It came up early and often – one of the ways to help fund health care reform, and at the same time bring an end to what many consider to be a questionable practice – the direct-to-consumer marketing of prescription drugs – would be the elimination of tax deductions for such ads. But in the end, the deductions survived in both the Senate and House versions of the bill.
Prescription DTC advertising is estimated at about $4B a year, according to the New York Times. Members of the media, already hit by severe reductions in core auto advertising, did not want to see an entire category eliminated, and of course pharmaceutical companies want the freedom to market their wares as they see fit.
The pharmaceuticals early on promised to help save $80B in drug costs over 10 years, and NYT says elimination of the deduction could total about $10B of that amount, but in the end efforts to kill the deduction never made it out of committee.
A late attempt to highlight the issue by Byron Dorgan (D-ND) didn’t seem to go anywhere, but he promised to bring it up again at a later time.
RBR-TVBR observation: This issue comes up again and again, and it will to come up again and again, and it’s not about the money.
Generally, when prescription drug ads are under attack, it’s not with the aim of eliminating the tax deduction for the ads, it’s aimed at eliminating the ads, period.
There will always be the opinion – perhaps you share it — that if a pharmaceutical requires a doctor’s prescription, only doctors need to know about it. Advertising it to consumers should be pointless, and the fact that it works is seen as a flaw in the system.
The deduction survived this time. But the issue will come back again.