The Vampire Tax Rises Again
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.