Robert F. Kennedy as US health tsar might be a red tape win, Sonic Healthcare says

The mooted ascension of prominent anti-vaxxer Robert F. Kennedy Jr to US Secretary of Health could be a positive for Sonic Healthcare.

Incoming US president Donald Trump with Robert F. Kennedy Jr., who has been nominated as the next health secretary.

The Trump presidency and mooted ascension of prominent vaccination opponent Robert F. Kennedy Junior to head the US Department of Health and Human Services will not be a negative for Sonic Healthcare, and could actually bring some benefits, managing director Colin Goldschmidt says.

This would place the company’s fortunes in sharp opposition to other large health sciences companies such as CSL in Australia and vaccine manufacturers Moderna and Pfizer in the US, which have all experienced share price drops on the news that Mr Kennedy had been picked for the role in president-elect Donald Trump’s new Cabinet.

While his appointment still needs to be confirmed by the US Senate, Mr Kennedy’s history of challenging the efficacy and safety of vaccines has sent shockwaves through the pharmaceutical industry, with fears childhood vaccine mandates could be at risk, new vaccines might face difficulty gaining approvals and new and untested treatments might be allowed to flourish.

Speaking at the company’s annual general meeting on Tuesday. Dr Goldschmidt said Sonic, with its focus on pathology services, radiology and primary care, would likely not face any downside from the change of government and Mr Kennedy’s appointment.

“We don’t feel that there will be any significant change, and certainly nothing negative,’’ Dr Goldschmidt said.

“There could be some positives for us. The vaccine issue won’t affect us at all, but the relaxation of some of the bureaucracy in the FDA (Food and Drug Administration) and other health departments could be beneficial to us, particularly in the sanctioning of what they call lab-developed tests.’’

Dr Goldschmidt said the FDA was currently looking at a crackdown on lab-developed tests which would make it almost impossible to offer them, despite the tests having been “a stock standard thing in the US market for some years’’.

“We understand that a Trump administration will relax that completely, which will be much to the joy of all labs in the US and to the benefit of the general population,’’ he said.

Dr Goldschmidt said such tests were thoroughly tested before they were released, but “we’re looking down the barrel of that not being possible, and we think that this will be rescinded, so we think it’s a positive overall’’.

Dr Goldschmidt said that four months into the financial year, Sonic was tracking at more than 10 per cent growth in EBITDA over the prior corresponding period, which if maintained would deliver a result at the top end of the company’s earnings guidance.

While the company’s margins were still sitting below FY19 levels – the last comparable pre-pandemic year – Dr Goldschmidt said Sonic had embarked on a major project more than a year ago to address this issue.

“The initial outcomes are beginning to come through in this financial year, and we are confident they are going to gain momentum in FY26 and beyond,” Dr Goldschmidt said.

“This project has got two major prongs. One is to maintain strong top line growth, and the other is at the cost management side.

“In terms of the top line … we’re fortunate to be enjoying strong revenue growth.”

Dr Goldschmidt also reiterated the pathology industry’s call for indexation of government payments for pathology services, which he said have not increased in 20 years, warning that if nothing is done, gap payments for patients will need to be introduced.

Sonic shares were trading 6.3 per cent higher on Tuesday afternoon, at $27.84.