Kenvue Navigates Acetaminophen Controversy: Assessing Risk Mitigation and Investor Confidence in a Shifting Landscape

The pharmaceutical and consumer health sectors are no strangers to regulatory scrutiny, but Kenvue’s recent challenges surrounding acetaminophen (Tylenol) use during pregnancy have placed the company at the intersection of scientific debate, legal liability, and investor uncertainty. As concerns mount over potential links between prenatal acetaminophen exposure and neurodevelopmental disorders like autism spectrum disorder (ASD) and attention-deficit/hyperactivity disorder (ADHD), Kenvue faces a dual threat: reputational damage and financial exposure from mounting litigation. This analysis evaluates Kenvue’s strategic positioning amid these risks, focusing on its risk mitigation efforts, legal defenses, and communication strategies to restore investor confidence.

Regulatory and Legal Challenges: A Fractured Landscape

The controversy began gaining momentum in 2024-2025 as studies highlighted associations between acetaminophen use during pregnancy and increased ASD/ADHD risks in children. A systematic review of 46 studies involving over 100,000 participants found 27 studies reporting a positive link, with better-designed studies more likely to show significant associations [4]. These findings fueled lawsuits alleging that Kenvue and other manufacturers failed to warn consumers about potential risks [2]. By late 2025, thousands of cases had been filed, with plaintiffs arguing that acetaminophen’s safety profile during pregnancy was overstated [1].

Legal outcomes have been mixed. A federal judge dismissed multidistrict litigation in December 2023, excluding plaintiffs’ expert witnesses under the Daubert standard [1]. However, state-level cases persist, including a high-profile trial scheduled for April 2025 [2]. The anticipated HHS report by Secretary Robert F. Kennedy Jr., which reportedly links acetaminophen use during pregnancy to autism—particularly when combined with low folate levels—has further destabilized the situation. Shares of Kenvue plummeted over 14% in August 2025 following early reports of the study, despite the company’s insistence that “scientific consensus shows no causal link” [3].

Kenvue’s Risk Mitigation Strategies: Defending the Status Quo

Kenvue’s response has centered on three pillars: scientific advocacy, legal defense, and public relations. The company has consistently aligned itself with the U.S. Food and Drug Administration (FDA) and the American College of Obstetricians and Gynecologists (ACOG), both of which affirm acetaminophen’s safety when used as directed during pregnancy [2]. A 2024 JAMA study, which found no association between acetaminophen use and neurodevelopmental disorders in sibling-controlled analyses, has been cited by Kenvue to counter claims of causality [1].

Legally, Kenvue has leveraged judicial dismissals to its advantage. The company celebrated a December 2023 federal ruling that invalidated key expert testimony in multidistrict litigation, framing it as validation of its product’s safety [3]. However, this strategy faces headwinds as state courts apply less stringent standards for admissibility, allowing plaintiffs to pursue claims based on observational studies [1].

Publicly, Kenvue has emphasized collaboration with regulatory bodies and consumer education. A spokesperson stated, “We encourage pregnant women to consult healthcare providers before taking any medication,” aligning with ACOG guidelines [2]. Yet, critics argue that the company has avoided proactive label changes or warnings, despite growing evidence of potential risks [4].

Investor Confidence: A Market in Turmoil

The stock market’s reaction to these developments underscores investor skepticism. Kenvue’s shares hit a one-year low in September 2025, with the stock down over 18% year-to-date [2]. Analysts attribute this to fears of reputational damage, potential settlements, and regulatory overhauls. A Bloomberg report noted that the “pending HHS report has created a toxic mix of uncertainty,” with investors pricing in worst-case scenarios [1].

However, Kenvue’s long-term prospects may hinge on its ability to navigate this crisis. The company’s strong balance sheet and dominance in the OTC analgesic market provide a buffer against short-term volatility. Moreover, acetaminophen remains the preferred pain reliever during pregnancy due to its overall safety profile, a fact Kenvue has leveraged in its messaging [4].

The Path Forward: Balancing Science, Law, and Trust

Kenvue’s strategic positioning will depend on three factors:
1. Regulatory Clarity: The release of Kennedy’s HHS report in late 2025 could redefine the regulatory landscape. If the study confirms a link between acetaminophen and neurodevelopmental risks, Kenvue may face mandatory label changes and stricter usage guidelines.
2. Legal Resilience: The outcome of the Second Circuit Court’s appeal of the MDL dismissal and state-level trials will determine the scale of financial exposure. Kenvue’s legal team must prepare for worst-case scenarios while emphasizing scientific rigor.
3. Public Perception: Proactive measures—such as funding independent research, updating product labels, or promoting non-pharmacological pain management alternatives—could help rebuild trust [4].

Conclusion

Kenvue’s current challenges reflect a broader tension between pharmaceutical innovation and public health accountability. While the company has defended its product with scientific and legal arguments, the growing body of evidence and public concern demands a more adaptive approach. For investors, the key question is whether Kenvue can balance its defense of acetaminophen’s safety with proactive risk mitigation. Until then, the stock remains a high-volatility play, with outcomes hinging on regulatory, legal, and scientific developments in the coming months.

**Source:[1] Tylenol Autism Lawsuit Settlements | July 2025 Update [https://lawsuitlegalnews.com/tylenol-autism-lawsuit/][2] Acetaminophen Use During Pregnancy and Children's Risk of Neurodevelopmental Disorders [https://jamanetwork.com/journals/jama/fullarticle/2817406][3] J&J Spinoff Kenvue Defeats Suits Alleging Tylenol Causes ... [https://www.bloomberg.com/news/articles/2023-12-19/j-j-spinoff-kenvue-defeats-suits-alleging-tylenol-causes-autism][4] New data link acetaminophen use during pregnancy to ADHD, autism in kids [https://www.healio.com/news/primary-care/20250815/new-data-link-acetaminophen-use-during-pregnancy-to-adhd-autism-in-kids]