House Eyes Taxing Drugmakers For Ad Costs
The United States House of Representatives is contemplating legislation which would tax drugmakers to the tune of nearly $37 billion in order to help pay for the nation's health care overhaul. Currently, drugmakers are permitted to deduct their direct-to-consumer advertising costs for prescription drugs. The proposal is only one of many revenue-raising measures that are being discussed as a way to fund a plan being drafted by House Democrats which would include $600 billion in tax increases and $400 billion in cuts to Medicare and Medicaid.
Drugmaker advertising has come under fire in recent months, and House Ways and Means Committee Chairman Charles Rangel has stated that it's improper for taxpayers to subsidize pharmacuetical ads because such ads actually encourage consumers to request drugs that they might not actually need. However, the proposed change has sparked outrage from drugmakers and ad groups, who claim that such measures violate First Amendment freedom of speech and unfairly target one industry.
While tax increases are seldom (if ever) met with universal approval, the fact remains that cuts and revenue-raising will have to take place at some level given the current budget deficit. Furthermore, taxpayers may be more amenable to plans that would tax drugmakers as opposed to taxing employer-provided health insurance, another idea which has been tossed around in Congress recently.
