Sen. Franken Presses to End Marketing Tax Breaks for Rx Drug Companies

Sen. Al Franken, a member of the Senate Health Committee, introduced legislation to end a tax deduction that pharmaceutical companies take advantage of to write off the money they spend on prescription drug advertising.

Right now, pharmaceutical companies spend billions of dollars every year on television, magazine, and Internet advertisements - and the federal government gives those companies a tax break every time you see a drug advertisement. The Protecting Americans from Drug Marketing Act would eliminate these tax advantages so that pharmaceutical companies can focus on developing new drugs--not marketing schemes.

So-called "direct-to-consumer" advertisements drive up demand for new and higher-cost prescriptions and treatments, which increases overall medical costs for American families and seniors. Moreover, by minimizing the risks of certain medications while overemphasizing their benefits, these pharmaceutical advertisements can discourage patients and providers from seeking out more appropriate and effective medications.

"Doctors and medical professionals are in the best position to provide information to patients, not drug company advertisers aiming to make a profit," said Sen. Franken. "As it stands now, prescription drug companies have been spending billions of advertising dollars trying to encourage Americans to buy the most expensive drugs - even when cheaper, equally effective drugs are on the market. My bill would end tax breaks that encourage brand name drug advertising, and I'm going to be fighting to get it passed into law. This is just a commonsense measure to help cut down health care costs."

In 2014, spending on prescription drug advertisements reached $4.5 billion - a 30 percent increase from 2012. In fact, a recent survey showed that more than 80 percent of Americans reported seeing or hearing prescription drug ads, with about 3 in 10 people saying they spoke with their doctor about specific medicine as a result of these advertisements. The United States and New Zealand are the only countries that explicitly allow direct-to-consumer marketing for prescription drugs. The American Medical Association (AMA) has called for a ban, indicating that these advertisements encourage expensive treatments, despite the existence of more affordable alternatives. 

You can read a copy of the Protecting Americans from Drug Marketing Act by clicking here.

 

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