Sen. Franken Introduces Legislation to End Drug Advertising Tax Breaks

March 4, 2016 – Yesterday Sen. Al Franken (D-Minn.) introduced legislation that would end the tax deduction that drug companies now take for their marketing costs, a move that seemingly puts industry on notice that Franken wants to be a leader on this issue in the Senate, where it last was raised in 2007.

“We have seen versions of this legislation before and it’s not surprising that it rears its ugly head again in this campaign season,” said Coalition for Healthcare Communication Executive Director John Kamp. “But, the premise and the public policy are just plain wrong. Furthermore, laws that ban truthful messages are a violation of the First Amendment and an insult to patients seeking information to enrich their discussions with their doctors and empower their medical decisions,” he said.

Specifically, Franken’s bill, the “Protecting Americans from Drug Marketing Act,” would eliminate the tax advantages that industry currently is allowed for television, magazine and Internet drug ads, with a stated goal of encouraging pharmaceutical companies to “focus on developing new drugs – not marketing schemes,” according to a press release from Franken.

The press release wrongly states that pharmaceutical ads “can discourage patients and providers from seeking out more appropriate and effective medications,” when research supports the fact that direct-to-consumer (DTC) ads actually encourage patients to see their doctors and result in increasing levels of treatment for undertreated and underdiagnosed conditions.

In response to this legislation, the Pharmaceutical Research and Manufacturers of America (PhRMA) stated that “chronic diseases, such as high cholesterol, diabetes and depression are often underdiagnosed and undertreated in the general population, and account for 80 percent of health care spending. An unintended consequence of eliminating the tax deductibility of DTC advertising of prescription medicines may be fewer patients seeking medical care for chronic conditions that could be managed earlier and more cost effectively.”

“The Coalition for Healthcare Communication is working with The Advertising Coalition to garner support in the Senate for the value of DTC advertising,” said Sharon Callahan, Chair of the CHC Executive Committee. “DTC advertising does not detract from drug development efforts and it increases consumer awareness of the treatments and options that are available to them,” she said.