Will pharmaceutical ads be banned under the second Trump administration?

The news: Robert F. Kennedy Jr.’s nomination as the head of the Department of Health and Human Services has some pharmaceutical companies worried that the incoming Trump administration could significantly restrict the industry’s ability to advertise to consumers.

• Kennedy has stated that he would seek to ban D2C drug advertising, preventing pharmaceutical companies from advertising drugs on TV, radio, and other media. Kennedy announced the plan during his presidential run and reiterated in late October that he would pressure president-elect Donald Trump to pursue the ban.

The impact: Healthcare and pharmaceutical advertisements account for $22.09 billion (7.3%) of the $310.19 billion in US digital ad spending, per our forecast. Healthcare and pharmaceutical companies are frequent TV advertisers, and a D2C ad ban could deal a blow to networks’ advertising revenues.

• The US allowed pharmaceutical companies to advertise directly to consumers in 1997, creating a lucrative pool of ad spending for media companies. The US and New Zealand are the only countries where pharma D2C ads are fully legal, setting a global precedent for restricting such advertising.

Will it actually happen? As with many proposals made by incoming Trump administration officials, it’s unclear. Kennedy has taken a hard stance against several pharmaceutical and fast food industry practices, but the big-business friendly Trump administration and limited support in Congress could hinder those efforts.

• The current congressional agenda provides offers clues about the likelihood of a D2C ban. Bills proposing similar measures were introduced this year, but they lack support from Republican lawmakers, who will hold a majority in the next Congress.

Our take: The Trump administration’s big business-friendly agenda lessens the likelihood that Kennedy would be able to impose such restrictions should he be confirmed.

• Trump has shown some willingness to walk back or adjust plans after initial statements and pressure from Republican lawmakers. The president-elect recently said he would impose tariffs of 25% on Mexican and Canadian imports and an additional 10% on Chinese imports.
• During the campaign, Trump had proposed tariffs as high as 60% for Chinese goods, but business and inflationary concerns could have softened his approach.

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