Kenvue Inc. (Stock Ticker: KVUE) shares dropped sharply this week following reports that the White House may issue new health guidance warning against the use of acetaminophen during pregnancy. The active ingredient in Tylenol, acetaminophen is one of Kenvue’s most important revenue drivers — and the potential fallout could be substantial.

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White House Expected to Issue Warning on Acetaminophen Use in Pregnancy

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According to reporting from The Washington Post, the Biden administration is preparing to release guidance cautioning pregnant women to avoid acetaminophen unless treating a fever, citing studies that may suggest a link between prenatal use and increased autism risk in children.
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The announcement is expected to come from Health and Human Services Secretary Robert F. Kennedy Jr., and may also include recommendations around leucovorin, a lesser-known drug often used to treat vitamin B9 deficiency, as a potential treatment pathway.

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Kenvue Pushes Back Against Autism Link

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Kenvue responded swiftly and forcefully to the news, disputing any scientific credibility behind the reported link. In a public statement, the company emphasized:
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“We believe independent, sound science clearly shows that taking acetaminophen does not cause autism.”
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The company also warned that overly cautious government messaging could discourage safe and effective treatments, posing new risks for expectant mothers who rely on over-the-counter medication to manage pain and fever during pregnancy.

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Why the Market Reacted So Fast for Kenvue

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Despite Kenvue’s rebuttal, investors wasted no time in reacting. The stock dropped as much as 9–10% intraday following the news and remains down approximately 13% year-to-date. Over the past 12 months, Kenvue shares have lost nearly 20%, reflecting ongoing pressure across its consumer health business.
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This sudden stock plunge reflects more than just fear over reputational damage. Tylenol alone is estimated to generate nearly $1 billion annually for Kenvue — accounting for 8–9% of the company’s total global revenue, which stands at approximately $15 billion. If sales of Tylenol decline due to regulatory changes or consumer backlash, the hit to Kenvue’s top and bottom line could be significant.

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Legal and Regulatory Risk Looms Large

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The potential consequences extend far beyond near-term sales. If the U.S. government draws a stronger causal connection between acetaminophen and autism, Kenvue could face a wave of litigation. Medical lawsuits tied to prenatal exposure could run into the billions of dollars, especially if similar warnings are adopted globally or if class-action cases emerge.
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Kenvue is already under pressure from its most recent financial results:
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• Q2 2025 Net Sales: Down 4% year-over-year
• Organic Sales: Fell by over 4%
• Gross Margins: Slight decline
• Outlook: Management revised its 2025 guidance downward, citing volume softness, currency headwinds, and overall consumer weakness.
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Investors are understandably nervous about adding major regulatory and legal risks to an already struggling business.

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What's Next for Kenvue and Tylenol?

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Much hinges on the specific language and framing of the expected White House announcement. If the guidance uses definitive language — such as directly attributing autism causality to acetaminophen — it could trigger a domino effect:
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• Consumer hesitation and demand drop
• Labeling and packaging changes
• Retailer reassessments
• Downgrades from analysts and institutions
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In fact, some analysts have already begun cutting their ratings on Kenvue, and further revisions seem likely depending on how the guidance is interpreted by both the public and the legal system.

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Tylenol’s Troubles Could Reshape Kenvue’s Outlook

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This is no minor reputational scare. With Tylenol serving as a cornerstone of Kenvue’s portfolio, any government warning — no matter how carefully worded — risks triggering a multi-front challenge spanning consumer confidence, legal exposure, and financial performance.

While the full impact will depend on forthcoming federal guidance, one thing is already clear: investors are no longer pricing in business as usual.

Kenvue’s next moves — both in public relations and courtroom strategy — will be critical in determining whether this crisis remains a headline or becomes a long-term headwind.

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