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ANA Mobilizes Members To Preserve Tax Deductibility of Prescription Drug Advertising Costs

The nation's largest advertisers are mobilizing to prevent Congress from imposing restrictions on the tax deductibility of the cost of advertising prescription drugs.

Leading members of the House Ways and Means Committee are considering a proposal that would eliminate the tax deductibility for prescription medications, while a similar proposal is gaining traction in the Senate Finance Committee.

"Denying the tax deduction for advertising costs for one industry would be unprecedented, and would raise very serious First Amendment concerns," said Dan Jaffe, Executive Vice President, Government Relations, ANA.  "The Supreme Court has made clear that differential taxes on the basis of the content of an ad are unconstitutional."  Jaffe emphasized that, "Consumers benefit greatly from prescription medication advertising, as it informs them about life-threatening diseases such as high blood pressure, strokes, diabetes and asthma and encourages them to consult their physician about available treatments."

Proof that DTC Advertising Works

Several studies indicate that medical advertising directly benefits consumers. The Center for Disease Control (CDC) has said that advertising helps reduce undiagnosed and under-treated medical conditions.  This includes the 6 million Americans who suffer from diabetes but have not been diagnosed and the 18 million Americans who are unaware that they are suffering from the "silent killer" high blood pressure. 

Health Affairs reported on the important role of the physician during visits prompted by seeing a prescription medication ad:


Restrictions on advertising for medications limit the ability to educate the public on health conditions. Out of 3,000 patients in a Massachusetts General study, 35 percent discussed an ad for a medication during their appointment.  Of that population 25 percent received a new diagnosis.  Approximately 43 percent of the new diagnoses were for "high priority" conditions such as hypertension, diabetes, depression and high cholesterol.

A 2004 survey conducted by Prevention found 65 million patients spoke to a physician as a result of seeing an ad for a prescription medication.  Almost half that number of patients spoke to a physician about a specific medical condition for the first time because they saw an ad.

The ANA's Call to Action

The ANA is encouraging its 360 members who collectively spend more than $200 billion in marketing communications and advertising, to take their case to members of the House Ways and Means Committee and Senate Finance Committee and express their strong opposition to any restrictions on the deductibility of marketing costs for prescription drug products.

"Eliminating advertising tax deductibility for one industry could be the beginning of a dangerous slippery slope that would potentially imperil many other product categories," said Bob Liodice, President and CEO, ANA. "In these challenging economic times, it would be incredibly counterproductive to make any form of advertising more expensive by taxing it. Advertising is critical to the economic recovery of our nation.  It helps generate $6 trillion in economic activity annually and supports more than 21 million jobs."

A copy of ANA's letter to the House and Senate tax writing committees is available here.

Legislative and Regulatory Issues Tracking

ANA's Washington, DC office works to protect the ability of all marketers to communicate effectively with consumers.   The scope of legislation, regulations, and court cases impacting the marketing community continues to be extremely broad, extending to issues as diverse as online privacy, prescription drug advertising, restrictions on the tax deductibility of advertising costs and the regulatory powers of the Federal Trade Commission.

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Compendium of Legislative, Regulatory and Legal Issues

ANA's Washington, DC office plays a leading role in protecting the ability of all marketers to communicate effectively with consumers. At the end of each year, we prepare a Compendium which describes our efforts on the broad range of issues we have faced. 

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