As Robert F. Kennedy Jr. prepares to undergo two days of Senate confirmation hearings for his nomination as Secretary of Health and Human Services, a specialized group of startups is keenly observing the proceedings.
Kennedy, a controversial choice for President Donald Trump's Cabinet, is set to appear before the Senate Finance Committee on Wednesday. If confirmed, Kennedy would manage a budget exceeding $2 trillion, encompassing everything from drug research and approvals to the Medicare and Medicaid health programs.
Kennedy's dubious stance on vaccines, coupled with records revealing his financial gain from anti-vaccine lawsuits, is expected to be a focal point of the hearings. His position has drawn criticism from both political spectrums. According to CNBC, Kennedy has committed to prioritizing nutritious food over drugs in the fight against chronic disease in the U.S. As Republicans eye the federal-state Medicaid program for potential funding cuts, some investors and nutrition-based service startups covered by Medicaid are hopeful that Kennedy's pledge to "Make America Healthy Again" will stimulate the food-as-medicine sector and safeguard these burgeoning programs from the Trump administration's budget cuts.
Ashley Tyrner-Dolce, CEO of FarmBoxRx, a startup that collaborates with Medicaid and Medicare Advantage plans to deliver nutritious food packages to patients, stated, "I actually think all signs are pointing to with this administration we are going to take a look finally at the reasons ... why individuals are as sick as they are."
As obesity and Type 2 diabetes rates surge in the U.S., state Medicaid programs have been exploring active nutritional counseling to help members combat these chronic conditions, mirroring strategies employed by large employers and commercial insurance plans over the past decade. During Trump's first term, the Department of Health and Human Services encouraged states to address social needs such as food insecurity and health disparities. A select number of states received an 1115 Medicaid demonstration waiver to offer nutritional programs as a form of preventive care, attracting significant investment in the process.
Over the past four years, more than 50 food-as-medicine companies have raised over $2 billion from venture capital firms, including Khosla Ventures and Andreessen Horowitz, along with healthcare entities such as CVS Health, as reported by Rock Health Advisory. Funding for food-as-medicine deals peaked at $483 million in 2024, marking a 175% increase from the previous year. In one of the most substantial deals of the year, telenutrition startup FoodSmart secured $200 million in venture funding led by TPG's Rise Fund.
Food-as-medicine companies now view Kennedy as a potential ally. In an interview with NPR, Kennedy revealed that Trump had given him "three instructions" for his role as HHS secretary: eradicate corruption and conflicts in regulatory agencies, restore health agencies to the "gold standard" of evidence-based science, and address chronic conditions. "He wants to end the chronic disease epidemic with measurable impacts on a diminishment of chronic disease within two years," Kennedy stated.
The demand for food and nutrition programs has significantly increased over the past five years, with 20 states and Washington, D.C., approved for waivers by the end of the Biden administration, according to the Centers for Medicare and Medicaid Services. This has catalyzed the growth of startups dedicated to serving government health plans.
Sanjeev Krishnan, managing partner at S2G Ventures, a venture capital fund founded by Walmart heir Lukas Walton, noted, "There's significantly more interest by payers, in terms of how they can use food interventions to both improve patient lives and then reduce cost," than there was a decade ago. S2G has funded five food-as-medicine startups, including NourishedRx, a digital nutrition company that combines food deliveries with health coaching for patients in Medicaid and Medicare plans.
NourishedRx founder and CEO Lauren Driscoll stated, "To really be able to help the people who need it the most, those who are socially vulnerable, nutrition insecure, who also have diet-related disease, we had to work through the [government] payers." She added that it has taken time to build momentum, stating, "We had to do pilots and drive proof points, and now we are entering into recurring revenue, renewable and expanding contracts."
Kennedy's advocacy for a diet-focused approach to treating chronic conditions, rather than relying on medicine, may further ignite investor enthusiasm about this expanding sector. Chris Lew, a principal with Rock Health's consulting team, said, "Proposals from the incoming HHS administration to expand coverage of healthy foods and nutrition services as medical benefits and increase research funding for medical nutrition are likely to continue propelling investor enthusiasm in the space."
FoodSmart CEO Dr. Jason Langheier suggested that the high cost of diabetes and weight loss drugs is fueling interest in food programs, as much as Medicaid waivers and policy initiatives that have expanded coverage of nutrition aid. "Food care providers will now have ... an opportunity to work with the state, to create a program that's driven off a return on investment for the state and the health plans, to actually help people at scale especially because of the pressure being put on them for their spending on GLP-1s, which has grown to astronomical levels," said Langheier.
In late November, the Biden administration proposed extending coverage of breakthrough anti-obesity drugs such as Novo Nordisk's Wegovy and Eli Lilly's Zepbound to Medicaid and Medicare patients. However, if confirmed, Kennedy is likely to oppose the expansion of GLP-1 coverage, given his outspoken criticism of these expensive weight loss drugs. The proposal is also likely to be rejected by the Trump administration due to its cost, which the Congressional Budget Office estimates would be $35 billion from 2026 to 2034.
Regardless of Kennedy's confirmation, Krishnan of S2G believes the U.S. is heading towards a fiscal reckoning on healthcare spending, and food programs can play a crucial role in reducing preventable disease. "We're going to have a real sort of conversation on health care, and how do we get ideal outcomes for patients, but also not have the entire budget or significant portion of the U.S. budget focused on health care," he said. This perspective underscores the potential for food-as-medicine initiatives to transform healthcare, particularly in the context of chronic disease management.
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