Pharma Ads Threatened in Senate

November 14, 2017

Senator Claire McCaskill (D-MO) suddenly and unexpectedly has filed an amendment to the Tax Cuts & Jobs Act released by Chairman Hatch. Her amendment would totally eliminate the advertising costs deduction for pharmaceutical companies. Her amendment is titled, “Eliminate the advertising deduction for big PhARMA.” Several Senators on both sides of the aisle have previously supported proposals similar to this one, but ANA has been successful in defeating those efforts in the past.

In this session of Congress, Senator Al Franken (D-MN), for example, introduced a standalone bill – S. 771, the Improving Access to Affordable Prescription Drugs Act – which would also eliminate the tax deduction for expenses related to direct-to-consumer prescription drug advertising. Sen. Franken’s bill has 15 Democratic cosponsors.

We are actively fighting Sen. McCaskill’s latest tax amendment and are working through The Advertising Coalition (TAC) to ensure that the entire marketing industry does so as well. This sort of advertising restriction faces serious First Amendment challenges as it threatens the commercial speech rights of companies to reach their consumers in a truthful way. Imposing economic penalties on truthful advertising due to the content of its message is unconstitutional. Prescription drug ads often provide lifesaving or life enhancing information to the public that can be of critical importance to them. The Supreme Court stated in Thompson v. Western States Medical Center, “If the First Amendment means anything, it means that regulating speech must be a last—not first—resort.” We hope to convince Senator McCaskill to withdraw or not pursue the amendment. If that is unsuccessful, we call on the Senate Finance Committee to defeat the proposal.

As we have highlighted many times in other posts to this blog, advertisers’ constitutional rights are under nearly constant attack at the federal, state, and local levels. Recently, ANA also has been actively fighting two mandatory disclosure ordinances in California

ANA also is pushing to make sure protections for the full deductibility of advertising expenses for all of our members are maintained in both the House and Senate versions of the tax reform package. The multifaceted threats these tax efforts pose would not only hurt the U.S. economy, but they could also potentially stifle commercial speech for years to come. ANA will continue to fight to make sure that these misdirected attacks do not pass and cause irreparable harm to our industry and the U.S. economy.


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