April 19, 2012

Pharmaceutical Industry Hires Up Super-Lobbyist To Defend Special Tax Break

Jim Davidson

We’ve all seen them. Television commercials from Big Pharma promising love and happiness if we take the products being advertised. Kathleen Slattery-Moschkau, a former 10 year Pharma sales rep, in 2009 explained how the industry manipulates consumers with its advertising: “We’ve seen the industry medicalizing so many different things throughout your life. If you’re shy, take a pill. If you’re a little anxious take a pill.” Watch her explain how the industry advertises:

 

It’s true that medical drugs are an important component in the American health care system, but the commercials pushed by big drugmakers are sometimes incredibly deceptive, despite reaching millions of people.

And while most businesses can deduct marketing costs from their tax bills, the pharmaceutical industry gets rare and coveted direct-to-consumer access through its television advertising while getting to deduct costs for this marketing. According to FireDogLake’s David Dayen, there are only two countries in the world that allow this — New Zealand and the United States.

Some Members of Congress don’t think we should provide such a huge tax break to an industry with such special access to consumers. Last year, Rep. Jarrold Nadler (D-NY) introduced a bill to disallow these special tax breaks that effectively subsidize the pharmaceutical industry’s drug barrage on the American people. “There is absolutely no reason for the federal government to provide major tax breaks to pharmaceutical companies creating advertisements for their own financial enrichment,” said Nadler.

But the Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry’s trade association, wants to protect its special tax break. According to the Blog of Legal Times (BLT), PhRMA just hired the lobbying firm Polsinelli Shugart to lobby on “tax issues related to the deductibility of advertising costs.” Polsinelli partner James Davidson will be handling the PhrMA account.

Davidson is a veritable super-lobbyist. He handles clients as diverse  as the Walt Disney Company to Time Warner to the Grocery Manufacturers Association. He is also director of The Advertising Coalition, whose members include the broadcasters, magazine companies, and other corporations that are enriched by pharmaceutical advertising.

Members of Congress like Nadler have been trying for years to take away Big Pharma’s special tax break it uses to deceptively advertise directly to Americans. Unfortunately, the tax break’s proponents are big spenders. BLT notes that PhRMA in 2011 “spent $18.79 million on federal government advocacy work done by its own staffers and outside lobbyists, according to congressional records.”

 

 

  • CatKinNY

    This country has gone insane. The American people, by paying the highest drug prices in the world, and through subsidising research and development through the NIH and our universities pays for the entire worlds pharmaceuticals; must we then forgo tax revenue also, so they can pitch us drugs most of us don’t need and are probably actively harmed by? The cost of meds is a major driver in the worlds most expensive, though only 37th most effective, health care system. To add insult to injury, while harmful bacteria have been busy evolving resistance to antibiotics, the pharmaceutical industry is not interested in developing new antibiotics, because the big money is to be found in drugs that treat chronic conditions rather than acute ones – like a fatal dose of MRSA. When a drug finally loses patent protection, the big guys don’t make it anymore, so you end up with older drugs as orphans, as recently happened with methotrexate, which is in very short supply since there was a problem at the one generic manufacturer producing it here – so kids with a particular type of leukemia can’t get what they need to get through what should be an easily overcome disease. Once again, it all comes down to getting the money out of politics. When will we revolt?

  • PCMartin

    Direct-to-consumer advertising of prescription pharmaceuticals drives medically unwarranted demand and boosts health expenditures (and pharma revenues) without delivering commensurate improvements in patient health. According to Princeton healthcare economist Uwe Reinhardt, pharmaceutical companies spend around two and a half times as much on marketing and advertising in the US as they do on research and development — which seriously weakens the common argument that the sky-high prices Americans pay for drugs are funding the world’s pharmaceutical innovation.

    One thing that is rarely mentioned in conjunction with pharmaceutical DTCA is the powerful self-censoring effect it exerts on the media. During the Clinton healthcare reform effort in the early ’90s, the media was taking in less than $300 million a year in pharma DTCA and you could hardly turn on a TV without seeing a report about Americans flocking to Canada and Mexico in search of cheaper drugs, complete with charts comparing the actual prices of commonly prescribed drugs. Fast-forward to Obama’s effort 17 years later: pharma DTCA had risen to $5.5 billion a year and price comparisons were nowhere to be found on the major networks. As pragmatic small-town journalists have long known, having a big advertising budget doesn’t just buy you a lot of advertising — it buys you friends in newsroom management. At any rate, with pharma, hospital, and MRI machine DTCA, the for-profit health sector has essentially “bought” the coverage it wants from the commercial news media and most Americans were left grossly ignorant of the facts and the true range of available solutions during the Obamacare debate. The fact that PhRMA gets taxpayers to subsidize their suborning of patients and the media through tax deductibility is rubbing salt in the wounds.

    Finally and just for the sake of accuracy, last I read, South Korea and Bangladesh also allow DTC pharmaceutical advertising — so that’s *four* countries out of a total of around 200. The US is a de facto corporatocracy with an extreme level of legalized corruption at the top; New Zealand is still drunk on Chicago School theory (although they haven’t been stupid enough to dismantle their public health system); South Korea has national medical insurance and a drug pricing policy that, while complicated, may nonetheless limit the extent to which DTCA can drive prices upward; and Bangladesh is a third-world corruptocracy. These exceptions hardly undermine the case against allowing direct-to-consumer advertising of medical products that inherently require a medical professional’s expert judgment to select and prescribe.

  • Pingback: www.gtavcc.com()

  • Pingback: Trackback()

  • Pingback: Trackback()

  • Pingback: Trackback()

  • Pingback: Read More()

  • Pingback: Trackback()

  • Pingback: Trackback()

  • Pingback: Trackback()

  • Pingback: Trackback()

  • Pingback: Trackback()

  • Pingback: Trackback()

  • Pingback: Trackback()

  • Pingback: Trackback()

  • Pingback: Trackback()

  • Pingback: Love Letters For Him()

  • Pingback: Love Letters For Her()

  • Pingback: Trackback()

  • Pingback: Trackback()

  • Pingback: Trackback()

  • Pingback: Blog()

  • Pingback: Studios()