Lawmaker Introduces Bill to End Tax Breaks for Consumer Drug Ads

U.S. Senator Jeanne Shaheen (D-NH) introduced a bill (End Taxpayer Subsidies for Drug Ads Act) that would amend a 1997 guideline permitting pharmaceutical companies to receive tax breaks for consumer-directed advertising. Studies have shown that such advertising often encourages patients to seek medications unnecessarily.

“A major side effect of big pharma’s enormous ad spending is that it drives up prescription drug costs and rips off taxpayers in the process,” Sen. Shaheen said in a statement, according to STAT News.

In August 2018, ASH Clinical News spoke with researchers about the history of direct-to-consumer advertising and the continuing debate over its regulation. The U.S. is one of only a small number of countries that currently permit such advertising.

Jon Bigelow, who heads an advocacy group for medical publishers and advertising agencies, questioned the legality of the bill, arguing that it violates the First Amendment and singles out one type of advertising. “Normally, the tax code treats product categories equally, yet this bill is aimed specifically at one type of message,” he wrote to his members.

Similar legislation over the past three years has failed to gain traction. President Donald Trump, whose administration has called for increased transparency and competition when it comes to drug pricing, could be an ally.

Source: STAT News, January 17, 2019.

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