncompliance. In a more rigid timeline for change, this could result in food companies facing increasing incremental costs to doing business, hampering growth and margins. Investors will need to distinguish which food producers are best positioned to adapt to this changing environment.

Conclusion: A New Era for Healthcare Investing

New leadership at the HHS is redefining the healthcare investment landscape. While these policies introduce uncertainty in traditional sectors like vaccines and biotech R&D, they also open new opportunities in digital health, preventive care, and wellness. As the MAHA agenda unfolds, investors who understand the policy landscape will be best positioned to navigate the risks — and capitalize on the opportunities — of this healthcare revolution.

For more information, please contact your advisor.