Once again, several members of Congress have come together to call for an end to the tax deductions that drugmakers receive for their direct-to-consumer advertising.
The latest attempt spans both sides of the aisle and comes from the U.S. House of Representatives. Republican Reps. Greg Murphy, M.D., of North Carolina and Nick Begich of Alaska, along with Democratic Reps. Angie Craig of Minnesota and Hillary Scholten of Michigan, introduced the No Handouts for Drug Advertisements Act last week and announced it to the public Monday.
Current laws allow makers of prescription and compounded drugs to treat advertising outlays like other business expenses and deduct the costs when calculating their federal tax bills. The proposed bill would end that practice for ads on TV, radio, social media “and other common platforms,” per the announcement.
The announcement also cited the Campaign for Sustainable Rx Pricing’s estimate (PDF) that taxing or completely banning DTC drug ads could increase federal tax revenues by up to $1.7 billion annually from the 10 largest pharmas alone.
“Direct-to-consumer drug advertising can promote inappropriate prescribing practices, undermine the doctor-patient relationship, and increase unneeded spending on medications,” Murphy, a practicing urologist, said in a statement.
“America is one of only two nations in the world that allows pharmaceuticals to be marketed directly to consumers. Patients should trust their doctor for medical guidance, not 30-second TV ads,” he continued. “This legislation ensures that resources are directed towards lowering drug costs and investing in the research and development of new, life-saving treatments.”
The bill has been referred to the House Ways and Means Committee for consideration.
Members of Congress have tried several times over the years to end the tax deduction for drug ads, claiming that the “loophole” leads pharmas to drive up drug prices as the ads increase demand for their products.
Most recently, a pair of matching bills were introduced in both chambers of Congress last summer. Sen. Jeanne Shaheen, D-N.H., headed up the Senate version of the No Tax Breaks for Drug Ads Act, joined by nearly two dozen cosponsors from the Democratic and Independent wings of the chamber. The companion bill, meanwhile, was introduced by then-Rep. Elissa Slotkin, D-Mich., with support from a handful of other Democrats in the House.
Both bills were referred to committees in their respective chambers, where the progress of each proposal stalled out.
Shaheen and Slotkin have previously tried and failed to pass similar bills periodically throughout the last decade, continuing on a legacy of attempts from various lawmakers dating back at least to 2009.