As Congress considers reining in health care costs, the issue of advertising is usually on the radar as a cost driver. I have written numerous times that the impact of DTC for Rx products on rising costs is negligible. In fact I have argued that advertising has probably lowered Rx consumer cost because it has created awareness and demand for competing drugs. The competitive forces result in viable alternatives for several branded and newly off-patent generic drugs in most categories. Insurers play one viable drug against the other and lower cost through negotiation.

The advertising of health care extends way beyond pills. It is worth a debate on whether the advertising of expensive tests and services raises or lowers cost. We have all seen pitches from MRI and CAT scan centers to have our body scanned. We also see doctors, dentists, physical therapists, hospitals, nursing homes, laboratories, home disease testing and other service providers fill our magazines, newspapers, and local television.

Let’s not forget the huge industry of OTC products and services that make health care claims. How about weight loss products, exercise devices, and herbal medicines promoting health?

While Congress has singled out the Rx market, that is the tip of the health ad iceberg. Like it or not America advertises to maintain its economy. Consumers complain about advertising all the time but most of them work in businesses that advertise and need advertising to grow revenues. Congress advertises its services through constituent mailings, campaign ads, C-Span and other media. My point is that advertising is here and needs to be here.

If Congress fears DTC, they should fear all health care advertising. I would suggest a comprehensive study on the cost impact of all health care ads and what would happen if it was all banned. My hypothesis is tens of millions of jobs lost and the lack of new health care products and services. Every Congressman has constituent businesses that depend on health advertising.  Advertising has been a tremendous net positive for this country. Of course we spend on a lot of products and services we do not need. It does make sense to regulate ads and make sure they are truthful. Once we ensure that happens, let’s get out the way and let consumers decide.

We have a choice in our society. We can allow all companies to pitch lawful products or we can start selectively banning ads that government is wary of consumers seeing. The first alternative, I admit, can lead to buying some products we do not really need. The second course leads to choking off new product innovation, and a healthy economy. I am sure we can save money as a society short term by banning all health ads and everyone getting the cheapest no-name alternative. Long term we will suffer greatly and Congress needs to look for unintended consequences of choking off advertising. I am not saying America cannot survive without DTC. I am saying any ban of DTC will not solve anything in terms of cost and will lead to a slippery slope of banning other ad categories.

The tax proposal that never dies is back. I received a constituent email from Florida Senator Bill Nelson this week and the Dracula tax is back. My Senator said he wanted to end tax deductions for pharmaceutical advertising. I wrote him the reasons why that was a counter-productive idea and have yet to hear back.

If the tax deductibility of ads were ended the drug companies would shift that spending to deductible areas. The government would save nothing, as drug makers just shift the spending to other areas. Somehow a deluded Congress feels that by making advertising a non-deductible item, the consumer would get lower prices. I doubt the reduction in ad spending would ever be rebated to consumers or the government.

It sounds nice to want to hammer drug companies. It makes a nice line in a constituent newsletter. For Democrats it makes it seem they are on the consumers’ side against profit hungry drug companies. So I understand why Senator Nelson wants to be for it. The problem is that Florida has a state full of seniors who by and large like to see drug ads. They are always looking for new treatments and find DTC a useful tool to inform them of the latest drugs. If DTC was made less attractive through tax policy these seniors would have to find other ways to hear about treatments. These are people who still watch television, listen to radio, read magazines and newspapers. They do use the Internet but their primary source of new product information is main media. A government interested in cost controls would probably like to restrict information on higher cost drugs but that is not necessarily a consumer benefit.

I am sure this Vampire tax will be here for many years hanging over the heads of drug marketers. Senator Nelson did not just propose ending the deduction for DTC but for all drug advertising which I assume also means detailing, sampling, meetings, and journal ads. I am optimistic the advertising lobby will convince Nelson and others that this limitation on commercial speech is bad policy and likely unconstitutional.

For all of you who want to see drug advertising stay deductible like advertising in all other industries, please see if your Congressional representatives are supporting Nelson. Take the time to email them as your opinions count.