April 19, 2012

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

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.”