Shaheen Reintroduces Bill to Stop Big Pharma from Exploiting Advertising Tax Loophole
(Washington, DC) – U.S. Senator Jeanne Shaheen (D-NH) recently reintroduced the No Tax Breaks for Drug Ads Act to prohibit pharmaceutical drug manufacturers from claiming tax deductions for expenses on advertising directly to consumers. Under current law, drug manufacturers are allowed to deduct the cost of advertising expenses from federal taxes, meaning taxpayers pay more of their hard-earned money for life-saving drugs while drug manufacturers get a tax break. U.S. Representative Elissa Slotkin (MI-07) introduced a companion bill in the House of Representatives.
“Big Pharma should not receive tax breaks that allow them to raise prices on life-saving medications for consumers and families,” said Senator Shaheen. “It’s well past time for Congress to step in to end these tax breaks and lower costs for everyday Americans. High drug prices are one of the most pressing concerns I hear from Granite Staters, and I’ll continue working to lower drug prices and hold pharmaceutical companies accountable.”
“It seems hard to believe, but the drug companies get generous tax breaks for those horrible ads that they run on TV to promote their own products to the tune of billions of dollars. It's time for those tax breaks to stop,” said Representative Slotkin. “Michiganders can barely turn on the TV before they’re flooded with ads that promote the most expensive name-brand drugs – and it turns out that Michigan taxpayers are subsidizing those ads on behalf of the richest pharmaceutical companies in the world. Closing this tax loophole is important to making sure that companies are prioritizing innovation that help Michiganders, not ads.”
The bill is cosponsored by U.S. Senators Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Sherrod Brown (D-OH), Tammy Duckworth (D-IL), Dick Durbin (D-IL), Mazie Hirono (D-HI), Tim Kaine (D-VA), Angus King (I-ME), Amy Klobuchar (D-MN), Joe Manchin (I-WV), Chris Murphy (D-CT), Jack Reed (D-RI), Bernie Sanders (I-VT), Elizabeth Warren (D-MA), Peter Welch (D-VT), Sheldon Whitehouse (D-RI) and Chris Van Hollen (D-MD).
"While U.S. courts have ruled that advertising is speech and protected under the First Amendment, we shouldn't incentivize direct-to-consumer prescription drug ads with tax breaks. As one of only two countries permitting such advertising, the U.S. is an outlier,” said Patients For Affordable Drugs Now founder David Mitchell. “Senator Shaheen and Congresswoman Slotkin's bill seeks to reduce those ads which aim to drive-up drug sales and prices. That would be a good outcome for patients and the country.”
Shaheen has led efforts in Congress to combat rising drug prices and prevent drug manufacturers from abusing the drug approval process to limit market competition. Skyrocketing prescription drug pricing is particularly problematic in states like New Hampshire that have been hardest hit by the opioid epidemic and where first responders carry Naloxone – the antidote that reverses opioid overdoses. As co-chair of the bipartisan U.S. Senate Diabetes Caucus, Senator Shaheen has consistently pressed to hold insulin manufacturers, insurers and pharmacy benefit managers accountable for the skyrocketing cost of life-saving insulin.
Last year, Shaheen introduced the Ensuring Timely Access to Generics Act which would work to increase competition from generic drugs through better oversight of the Food and Drug Administration’s (FDA) citizen petition process. Senator Shaheen has also advocated for legislation that would allow for Medicare to negotiate drug prices on behalf of seniors and continues to support bipartisan efforts to help reduce the costs of prescription drugs by allowing individuals to safely import FDA-approved prescription drugs from Canada. Shaheen pushed for the inclusion of a provision in the Inflation Reduction Act that capped out-of-pocket costs for Medicare patients with diabetes by ensuring that Medicare Part D and Medicare Advantage health plans limit copays or coinsurance to no more than $35 per month, 25% of list price, or 25% of the negotiated price.
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