Senate Democrats are advocating for the End Taxpayer Subsidies for Drug Ads Act, legislation that would prohibit pharmaceutical drug manufacturers from claiming tax deductions for consumer advertising expenses.
The bill, announced Friday, was initially co-authored by Sens. Elizabeth Warren (D-Mass.) and Jeanne Shaheen (D-N.H.). Advertising expenses by pharmaceutical drug manufacturers have more than quadrupled over the past two decades, they say, rising from $1.3 billion in 1997 to $6 billion in 2016. During that same time period, advertising from drug companies increased from 79,000 ads to 4.6 million, including 663,000 TV commercials. “Economists have estimated that nearly one third of the growth in drug companies’ spending can be attributed to the increase in advertising for prescription drugs,” a statement by the two senators says.
Under current law, drug manufacturers are allowed to deduct the cost of advertising expenses from federal taxes. “This aggressive advertising also increases demand and allows drug companies to increase prices,” Warren and Shaheen wrote. Their bill “would eliminate this tax deduction for drug advertising costs, ensuring that taxpayer dollars are not used to subsidize drug advertisements.”
Senate co-sponsors of the legislation include: Maggie Hassan (D-N.H.); Sherrod Brown (D-Ohio); Sheldon Whitehouse (D-R.I.); Tammy Baldwin (D-Wisc.); Kirsten Gillibrand (D-N.Y.); Chris Van Hollen (D-Md.); Jack Reed (D-R.I.); Amy Klobuchar (D-Minn.); Richard Blumenthal (D-Conn.); Mazie Hirono (D-Hawaii); Brian Schatz (D-Hawaii); and Dick Durbin (D-Ill.). Sens. Bernie Sanders (I-Vt.) and Angus King (I-Maine) have also added their support to the bill.