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Robert F. Kennedy Jr., nominated by U.S. President-elect Donald Trump to lead the Department of Health and Human Services (HHS), is set to undergo two days of Senate confirmation hearings this week. His selection has sparked significant interest, particularly among a range of startups focused on health and nutrition initiatives.
Kennedy will first appear before the Senate Finance Committee on Wednesday. As the prospective head of HHS, he would manage an extensive budget exceeding $2 trillion, influencing various areas including drug evaluation processes as well as the Medicare and Medicaid programs.
His controversial views on vaccines and documented financial gains from anti-vaccine legal battles are expected to be focal points during the hearings, drawing scrutiny from both political parties that have raised concerns about his perspectives.
Kennedy has committed to prioritizing nutritious food over pharmaceuticals in efforts to address chronic disease within the United States. Amid looming cuts to the federal-state Medicaid program, advocates within the food-based healthcare industry are optimistic that Kennedy’s aim to “Make America Healthy Again” will enhance support for nutrition-related initiatives and protect these vital programs from budget reductions.
Ashley Tyrner-Dolce, CEO of FarmBoxRx, a startup partnering with Medicaid and Medicare Advantage plans to deliver healthy food, articulated the sentiment: “There is an anticipation that this administration will finally examine why so many Americans are facing health issues.”
In light of rising obesity and Type 2 diabetes rates, state Medicaid programs have increasingly adopted proactive nutritional counseling strategies, mirroring efforts seen in the private sector over the last decade.
During the previous Trump administration, HHS encouraged states to address social determinants of health, such as food insecurity and disparities in health access. A number of states secured 1115 Medicaid demonstration waivers, allowing them to implement nutritional programs as preventive health measures, which in turn helped stimulate investment in this sector.
Over the past four years, more than 50 food-as-medicine companies have accumulated over $2 billion in funding from venture capitalists including Khosla Ventures and Andreessen Horowitz, as well as healthcare giants like CVS Health, according to figures from Rock Health Advisory.
Investment in food-as-medicine initiatives soared in 2024, reaching over $483 million—an increase of 175% from the previous year. A highlight of this trend was the $200 million funding round secured by telenutrition company FoodSmart, led by TPG’s Rise Fund.
Companies within the food-as-medicine domain view Kennedy as a potential advocate in their efforts to gain traction in government health programs.
In a recent interview with NPR, Kennedy shared that his directives from Trump include a focus on eliminating corruption in regulatory bodies, restoring health agencies to rely on evidence-based guidelines, and addressing chronic diseases directly.
“The goal is to significantly diminish the chronic disease epidemic within two years,” Kennedy stated.
Growth of food programs in Medicaid
The demand for nutrition and food assistance programs has surged over the past five years. By the conclusion of the Biden administration, 20 states and Washington, D.C., had achieved waivers from the Centers for Medicare and Medicaid Services, facilitating the growth of startups catering to government health plans.
“There is considerably more interest from payers regarding how food interventions can enhance patient outcomes while simultaneously lowering costs than there was a decade ago,” noted Sanjeev Krishnan, managing partner at S2G Ventures, a fund founded by Walmart heir Lukas Walton.
S2G has backed several food-as-medicine startups, including NourishedRx, a digital nutrition service that integrates food deliveries with health coaching for Medicaid and Medicare participants.
“To effectively assist individuals who are most in need—such as those who are nutritionally insecure and suffer from diet-related illnesses—we’ve had to collaborate with government payers,” explained NourishedRx’s CEO Lauren Driscoll, emphasizing the time and effort required to build a robust operational foundation.
“We conducted pilot programs to demonstrate efficacy, and now we are transitioning to recurring revenue and expanding contracts,” she added.
Reaching an inflection point
Kennedy’s emphasis on dietary solutions may further galvanize investor interest in this emerging market.
Chris Lew, a principal at Rock Health’s consulting branch, suggested that proposed initiatives from the incoming HHS administration aimed at broadening the scope of covered nutritional services and increasing funding for medical nutrition research could invigorate investor enthusiasm in this domain.
Dr. Jason Langheier, CEO of FoodSmart, highlighted that the escalating costs associated with diabetes and weight loss medications drive heightened interest in nutrition programs, in addition to Medicaid waivers and supportive policy changes regarding nutrition aid coverage.
“Food care providers will now have the opportunity to collaborate with states to establish programs with a clear return on investment for both the state and health plans, particularly in light of the growing financial strain from high expenditures on GLP-1 medications,” Langheier stated.
In late November, the Biden administration proposed extending coverage to high-profile anti-obesity medications like Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound for Medicaid and Medicare beneficiaries.
If confirmed, Kennedy is likely to oppose this expansion of GLP-1 coverage due to his criticism of these costly drugs, a sentiment that may resonate with the Trump administration given the anticipated financial implications, which could reach $35 billion from 2026 to 2034 according to the Congressional Budget Office.
Regardless of Kennedy’s confirmation status, Krishnan observed that the U.S. faces a significant reckoning concerning healthcare spending, and food-related programs have the potential to substantially mitigate preventable health issues.
“A serious dialogue is imminent regarding healthcare expenditures and how to achieve optimal outcomes for patients without overburdening federal budgeting,” he remarked.
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