Prescription Drug Ads Face Big Changes. These Stocks Could Get Hurt the Most.

Robert F. Kennedy Jr., U.S. secretary of Health and Human Services. (Yuri Gripas/Abaca/Bloomberg)

Key Points

About This Summary

• The U.S. Department of Health and Human Services and the FDA are introducing reforms to prescription drug advertisements.
• Drug companies may have to include full safety warnings in ads, potentially shifting ad spending away from television.
• Pharmaceutical advertisers accounted for over $5.15 billion in linear TV ad spending in 2024, 11.6% of the total.

Big changes could be coming to pharmaceutical advertising on TV, potentially causing problems for the broadcasters and networks that get paid to host those commercials.

TV watchers have become all too familiar with seeing prescription drug ads while watching their favorite programs. It isn’t uncommon to listen to a catchy theme song about a drug, like AbbVie’s “control is everything to me,” lyrics in a commercial for Skyrizi. Hearing personal stories about how Novo Nordisk’s Wegovy led to weight loss or that “healing is possible” with Johnson & Johnson’s Tremfya has become routine for viewers.

That could be about to change.

The U.S. Department of Health and Human Services and the Food and Drug Administration said Tuesday they were introducing reforms to what they called “misleading direct-to-consumer pharmaceutical advertisements.”

Essentially, drug companies would have to include full safety warnings for the prescription drugs featured in direct-to-consumer ads—as opposed to footnoting the information and directing people to websites to learn more about the risks of those treatments.

“We will shut down that pipeline of deception and require drug companies to disclose all critical safety facts in their advertising,” Health and Human Services Secretary Robert F. Kennedy, Jr. said in a news release.

AbbVie, Novo Nordisk, and Johnson & Johnson didn’t immediately respond to a request for comment.

The ads wouldn’t be outright banned. However, having to change ads might force pharmaceutical companies to transfer resources to create new ad campaigns. That could pressure them to “shift spend away from television,” Madison and Wall analyst Brian Wieser told Barron’s.

That would likely cause problems for broadcasters, such as Nexstar Media Group, and networks, like Walt Disney’s ABC, Comcast’s NBC, and more.

Nexstar, Disney, and Comcast didn’t immediately respond to a request for comment.

Daniel Weinbach, CEO of marketing firm The Weinbach Group, told Barron’s that moving these ads away from broadcast TV would cause a drop in revenue for broadcasters and networks.

According to a research from ad measurement platform iSpot, prescription pharmaceutical advertisers accounted for over $5.15 billion in linear TV ad spending in 2024—or 11.6% of the total ad dollars flowing to national broadcast and cable networks. About 22% of that drug ad spending was on news and information programs, while about 18% was attributable to sports programming.

Investors are paying attention. Shares of Nexstar dropped 2.6% on Wednesday, following the announcement Tuesday night. Disney stock dropped 1.4% while Comcast declined 0.6%.

These ads have been important for both TV companies and drugmakers. According to the U.S. Department of Health and Human Services, direct-to-consumer advertising drove about 31% of the rise in U.S. drug spending since 1997, when the FDA relaxed ad restrictions.

“You need to push the message to the consumers who don’t necessarily know that they have a problem, or aren’t fully aware of the solutions to their problems. Television does create a useful environment for that,” Wieser said.

Despite the announcement from the Trump administration, what prescription drug ads will look like in the future is uncertain. Experts expect that the pharmaceutical and TV industries will push back on these changes.

“I think in the near term, we’re either going to see the disappearance of prescription drug ads for a short time, or, like so many times in the past, the court will step in and say this is a violation of free speech,” Weinbach said.

Write to Angela Palumbo at angela.palumbo@dowjones.com

Corrections & Amplifications: iSpot is an ad measurement platform. A previous version of this article incorrectly identified the firm as iSpy.