Last week we discussed Presidential candidates including Fmr. Sec. Hillary Clinton wanting to eliminate the tax breaks associated with advertising, or otherwise working to prohibit or otherwise minimize drug sales. Industry groups have, however, come out to defend these positions.
The focus has primarily been on “stopping “direct-to-consumer drug company advertising subsidies, and [requiring that companies] reinvest funds in research.” Secretary Clinton proposed eliminating corporate write-offs for direct-to-consumer advertising specifically by denying tax breaks for direct-to-consumer advertising.”
Sec. Clinton’s proposal, however, fails to address whether companies would actually reinvest their monies back into research if a return on investment, through marketing, is not protected. To that end, there have been numerous critics to such a plan.
Most recently Mollie Rosen of the American Association of Advertising Agencies (4As) wrote an Op Ed where she pointed to the “huge impact” healthcare communications and advertising have on people’s lives. To that end Dick O’Brien, the 4A’s EVP and director of government relations asserted that trade group will begin lobbying against any proposed DTC ban.
Like the 4A, the biotech industry also responded to Secretary Clinton’s proposal. PhRMA president and CEO, John Castellani, warned that such proposals, if they become laws, “would kill jobs, risk patient safety and halt investment in new cures for diseases such as Alzheimer’s, Parkinson’s and cancer.” The Association of National Advertisers (ANA) also responded to the proposal and called it “misguided and unconstitutional” and likely to fail on a variety of grounds:
The ANA believes that such proposals were effectively posturing by Fmr. Sec. Clinton and pointed to previous attempts at similar proposals. The ANA pointed out that “Congress rejected many of these proposals to restrict DTC advertising in 2007 when they passed major legislation reforming the FDA. The Congress also rejected these types of prescription drug ad tax proposals when they were put forward in 2009.”
The ANA described restricting these ads or denying the tax deduction for DTC marketing costs as “unwise and counterproductive” since these ads constituted “health awareness and helps consumers prevent serious health problems through earlier disease diagnosis.