Senators put pharma ads in the crosshairs


Al Franken (D-MN) and colleagues believe that bringing an end to the tax deduction for advertising prescription drugs may be a way to help fund health care reform. A similar plan went nowhere earlier in the House. While many such attempts in the past have focused on direct-to-consumer ads, this appears to cover all marketing efforts.

Here are the operative clauses in S. 1763 Protecting Americans from Drug Marketing Act: “Advertising or Promoting — For purposes of this section, the term ‘advertising or promoting’ includes direct to consumer advertising in any media and any activity designed to promote the use of a prescription pharmaceutical directed to providers or others who may make decisions about the use of prescription pharmaceuticals (including the provision of product samples, free trials, and starter kits).”; and “Disallowance of deduction for prescription pharmaceuticals advertising and promotional expenses.”

Franken in joined in introducing the bill by Sherrod Brown (D-OH) and Sheldon Whitehouse (D-RI).

RBR-TVBR observation: Marketing and promotion is a legitimate business expense, and it has been shown time and time again that imposition of an advertising tax is just a way to drive up the expense paid by consumers for the final product.

When it comes to pharmaceuticals, there is a special consideration. Why should something only available under doctor orders be marketed to citizens who have no ability to go out and buy it? The fact that it works – that patients seemingly can convince some doctors to prescribe something on request – can be seen as a flaw in the system.

However, to date Congress has avoided taking any action on that front despite several fairly recent debates, and we’ve heard that the companies themselves are thinking twice about the true value of direct-to-consumer marketing.

But to cut off all marketing is ridiculous. What are these companies supposed to do, rely on news reports and word of mouth in the hospital doctor’s lounge? They have to be allowed to get the word out about their product.

And it’s particularly ridiculous to cut off advertising for this issue at this time, where the ultimate goal of health care reform is to contain its costs. This bill will do nothing but drive costs up and will be counter-productive to the entire reform enterprise.