Senate Dems again targeting tax deductions for DTC drug ads
- Senate Democrats are again looking to pass legislation that would eliminate one of the advantages of direct-to-consumer drug advertising: tax deductions.
- S.73, or the End Taxpayer Subsidies for Drug Ads Act, is a bill that would revise the Internal Revenue Code of 1986 to include a section that specifically excludes prescription drug DTC ad expenses from being tax deductible.
- Jeanne Shaheen, a Democrat from New Hampshire, is sponsoring the bill. Co-sponsoring it are two independent senators and 18 Democratic senators, including presidential hopefuls Kirsten Gillibrand of New York and Elizabeth Warren of Massachusetts.
Lawmakers have tried multiple times to revoke tax deductions for prescription drug advertising, which are offered through a section of the tax code that OKs business deductions for "ordinary and necessary expenses." Just last year, Sen. Claire McCaskill, D-Mo., introduced a bill identical to Shaheen's.
Those efforts, however, didn't pan out. McCaskill's bill went nowhere after it was introduced in March 2018. Shaheen's attempt will also surely face industry opposition if it begins to advance through the Senate.
For any progress to happen, Democrats would need help from across the aisle, as Senate Republicans control legislative committees and hold a 53-seat majority. That help is typically hard to come by in such a divided Congress.
Yet on healthcare and on drug prices, there may be more room for cooperation than in other areas.
While supporting President Donald Trump has been a balancing act for Republican senators, often they've sided with the commander-in-chief.
The Trump administration, in fact, has already set its sights on shaking up the DTC drug ads work; in October, the Centers for Medicare and Medicaid Services proposed requiring drug companies to include list prices in DTC advertising.
While that proposal has yet to advance into a more substantive form, the interest from the Trump administration could signal DTC drug ads will remain in the spotlight.
Indeed, the drug industry's powerful trade group PhRMA has put out its own voluntary framework for sharing cost information with consumers (outside of the ads themselves) — suggesting that pharma is taking seriously the threat of action on its favorite advertising lever.
So far, Eli Lilly appears to be the only major drugmaker to put that framework into place, modifying its marketing for its diabetes drug Trulicity (dulaglutide).
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