Healthy Skepticism Library item: 14414

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Silverman E.
Congressman Warns DTC Tax Break May Get Axed
Pharmalot 2008 Oct 2
http://www.pharmalot.com/2008/10/congressman-warns-dtc-tax-break-may-get-axed/

Full text:

Rahm Emanuel, an Illinois Democrat, warned advertising industry leaders that the business-tax deduction for DTC spending could be taken away in 2009 tax legislation, according to DTC Perspectives.
In a recent meeting with the government affairs committee of the American Association of Advertising Agencies, the newsletter writes Emanuel presented two options for pharma in new tax legislation: retain the tax credit for R&D spending, or keep the business expense deduction for DTC ads – but not both.
“He said this without any tinge of satire, so you have to accept him at his word,” one ad industry advocate familiar with the meeting tells DTC Perspectives, which claims an average drugmaker spends roughly 10 times more on R&D each year than on consumer promotion (although we recall that SG&A expense line often doesn’t break out marketing so neatly).
Emanuel’s office was asked to comment, but had not responded to the newsletter as of this morning. Emanuel, by the way, sits on the House’s Ways and Means Committee, which controls and writes all tax legislation, and he also chairs the House’s Democratic caucus.
The newsletter notes pharma would argue changing its tax status is unconstitutional. “The motivation, it can be clearly argued, is not sound tax policy, but the motivation is to suppress speech,” Jim Davidson, an attorney with the Polsinelli law firm, tells DTC Perspectives. “When you use the Tax Code to suppress speech, that is a violation of the First Amendment.”
Hmm… But would speech be suppressed? Or just become a non-deductible item? What do you think?