Pharmaceutical companies spend approximately $18B in media each year in the U.S., one of the only countries that allows branded direct-to-consumer (DTC) advertising. With Robert F. Kennedy, Jr. now confirmed as the new secretary of the Department of Health and Human Services, many are wondering if he’ll make good on his stated intentions to ban DTC advertising.

Since 1997, when the FDA issued guidelines for DTC advertising that allowed reminder ads and TV ads to promote medications (as long as they referred to a printed resource for additional safety information, also called the “book of record”), pharma has used DTC as an important lever to drive awareness and brand growth. It’s been an impactful way to increase awareness and demand for new treatments. Broadcast and cable TV advertising has delivered a 2:1-3:1 return on investment for pharma brands, according to a review of marketing mix analyses by ZS. That return suggests that a full ban on DTC advertising would put an estimated $36B-$54B of U.S. industry revenue at risk, with particularly significant downsides in high consumer spend categories like immunology, migraine and obesity.

Given those significant risks, a proposed ban on DTC has many brand marketers wondering:

• What exactly would a DTC “ban” or “restriction” look like for pharma?
• How likely is a ban?
• What can pharma marketers do now to prepare?

It bears noting that past administrations have taken shots at DTC advertising bans, too. Bills to ban DTC were introduced in 2007 and again in 2015. President Joe Biden promised to end DTC advertising as part of his platform and so did presidential candidate Hillary Clinton. In 2019, President Donald Trump wanted companies to put prices for drugs in DTC ads, but a judge blocked the rule before it could take effect.

The concerns this time stem mainly from the large number of new policies, some of which have been unexpected, that have been implemented during the first 100 days of the Trump administration. While many in the pharma industry do not believe a total ban is likely, there is a risk that Kennedy may make it more difficult to create and promote branded pharma advertising. We can consider a few potential scenarios about a DTC ban.

There are likely a few possible scenarios that could be classified as a ban or restriction on DTC.

• Taking away the tax write-off for DTC ad spend. This means eliminating the Selling, General and Administrative (SGA) tax deduction for DTC media spends by creating a carve-out for the SGA in the tax code for DTC media for pharma companies. This would cause financial hardship for pharma by increasing their tax burden—and might reduce or curtail some companies’ spending.
• Putting more restrictions on DTC advertisements or delaying approval of DTC ad content. There could be more rules created about what brands can and cannot include in advertisements, as the first Trump administration tried to put in place. Approval review rules and delays could also be added.
  
  The Food and Drug Administration (FDA) currently allows a “file and use” approval process for DTC ads. In his new role, Kennedy could change the process to cause a review of all ads and slow the process of getting an ad on air. This is currently the process for brands operating under the Subpart H process. Brands operating under Subpart H of the Code of Federal Regulations have been designated as “breakthrough” brands and their ads need to be reviewed and approved by the FDA before being put in market. The guideline requires a 90-day review process for all HCP and consumer ads.
  
  Putting this kind of restricted approval process in place, effectively making all ads subject to an approval and queuing process, would mean brands would have to account for much longer lead times on ad content—maybe up to a year in advance of airing. It would make DTC difficult, but not impossible. The result would be more advance planning and longer running of ad content versus switching up content to be more relevant and helpful to patients.

• Returning DTC advertising to its pre-1997 level. This is the most extreme scenario, which would likely be slowed by free speech challenges in the courts (which the industry has threatened to do in the past when faced with a threatened ban). With most TV ads moving to addressable and connected digital TV (CTV), it is unclear how the administration would view digital video. There would likely be enough confusion on how to classify digital video that it would be debated for many years or not be included in the ban at all.

In the past, a few barriers have effectively prevented a ban, even when an administration promised one:

• Legal challenges: The courts have usually struck down any bans for DTC citing free speech, and they could likely do the same if a ban is put before them again. A legal battle could put a ban on hold until the courts have time to review all the ramifications. It is important to note, however, that the industry can’t function without some level of support from the FDA, the Centers for Medicare & Medicaid and other agencies. The current administration is implementing sweeping changes. Pharma may not be as willing to provoke the administration with a legal challenge.
• Lobbying and industry resistance: The trade group Pharmaceutical Research and Manufacturers of America (PhRMA) has successfully lobbied against a DTC ban for many years. The organization spends millions a year to make sure DTC remains in place, and their arguments are usually powerful. A ban on DTC could mean job losses, reduced revenues for pharma, media companies and large agencies, which would affect the unemployment rate and the stock market. Pharma spends $18B on ads, according to Kantar, and that’s a lot to take out of the marketplace.
• Delays in implementation: The up-front buying process for TV means that any ban may have to wait until the end of the year to be implemented. Advertisers have already purchased their TV buys for the year, and it’s not feasible to pull all of that back. This could cause a delay in implementing a ban on TV advertising.

