Tax-Free Ads

by dday

The more we wade into this health care debate, the more we uncover things that simply astound. In an article about curbing prescription drug ads on television, there’s this nugget:

Meanwhile, Representative Jerrold Nadler, Democrat of New York, has introduced a bill called the Say No to Drug Ads Act. It would amend the federal tax code to prevent pharmaceutical companies from deducting the cost of direct-to-consumer drug advertisements as a business expense.

“You should not be going to a doctor saying, ‘I have restless leg syndrome’ — whatever the hell that is — or going to a doctor saying, ‘I have the mumps,’ ” Mr. Nadler said in an interview. “You should not be diagnosed by some pitchman on TV who doesn’t know you whatsoever.” […]

Representative Charles B. Rangel, Democrat of New York and chairman of the House Ways and Means Committee, said last month that legislators would consider ending the tax break for drug ads as a way to raise money to pay for the health care overhaul. But, after lobbying from broadcasters and newspapers, Mr. Tauzin said, legislators quickly abandoned the idea, concluding that such a measure would not raise significant money.

With lawmakers still fighting over how to finance health care reform, Mr. Nadler said he hoped his bill might find an audience.

“On First Amendment grounds, I am not going to say we will ban” drug advertising, said Mr. Nadler, who represents parts of Manhattan and Brooklyn. “But they should not be able to get taxpayers to subsidize it.”

Meanwhile, Representative Daniel Lipinski, Democrat of Illinois, is pushing his own bill that would end the tax deduction for drug company spending on advertisements.

Drug companies get a TAX DEDUCTION for running ads for their drugs. Is this true of Frosted Flakes? Audi? Xerox? Does any other company in America get subsidized for airing commercials to get America to buy their products? It’s not “significant money,” though, so ending this direct payout from taxpayers to drug companies got shelved.

Set aside for a second the hypochondria that a nightly barrage of ads telling you that you have restless leg syndrome or iron-poor blood or any of a thousand ailments induces. Set aside the self-medication and the boiling down of complex medical issues into 30-second spots showing couples running through a field. Set aside how drug ads increase demand for medications and thus the costs. Set aside that some of these ads run before the Food and Drug Administration even completes their studies of the side effects. You mean to tell me that I’m helping PAY for these things, too?

Fun fact in the article: only the United States and New Zealand allow direct-to-consumer drug advertisements.

…and here’s the part where I revise and extend my remarks, as the deduction under discussion is about business expenses and not a straight tax deduction. Maybe I should put a big blinking banner at the top of this one saying IGNORE. They ain’t all gems, folks. I will take solace in the fact that, contra Mitch Albom, I know what marginal tax rates are. But just a little solace.

I think the point of having advertisements for prescription drugs at all can still be debated, however, for reasons described above.

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