Why Pharma's $10 Billion Ad Gamble May Be Coming to an End

mtallin
Sep 30
4 min read

Introduction

One of the current administration's goals is to remove or at least restrict pharmaceutical direct-to-consumer (DTC) advertising, citing the need to reduce the influence the pharmaceutical industry has on drug prescribing. While the exact details of how this might be achieved have not yet been revealed, it's clear that if it does happen, it will have a potentially significant impact on pharmaceutical sales. This article examines the current situation and how the removal of DTC advertising may affect key stakeholders.

First Off, What Is the Current Ad Spend by Pharma?

It's no secret that pharmaceutical companies spend enormous amounts on drug advertising in the US. Overall prescription drug advertising often tops $10 billion per year¹. A big brand-name drug launch can have a marketing budget of $100–500 million in its first year, with tens of millions dedicated to ads alone. For example, the top 10 drugs shown below all have annual advertising spends of over $170 million.

Table 1: Drugs with Largest Ad Spend in 2024

What Impact Will a Ban on DTC Spending Have?

But is it all worth it? What is the ROI on pharmaceutical drug advertising? That's a hard question to answer since product awareness by both patients and healthcare providers (HCPs) occurs in multiple ways. In a recent ZS study, it was found that TV advertising results in a 2:1–3:1 return on investment³. In another study by Intron Research, that number was higher, with ROI cited as 100–500%.

The return undoubtedly varies by therapeutic area. For example, while the DTC spend on Ozempic is high, the percentage of spend compared to revenue is much lower than other drugs in the top 10, likely due to news networks and influencers amplifying the Ozempic story. There's also a balance between drug price and patient population size. Not all patient drug requests are equal—a patient’s request for an expensive anti-inflammatory drug is worth more than a cheaper agent such as a migraine medication, although of course the migraine patient population is much larger.

There will almost certainly be a reduction in sales if DTC ads are further regulated. ZS estimates that $36–54 billion of US industry revenue would be at risk³. Of course, that's going to vary by company and therapeutic area. Legislators argue that the advertising savings will reduce costs, but it's hard to see costs being reduced by that magnitude. Without further information about whether all DTC advertising or solely TV/video DTC will be banned, it's currently hard to predict what the ultimate impact will be.

Whatever happens, it's likely that spending won't entirely go away but will likely shift to digital channels and influencer marketing, disease education, unbranded awareness campaigns, and enhanced patient support programs.

What Do Healthcare Providers Think About Drug DTC Advertising?

Legislators argue that without DTC ads pushing medication-based solutions, healthcare providers could better emphasize equally effective lifestyle interventions that may yield comparable benefits at reduced costs.

In a poll released this week, FirstWord showed that approximately 60% of physicians have a negative perception of DTC drug advertising in the US, while only around 25% have a positive view⁶. Further results showed that 38% of doctors reported that DTC ads encourage inappropriate patient requests for medications, and 32% said they contribute to confusion and misinformation. Forty-five percent of polled physicians said they would support tighter regulation.

In summary, doctors have a largely negative view of DTC ads. While they appreciate the fact that consumers are educated about new drugs, they don't want to be pressured into prescribing them and would welcome tighter controls.

And Finally—What Do Patients Think?

DTC advertising has certainly helped raise awareness of underdiagnosed or stigmatized conditions. Without these ads, patients might be less likely to seek treatment for conditions they don't know they have⁵.

However, what is clear is that the majority of people don't care much for drug advertising. People view pharmaceutical ads as profit-driven rather than patient-centered. There's a perception that ads "push pills" rather than promote health, sometimes encouraging overprescribing or unnecessary medication use. People often comment that the long list of side effects makes ads seem ridiculous or even comical.

Horizon BioInsights recently ran a small study to gauge interest in pharmaceutical ads among US residents who are not associated with the pharmaceutical industry⁷. We found that 25% of people asked their doctors about a drug after seeing an ad, and 40% of doctors then prescribed that drug. While this was a small study, the results are comparable to a much larger January 2025 study carried out by KFF, where findings were 18% and 50%, respectively⁴. While 18-25% doesn't sound like much - if 1 in 4-5 of all arthritis Psoriasis or Arthritis patients asked a doctor about a drug that's a pretty large number of patients requesting a branded agent.

In our study, 80% of respondents said that drug ads were "really" or "somewhat" annoying, and 50% of respondents said they would be happy to never see a drug ad again. The comments we received were universally negative.

Figure 1: Consumer Thoughts on DTC Ads⁷

In summary, consumers see pharmaceutical ads as useful for awareness, but they don't entirely trust them and can become concerned about reported adverse effects. They often feel the ads are more about selling than informing. Our data suggests a desire for reduced advertising. That being said enough patients are asking about branded drugs to make a difference in sales - so even if they don't like them they are having an impact.

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