RFK Jr. wants to crack down on drug ads. That could cripple some broadcasters

CNN

4 hours ago

For decades, pharmaceutical companies have shelled out big bucks to broadcasters to place ads between TV segments. But a pair of policies being considered by US Health and Human Services Secretary Robert F. Kennedy Jr. could change that and leave broadcasters in financial straits.
While not an outright ban, the two policies would make it significantly more difficult and expensive for drug companies to push their products across broadcasters' airwaves, according to a Bloomberg report on Tuesday. The policies look to either mandate that advertisers elaborate on the risks posed by their drugs — forcing ads to be longer and, therefore, more expensive — or bar drugmakers from writing off direct-to-consumer ads as business expenses on their taxes, also padding the bill, Bloomberg reported.
Drug ads, which are illegal in most countries, have been a hallmark of US television since the 1980s. By raising the bar on pharmaceutical ads, the Trump administration threatens a crucial revenue source for broadcasters.
Drug companies spent $5.15 billion on TV ads in 2024, a significant figure considering a recent study found that drugmakers spent almost $14 billion on direct-to-consumer ads in 2023. Despite leaner audience numbers, linear television saw an uptick in pharmaceutical ad buys in 2024, which reached $3.4 billion during the first eight months of 2024, an 8.1% year-over-year increase.
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Sign up here to receive Reliable Sources with Brian Stelter in your inbox.Almost 50% of those drug ads were split across news broadcasters, including MSNBC, CBS News, CNN and Fox News, according to a December report from research firm eMarketer.
Kennedy has long criticized the pharmaceutical industry's ability to directly advertise to consumers, which he argues leads to Americans' greater use of prescription medications. HHS acknowledged it is examining the issue but said no final decisions have been made.
'As Secretary Kennedy has consistently emphasized, direct-to-consumer pharmaceutical advertising must prioritize accuracy, patient safety, and the public interest — not profit margins,' HHS spokesperson Andrew Nixon said in a statement, adding that the department is 'exploring ways to restore more rigorous oversight and improve the quality of information presented to American consumers.'
The Pharmaceutical Research and Manufacturers of America, a main industry trade association known as PhRMA, did not return a request for comment.
The pair of policies would affect broadcasters airing entertainment and news alike. While news broadcasters' finances are buttressed by several sources of income — including ad revenue, licensing fees, cable and satellite fees and digital subscriptions — disincentivizing direct-to-consumer drug ads would harm traditional broadcasters and cable companies. News broadcasters have struggled for years as digital platforms, including social media platforms and streaming giants, have peeled away their ad income.
After Kennedy floated banning drug ads in November, Steve Tomsic, Fox Corporation's chief financial officer, told the UBS Global Media and Communications Conference that 'it would take an enormously draconian ban on it for it to really have an impact.'
'From a quantitative perspective, it's low, single-digit percentage of our overall revenue,' Tomsic said of Fox Corp's drug ads. Fox did not provide a comment for this story at the time of publication.
A CNN spokesperson emphasized the policies would be bad for the industry. Disney, ABC News and MSNBC did not respond when asked how the policies would affect their businesses. NBCUniversal, NBC News, Paramount, CBS News and Warner Bros. Discovery (CNN's parent company) declined to comment.
President Donald Trump has attempted to exert control over drug industry advertising in the past. During his first term, HHS issued a regulation that would have required drug makers to include their list prices in TV ads, but a federal judge nixed the effort, saying the agency had overstepped its authority. It was a centerpiece of Trump's efforts to lower drug prices at the time.
While cutting drug costs is not as high a priority this term, Trump has signed two executive orders that aim to target high drug prices. One of them called for HHS to explore facilitating pharmaceutical companies' ability to directly sell their drugs to patients at the 'most-favored-nation price,' which is tied to lower prices paid in other developed countries.
The Trump administration is not alone in targeting drug ads this term. Just last week, a group of legislators led by Senators Bernie Sanders, an independent from Vermont, and Angus King, an independent from Maine, introduced a bill that looked to ban drugmakers from promoting their products on direct-to-consumer channels. Instead of an outright ban, HHS' policies would strong-arm drug advertisers into submission, avoiding costly legal battles that would play out in the courts.
The US Food and Drug Administration established strict guidelines for TV drug ads in 1985, mandating that they include the drugs' side effects. It wasn't until 1997, when the FDA relaxed its policy, that the ads really took off. There is no cap on how many or how often broadcasters can run drug ads.
Drug stocks dipped following Bloomberg's Tuesday report, with Johnson & Johnson (JNJ) down 2.69 points, Pfizer (PFE) down 0.40 points and AstraZeneca (AZN) down 2.47 points at the time of publication.