Which TV Networks Will Be Crushed By RFK Jr's Crackdown On Pharma Ad Spending

In the aftermath of RFK Jr's appointment as the extremely influential secretary of Health and Human Services, a position which determines the fate of trillions in government spending, pharma stocks - especially those with a vaccine bent - have gotten crushed.

But the plunge in pharma shareholder value is just the first casualty of RFK Jr's arrival.

By now, everyone knows that just as there is nobody more powerful and influential than the pharma lobby in DC, so there is no industry more generous in its mass influence peddling, pardon ad spend, on major TV networks than pharma companies. And with the coming great winter for peddlers of legalized drugs and untested mRNA therapies,  the biggest losers after the pharma universe itself will be those to whom said universe used to spend billions to buy influence.

Who is most exposed? For the answer we go to a report from Morgan Stanley analyst Cameron McVeigh (available to pro subscribers) who notes that "network TV and cable news networks, which skew to older demos, benefit from pharma ad spend."

Here are his main takeaways:

• Existing regulations requiring significant risk discussions (fair balance) in ads have left pharma advertising heavily dependent on national TV advertising.
• Third party data suggests 88% of pharma ad spend is still TV compared to just 8% digital. Pharma ad spend is roughly 7% of total US ad spend.
• Among media companies, MS sees the highest exposure to pharma spending on TV (<5% of total rev) at FOX, Paramount and AMC Networsk.
• Morgan Stanley would expect significant healthcare and media industry pushback to any proposed or enacted changes to pharma ad spend.

Starting at the top, here is the punchline: 88% of all Pharma ad budget targets traditional TV.

Cutting to the chase, here are the top 10 media companies who are most exposed to pharma ad revenues as a % of total pharma ad spend; the list include Comcast, Disney, Paramount, Warner Bros and Fox.

And these are the top 10 pharma companies most reliant on TV advertising.

It's not just network TV where pharma is busy buying influence: the ad companies themselves are a stalwart recipient of pharma dollars meant to keep the public fat, lazy, depressed and stupid.

Finally, putting it all together, the captive pharma money is so critical to maintain a captive audience for all the products pharma has to sell, that pharmaceutical ad spending alone makes up a whopping 7% of total US ad spending.

How to put an end to this devastating cycle of pharma influence peddling which slowly but surely makes Americans ever more addicted to "legal" drugs, and ever sicker by the day? Simple: as Elon Musk suggested, just end all advertising for pharma.

No advertising for pharma https://t.co/gFAOlFsB2Y

— Elon Musk (@elonmusk) November 19, 2024

With Musk now a trusted advisor for Trump, we can only hope that the president will listen.

More in the full Morgan Stanley note available to pro subscribers.