DTC challenges mount as senators roll out bill to yank tax deduction

This election year, pharma has heard some of its least favorite ideas revived in Washington. Now, one of them has grown into a bill in the Senate.

Last week, four Democrats introduced a bill to end the tax deduction for direct-to-consumer advertising. The cost of placing television commercials, print ads and radio spots would no longer be a tax write-off--and nor would less traditional forms of marketing, such as social media and telephone communications.

Consumer advertising drives up demand for expensive new drugs, ratcheting up healthcare costs for families and seniors and diverting attention from other treatments that might be more appropriate or effective, Sen. Al Franken, one of the bill's sponsors, said in a statement.

Sen. Al Franken

Franken quoted $4.5 billion in DTC ad spending in 2014--for 2015, it surpassed $5 billion, according to a related FiercePharmaMarketing story--and cited surveys showing that 80% of Americans have seen DTC ads, and that three in 10 said they talked to their doctors about drugs they heard about from those ads.

"Doctors and medical professionals are in the best position to provide information to patients, not drug company advertisers aiming to make a profit," Franken said. "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. … This is just a commonsense measure to help cut down health care costs."

In rolling out the proposal, Sens. Al Franken, Sheldon Whitehouse, Sherwood Brown and Tom Udall joined a variety of lawmakers, politicians and even doctors who have come down against DTC advertising in recent months. Presidential candidate Hillary Clinton has proposed ending the DTC tax deduction, and last month, Rep. Rosa DeLauro introduced a bill that would prohibit DTC advertising for a drug for three years after its launch. And last fall, the American Medical Association voted in favor of an outright ban on direct-to-consumer pharma ads.

Franken isn't new to the issue, however. In 2009, he put forth a bill to kill the DTC tax deduction. It didn't make it out of committee.

Of course, pharma's lobbyists--and advocates for the advertising industry as well--are lined up against the measure. Among them is the Coalition for Healthcare Communication (CHC), which is working with The Advertising Coalition "to garner support in the Senate for the value of DTC advertising," says Sharon Callahan, chair of CHC's executive committee. And the Association of National Advertisers says the proposal "fails to acknowledge the substantial data demonstrating that DTC advertising plays a critical role in our nation's health care system and that consumers are better informed because of the information provided in the ads."

- check out the bill
- read the ANA release
- see Franken's statement

Special Report: The top 10 advertisers in Big Pharma | The top 10 most-advertised prescription drug brands

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