Taxing Times for the Drug Industry

As members of the U.S. Congress consider options on how to fund Obama administration plans to extend health care coverage to those currently uninsured, the drug and advertising are digging in to defend tax breaks on direct-to-consumer advertising. Representative Charles Rangel (D-N.Y.), the chairman of the House Ways and Means Committee, said that "one thing that's not off the table is that you can pick up $37 billion knocking out the deduction for [drug] advertising." The possibility that the tax deduction on drug promotion could be removed has angered the Association of National Advertisers (ANA). "What, anytime somebody doesn't like a particular product category, they're going to take away their tax deduction?" asked Dan Jaffe, ANA's Executive Vice-President. In a media statement, the ANA objected to any change that would make "advertising more expensive" as, it claimed, "advertising is critical to the economic recovery of our nation." The Pharmaceutical Research and Manufacturers of America did not respond to Advertising Age's request for a comment.