The Trump administration’s campaign against prenatal Tylenol use has fueled a steep sell-off in Kenvue (NYSE: KVUE), the drugmaker behind the household pain reliever. Despite the absence of verified scientific evidence, investors are fleeing the stock amid fears of growing regulatory, legal, and consumer risks.
Kenvue, the consumer health spinoff of Johnson & Johnson, owns a portfolio of well-known over-the-counter brands, including Tylenol (acetaminophen), Motrin, Zyrtec, Benadryl, and Listerine.
Since debuting as a standalone company in 2023, Kenvue’s shares have struggled to gain traction. Over the past two months alone, the stock has lost roughly one-third of its value, erasing about $15 billion in market capitalization.
Much of the earlier weakness stemmed from soft demand across some product lines, pricing pressures, and mixed earnings forecasts.
However, sentiment turned sharply negative after the White House and Health Secretary Robert F. Kennedy Jr. suggested a possible link between prenatal acetaminophen use and autism in children — a claim that remains unsubstantiated by leading medical authorities.
“Don’t take Tylenol,” Trump warned pregnant women during a recent White House press conference.
Kenvue swiftly rejected the allegation, saying in a statement that “sound science clearly shows that taking acetaminophen does not cause autism.”
Even so, the U.S. Food and Drug Administration (FDA) announced plans to update acetaminophen warning labels to “reflect evidence” of potential risks related to prenatal use, including neurological conditions such as autism and ADHD — a move seen as precautionary rather than conclusive.
On Wall Street, however, perception often outweighs fundamentals. The controversy has cast a long shadow over Kenvue’s brand reputation, threatening its most recognizable product line and setting the stage for a prolonged period of investor skepticism.
Kenvue has lost the narrative
Although Kenvue swiftly responded to the Trump administration’s claims, its statement — while scientifically accurate — was seen as reactive.
In a politically charged environment, such a response can backfire if it comes across as dismissive. The company also failed to proactively mobilize independent experts, such as pediatricians, medical associations, or academic researchers, to amplify its position and reassure the public.
In reality, Kenvue had a stronger foundation to challenge the allegations and get ahead of the story before it morphed into a broader crisis. In 2023, a federal judge dismissed a class-action lawsuit linking Tylenol to autism and ADHD, citing insufficient scientific evidence and flawed methodologies.
According to Citi analysts, that precedent suggests “limited judicial risk” following the Trump administration’s claims, even as public and political scrutiny intensifies.
Still, Kenvue faces a clear business risk. Citi estimates that Tylenol accounts for roughly 10% of the company’s global revenue and as much as 15% of operating profit — meaning even modest declines in consumer trust or sales could materially impact earnings.
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