Again, this year feels different. We don’t know if these arguments will be effective in the current environment, or if the industry will choose to confront the administration in the same way that it has in the past. 

Preparedness is critical and while some of our suggested actions are about contingency planning, others are “no-regret” moves even if the DTC status quo remains. We believe there are three areas of focus for pharma marketers considering the prospect of a partial or complete DTC ban:

• Reoptimize marketing mix under different potential DTC ban policies
• Identify areas of effectiveness improvement that can close the DTC ban’s revenue gap
• Evolve the patient marketing function for an unbranded world

Reoptimize marketing mix under different potential DTC ban policies

Brands that spend significantly on TV need to evaluate contingency marketing mixes and plans without this option. Analytics teams need to assess alternate budget plans, accounting for both a reduced forecast and for the synergistic effects that consumer and HCP marketing have. If still permitted, some budget can be shifted to digital consumer campaigns, though second-order effects in those channels also must be considered. For example, if multiple competing brands seek to invest more heavily in search advertising, keyword prices will increase.

We believe that budget planners and analysts should assess these contingency options now. Pharma cannot assume that if a ban comes, there will be an orderly wind-down and significant time to prepare. Brand leaders can prepare to make any required pivots quickly and with the best available facts by looking at different ban scenarios and developing revised forecasts and budgeting responses.

Identify areas of effectiveness improvement that can close the DTC ban’s revenue gap

Improving spend effectiveness is always a no-regret move. Significant limitations on patient marketing will shift the balance of impact toward healthcare providers (HCPs), so programs that improve the return on investment for HCP engagement by emphasizing insight and contextual knowledge about customers, then use it to build individualized customer strategies, will take on new urgency.

Beyond HCP marketing, partial DTC ban scenarios that focus on linear TV while leaving open other patient engagement channels will drive increased focus on improving digital campaigns. Pharma marketers can ramp up efforts to develop highly targeted digital campaigns and optimized content to capture consumers’ attention and then craft customized content journeys to help educate and inform patients at scale.

Increasing engagement through influencer marketing strategies, personalized social media, web and search optimization can connect consumers with the information they need to make good health and treatment decisions. Social media influencers and “micro influencers” with between 10k and 500k followers have proven successful at generating awareness and education around branded treatments. Paired with personalized digital experiences, a strong influencer campaign in social media could engage patients in branded content. Biohaven used this strategy for Nurtec during its launch in March 2020, at the height of COVID quarantine. The influencers online spread the word about Nurtec and its benefits.

Brands can invest more heavily in data-driven digital marketing campaigns to connect with patients and provide the information specific to their behaviors. These programs have evolved significantly since the advent of gen AI, enabling dynamic content, personalized websites and digital video to engage patients. With the additional dollars that a ban on linear TV could free up, we anticipate increasing investment in data clean rooms that can connect media exposure to patient claims data in a HIPAA-compliant manner. Brands can more easily track patient exposure to digital messages and how patients are behaving. Optimizing the digital campaign with this information can make programs more engaging and successful.

Evolve the patient marketing function for an unbranded world

If advertising geared toward specific drugs is banned or sharply curtailed, patient engagement strategists will need to shift their focus upstream from product decision to patient activation and downstream to facilitating therapy initiation and treatment persistence. Unbranded disease awareness ads would not be affected by a ban or change to the regulations. Working with patient advocacy groups, pharma companies could sponsor educational messages and offer information on their treatments.

If it becomes difficult to fill the “top of the marketing funnel,” brands will likely look to grow through improved patient experiences and greater adherence to the therapy plan. They’ll likely invest in more support programs to make getting on therapy easier—navigating the insurance barriers and offering services like bridge programs, education, nurse support and online wellness content to help patients stay on the treatment as their doctor prescribes. Preventing drop-offs or never-starts may become more common to help a brand grow while supporting patients.

These changes in the core activities of patient marketing will require brand leaders to assess their capabilities in these areas. They’ll also need to assess their collaboration models with functions like advocacy, public affairs and patient services. As third-party advocates grow more influential in a potential post-DTC environment, pharma should consider account-based approaches similar how market access field teams are deployed. And if patient support becomes a differentiator, some pharma companies should reassess the extent to which those programs are delivered with in-house capabilities versus contracted third parties. 

While it is difficult to predict what will happen regarding a DTC ban, the best thing brand marketers can do is plan. Establishing a clear strategy that can be ready should a DTC ban go into effect could be the difference between meeting growth goals and missing the mark.