• President-elect Trump wants Robert F. Kennedy Jr. to be in charge of Health and Human Services.

• Kennedy made big promises to fight obesity with food rather than the popular GLP-1 drugs.

• Startups focused on functional medicine are already experiencing investment declines.

Nomination proposed by Robert F. Kennedy Jr. running the U.S. Department of Health and Human Services could have far-reaching consequences for a booming weight-loss market.

The healthcare sector is torn apart on what Trump’s second term could mean for patient access – and for investors’ wallets – as the president-elect’s priorities emerge.

Now that Kennedy is charged with overseeing federal health agencies, he is widely critical ofincluding the National Institutes of Health and the Food and Drug Administration, obesity appears to be at the top of the list.

Before his nomination, Kennedy laid out the overall to-do list for his “Make America Healthy Again” platform in a Post from November 6 on X. In addition to promising to “clean up corruption” within federal health agencies, he said he had been tapped by Trump to end the chronic disease epidemic. And he vowed to take on the processed food industry and big pharmaceutical companies to put healthy eating at the forefront for Americans.

Kennedy still needs to be confirmed by the Senate, which could be a daunting task. His story of health conspiracy theoriesincluding vaccine skepticism, has sparked concern among some lawmakers and industry executives.

His likely appointment comes at a pivotal time for the weight loss industry, as long-running shortages of drugs like Ozempic come to an end. Kennedy attacked Ozempic’s maker, Novo Nordisk, in a Post X of September 26emphasizing his plan to tackle a “sick food system” rather than “pleasing the wallets of distant executives from big pharma”. (Novo shares fell more than 4% following the announcement of Kennedy’s nomination.)

Here’s what his positions could mean for companies fighting obesity through everything from lifestyle changes to medications.

Food as medicine could experience a funding frenzy

Encouraging healthy eating is at the heart of Kennedy’s agenda, an approach reminiscent of that of the Obama administration.

Some companies that rely on this mission are already seeing the ripple effects of his appointment. Ashley Tyrner-Dolce, CEO of FarmboxRx, said she received two cold emails from venture capital firms Friday morning following the news, asking if the startup was raising money.

When Farmbox launched in 2014 to offer healthy food boxes and educate consumers about nutrition, “no one wanted to invest in us,” Tyrner-Dolce said. FarmboxRx ultimately never raised venture capital, choosing instead to bootstrap; the startup would have brought $35 million of turnover in 2022.

Now, Tyrner-Dolce said, “I think you’re going to see a wave of startups coming into the food-as-medicine space.”

Tyrner-Dolce said she hopes Kennedy will encourage more insurance coverage for food-as-medicine preventive care approaches, including through her role overseeing the Centers for Medicare and Medicaid Services.

Promise to eliminate ‘conflict of interest’ in food policy is complicated

Kennedy campaigned to eliminate artificial colors in your Fruit Loops and upend America’s dietary guidelines, which are due for an update in 2025.

In an opinion piece published in September in the Wall Street Journal, Kennedy said it would “prohibit” members of the Dietary Guidelines Advisory Committee from “making money from food or drug companies.”

This advisory committee, composed largely of university experts in nutrition, industry disclosures. He does not have the final say on the guidelines; the committee only reviews the science behind federal health recommendations. The task of writing the guidelines will fall to federal employees at the Department of Health and Human Services as well as the U.S. Department of Agriculture, an agency Kennedy would not oversee in his new role.

Still, Kennedy’s proposed shakeup is good news for companies like Zero Acre, a line of alternative cooking oils used by Chipotle and Shake Shack. CEO and co-founder Jeff Nobbs told Business Insider that there are “a lot of things that seem strange” about the way the dietary guidelines are written, including the mention of vegetable oil as a “central component” of a healthy diet.

“The more we can eliminate any conflicts of interest so that we have a direct connection between what the science says and the food guidelines, policies and regulations that are actually implemented, the better,” Nobbs told Business Insider.

Kennedy campaigned vehemently against “seed oils” like canola and soybean oil that are often used in deep fryers and processed foods, and even developed a line of t-shirts and red hats dedicated to “make suet again with frying oil”. Experts say the Internet furor over “seed oils” is unscientific and avoids larger forces that shape what we eat and how that influences health outcomes.

Kennedy’s crusade against Big Food could clashing with Trump’s pro-corporation agendaHowever. This seems at odds with some of the president-elect’s favorite food groups, like KFC and McDonald’s. Kennedy was recently photographed smiling and picking up what appeared to be a Big Mac on Trump’s campaign plane, sharing a table with Trump, Elon Musk and Donald Trump Jr., who joked in an accompanying X-post“Make America Healthy Again starts TOMORROW.”

“Country food is always badbut the food that comes on that plane is like poison,” Kennedy told podcaster Joe Polish. “You have a choice between – you have no choice, you’re either given KFC or Big Macs.”

Weight-loss companies could attract more attention – at a cost

Kennedy’s emphasis on holistic chronic disease care, including obesity care, could lead to a new rush for funding in this area.

Likely reductions Federal funding for Medicaid under a second Trump administration and potential crackdowns on weight-loss drugs, however, could limit patients’ access to such care, said Brooke Boyarsky Pratt, CEO of the obesity care startup. Knownwell.

Kennedy has previously criticized government efforts to pay for expensive GLP-1 drugs.

“We spend $1,600 a month on this drug. A bill is currently before Congress that will make it available to anyone who is overweight, or 74 percent of the American population,” he said during a appearance on Fox News in October. “That alone will cost $3 trillion a year. If we spend about a fifth of that amount to give good food, three meals a day to every man, woman and child in our country, we can solve the day following the epidemic of obesity and diabetes for a number of years.

The bill Kennedy referenced, the Treat and Reduction Obesity Act, would allow Medicare to cover GLP-1s for weight loss, a move Kennedy indicated he would oppose.

Pratt also said she was concerned that Kennedy’s battle with the FDA could prevent FDA oversight of compounding pharmacies making copied versions of GLP-1 drugs. Knownwell prescribes GLP-1s to his patients when appropriate, but does not prescribe compounded versions, which are not approved by the FDA, Pratt said.

Legally, compounding pharmacies are only allowed to sell recreational drugs when those drugs are in shortage, a regulation enforced by the FDA. If Kennedy decides to downsize the FDA and go after big pharmaceutical companies, it’s unclear what impact that might have on this application.

Drugmakers and their benefactors will be under pressure

News of Kennedy’s nomination hit drugmakers across the board, particularly vaccine makers. Covid-19 vaccine maker Moderna saw the steepest decline, with its shares falling nearly 6% in after-hours trading following the announcement. (Its stock has since rebounded.)

Some biopharmaceutical startups and investors, particularly those focused on chronic diseases, are getting nervous. John Stanford, executive director of Incubate Coalition, a Washington-based group of life sciences investors, said investors worry about fewer exits if big drug companies have less funds to make acquisitions.

“If large manufacturers are hit by bad policy, that will have immediate consequences on our ability to exit our funds and redeploy our capital, and we are already seeing that happening,” he said. “If this scares everyone, it will have a downstream effect on the investment community in the early-stage ecosystem.”

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