The FDA is cracking down on pharma advertising on TV

We could be entering a future where we may see far fewer television ads featuring prescription pharmaceuticals. Consumers might applaud that, but as a longtime health and biotech industry journalist, I don’t think we’re talking nearly enough about the potential impact. It doesn’t just matter for pharma, but also for digital health companies that are starting to follow the playbook – and may be deterred from pursuing TV and streaming ads further.

“The administration’s recent actions have certainly created a moment of pause for the industry. Pharma companies are now weighing whether to pull campaigns, reallocate spend, or overhaul creative to meet evolving compliance expectations,” GoodRx CEO Wendy Barnes said in an emailed statement to Second Opinion.

“For traditional DTC (direct-to-consumer) advertisers, this is understandably a tense period of ‘wait and see,’ given the uncertainty around enforcement and the potential economic burden of adapting campaigns across TV, digital, and social,” Barnes said.

For those not following all the news as it unfolds, here’s a backdrop of what’s been going on over the past few months.

The Trump administration has set a new focus on TV and streaming ads. Since late last year, RFK Jr. has made no secret about his desire to end TV advertisements – blaming the opioid epidemic on lax advertising enforcement and calling out companies who hire celebrities as brand ambassadors.

In a widespread FDA crackdown this month, pharma companies, telehealth platforms and compounding pharmacies all received letters warning against false or misleading advertising. If the level of pressure and action continues, it could make it more expensive for companies that want to invest in TV ads. But pharma is particularly under focus since it has the potential to impact their massive revenue pools, given the effectiveness of these ads in driving awareness.

The impact is already being felt in direct and indirect ways. If the requirements to list side effects and risks increases (i.e., changes to the ‘major statement’ requirements), companies will have to purchase longer ad time. That means spending more money on expensive ad spots, which could be a big deterrent. And with the extra information, it's possible patients could be scared off and fewer will take the drugs, leading to decreased revenue. At least, that’s what experts see as the “worst-case” scenarios from this FDA/HHS action.

Here’s what I’m hearing: The flurry of memos sent to life sciences and telehealth companies – recently surfaced in a public data release – has buried already-weary government relations teams under a mountain of paperwork, and is forcing CFOs and marketing teams to discuss the future of ad budgets.

Barnes said that the crackdown is serving as a tailwind, in fact, for GoodRx, “as pharma brands look for lower-risk, higher-ROI channels.” The company is “already seeing inbound requests from brands looking to reallocate spend towards platforms like GoodRx.”

Per Axios, even if the administration lacks the legal authority, the sanctions and threat of public shaming may still have an impact.

For my debut column in Second Opinion, I spoke to more than a dozen insiders and experts who all said the same thing: Either the industry prevails, and ads continue, or the administration wins, and TV ads disappear. There is no in-between.

And digital health could also be impacted, particularly as more of the DTC companies start to see big results from TV ads. Think of the Hims & Hers Super Bowl ad to promote compounded weight-loss medications as a prime example of what might be harder to pull off in the future.

Pharma TV spend

For years, doctors and academics have complained that ads create demand by patients, interfering in the doctor-patient relationship. In other words, these ads are working.

FDA Commissioner Marty Makary specifically called out Hims & Hers Super Bowl ad earlier this year to promote GLP-1s. The ad garnered so much attention because it was essentially copying pharma’s playbook.

“TV advertising works. It drives volume,” said EY’s Commercial Strategy and R&D Lead Eduardo Schur. He has been fielding calls with clients about these letters.

Here are some key data points behind the lucrative TV ad market:

• The pharma industry spent about $10.8 billion on advertising last year.
• Nearly 70% of that was on TV and streaming ads.
• Pharma accounts for 10% of TV advertising.
• Pharma spends anywhere between $80 million to upwards of $400 million on a single product’s advertising per year.

But pharma doesn’t run ads without FDA’s approval. One insider said regulators get frame-by-frame storyboards, to ensure that ads meet the criteria of language, text, color, visuals, audio, and other specifics defined by the “major statement” regulations – all before they spend a dime producing the ads.

So what happens if the FDA successfully forces pharma ads off air?

A domino effect that could blow a hole in media budgets, cut marketing teams, and decrease pharma revenue. Those won’t break pharma – and aren't a concern to investors, as evidenced by the dearth of analyst notes on the topic – but pile on the alphabet soup of problems (MFN, IRA, PBM, plus tariffs), and the result is a level of unprecedented political pressure on the industry.

For DTC healthcare companies, it is a warning, and could be a net negative. Given that these companies are increasingly selling prescription pharmaceuticals, and not just medical services, the impact could be enormous for bottom lines.

In addition to the potential reduction in healthcare spend, the crackdown has one other benefit. It could put an end to “me-too” drugs, or those that are similar to what is already on the market – a key reason why pharma advertises, to inform patients of the various options in hopes they will be enticed to use theirs. According to David Mou, former Cerebral CEO and current founder and CEO of Benchmark Health, it has been an ongoing problem for doctors.

“With these kinds of restrictions, this forces the pharma companies to focus on higher-value assets,” Mou said.

Yet, as of now, the companies are in ‘watch and wait’ mode, I’m told, because the focus of the letters is TV ads and most digital health platforms are still using other avenues of advertising. So there are no immediate plans to alter plans to bring on celebrity ambassadors, nor to pull back from digital advertising – because no rules have technically changed…yet.

One digital health insider told me: “We already do due diligence and follow the rules. I don't think we (will) market less, because we don’t think we are breaking the rules.”

Another insider agreed and added: “In both the letters and the EOs, they are not announcing any new enforcement action. They are just saying we are enforcing existing law. We feel pretty comfortable that all of our ads have been in compliance with federal regulations.”

GoodRx’s Barnes similarly echoed confidence in the company’s advertising and differentiated role within the drug access system. “At GoodRx, our solutions are fundamentally different from traditional branded advertising. Our role is to help patients afford the prescriptions their doctors have already written.”

Bottom line: All eyes are now on the lawsuits, and their results. Or as Raymond James healthcare analyst Chris Meekins said in a recent note, “Because President Trump does not have the authority to outright ban pharmaceutical advertising, his administration seems to be trying to make it death by disclosure and rulemaking. Whether it can survive legal challenges is very much an open question.”

Anjalee Khemlani is an experienced and award-winning healthcare and business journalist based in the greater New York City area.

She was most recently the senior health reporter on-site and for digital coverage at Yahoo Finance, where she interviewed top companies CXOs and analyzed industry trends, as well as covered market moves.

Her coverage area includes pharmacy, digital health, insurance, health services and life sciences. Anjalee has previously worked for a variety of regional and international news outlets coveringbreaking news, healthcare, business and politics.

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