Senate Democrats introduce bill to deny tax loophole for Big Pharma ads

“The American public shouldn’t be subsidizing Big Pharma’s ads which is why my legislation would close this egregious loophole.”

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U.S. Senator Jeanne Shaheen (D-NH) recently introduced the End Taxpayer Subsidies for Drug Ads Act, legislation that would prohibit pharmaceutical drug manufacturers from claiming tax deductions for direct-to-consumer advertising expenses. Despite the fact that advertising expenses by pharmaceutical drug manufacturers have more than quadrupled in the past 20 years, drug companies continue to deduct the cost of advertising expenses from federal taxes.

On Thursday, Sen. Shaheen introduced the legislation cosponsored by Sens. Sherrod Brown (D-OH), Angus King (I-ME), Sheldon Whitehouse (D-RI), Tammy Baldwin (D-WI), Kirsten Gillibrand (D-NY), Chris Van Hollen (D-MD), Bernie Sanders (I-VT), Jack Reed (D-RI), Amy Klobuchar (D-MN), Richard Blumenthal (D-CT), Elizabeth Warren (D-MA), Mazie Hirono (D-HI), Brian Schatz (D-HI), and Dick Durbin (D-IL).

According to the bill, pharmaceutical companies would no longer receive tax deductions for any ads, including “publication in journals, magazines, other periodicals, and newspapers, broadcasting through media such as radio, television, and telephone communication systems, direct mail, and billboards, and dissemination on the Internet or through digital platforms (including social media, mobile media, web applications, digital applications, mobile applications, and electronic applications).”

“A major side effect of Big Pharma’s enormous ad spending is that it drives up prescription drug costs and rips off taxpayers in the process. Drug companies continue to increase advertising spending year after year, inundating the airwaves with billions of dollars of commercials, all the while continuing to increase the price of medications that patients need,” Sen. Shaheen said in a press release. “The American public shouldn’t be subsidizing Big Pharma’s ads which is why my legislation would close this egregious loophole.”

According to a new study, direct-to-consumer prescription drug advertising more than quadrupled by increasing from $1.3 billion in 1997 to $6 billion in 2016. In that same time period, advertising from drug companies has increased from 79,000 ads to 4.6 million ads, including 663,000 TV commercials.

By using taxpayer dollars to pay for drug advertisements, pharmaceutical companies have been allowed to increase demand which has led to the drastic rise in drug prices. Shaheen’s legislation seeks to end the cycle of addiction that continues to cripple this nation by denying taxpayer funding towards the ever-increasing onslaught of drug advertisements.

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