Could pharma lose DTC tax deduction?

In last night's vice presidential debate, moderator Gwen Ifill asked which was worse, a nuclear Iran or unstable Pakistan. Some would say that's the difference between a rock and a hard place. But pharma execs could echo Rep. Rahm Emanuel, who's raising the specter of no R&D tax credit versus no DTC tax breaks.

At a recent meeting of the American Association of Advertising Agencies, Emanuel said new tax legislation will allow pharma the current tax credit for R&D spending--or the business expense deduction for DTC ads. Not both. "He said this without any tinge of satire, so you have to accept him at his word," an industry leader told the newsletter DTC Perspectives.

So which is worse? According to the newsletter, the industry spends 10 times as much on R&D as on marketing, but that doesn't jibe with other figures we've seen. And with more and more Big Pharma companies relying on biotech deals and buyouts--and cutting back their own R&D departments -that tax credit could be smaller next year than it has been in a while.

Of course, any legislation like that would have to make its way through Congress. So we can assume neither tax break is in immediate danger.

- here's the DTC Perspectives report
- read the post at Pharmalot

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