Shaheen Reintroduces Bill to Stop Big Pharma from Exploiting Advertising Tax Loophole

January 30, 2021

**Shaheen’s legislation would eliminate federal tax deductions for drug advertisements**

(Washington, DC) – Today, U.S. Senator Jeanne Shaheen (D-NH) introduced the End Taxpayer Subsidies for Drug Ads Act, a bill that would 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 taxpayer dollars are used to subsidize drug advertisements.

“The influx of drug ads on the airwaves isn’t just frustrating for viewers and listeners; it’s a waste of taxpayer dollars and it drives up the cost of prescription drugs,” said Shaheen. “Big Pharma has funneled billions of dollars to exploit this loophole without any repercussions, making the life-saving medications that patients need all the more expensive. This deceptive practice rips off the American public and must end. I’ll continue holding pharmaceutical companies accountable for their actions and work to lower drug costs for Granite Staters.”

"As patients suffer from skyrocketing prescription drug prices, manufacturers take advantage of a rigged system that gives drug corporations billions of dollars in tax breaks on direct-to-consumer ads,” said Sarah Kaminer, Bourland Legislative Director of Patients For Affordable Drugs. “This legislation from Senator Shaheen will eliminate Big Pharma’s tax loophole and end the practice of patients and taxpayers subsidizing the marketing budgets of drug corporations.”

Advertising expenses by pharmaceutical drug manufacturers have more than quadrupled over the past two decades, rising from $1.3 billion in 1997 to $6 billion in 2016. In that same time period, advertising from drug companies has increased from 79,000 ads to 4.6 million ads, including 663,000 TV commercials. Economists have estimated that nearly one third of the growth in United States drug spending can be attributed to the increase in advertising for prescription drugs. This aggressive advertising also increases demand and allows drug companies to increase prices. The End Taxpayer Subsidies for Drug Ads Act would eliminate this tax deduction for drug advertising costs.

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 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, she introduced the Fairness in Orphan Drug Exclusivity Act, which would close the orphan drug loophole that drug companies use to keep competition off the market and rake in profits. 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. 

###