Washington, D.C. — Congressman Greg Murphy, M.D., along with Rep. Angie Craig, Rep. Nick Begich, and Rep. Hillary Scholten, introduced the No Handouts for Drug Advertisements Act, legislation to prohibit the tax deduction for expenses related to direct-to-consumer advertising of prescription and compounded drugs.
"Direct-to-consumer drug advertising can promote inappropriate prescribing practices, undermine the doctor-patient relationship, and increase unneeded spending on medications," said Congressman Greg Murphy, M.D. "America is one of only two nations in the world that allows pharmaceuticals to be marketed directly to consumers. Patients should trust their doctor for medical guidance, not 30-second TV ads. This legislation ensures that resources are directed towards lowering drug costs and investing in the research and development of new, life-saving treatments."
Background
This legislation eliminates the tax deduction companies can claim for pharmaceutical marketing and promotional expenses related to advertising on television, radio, social media, and other common platforms.
In 2023, overall pharmaceutical expenditures in the US grew 13.6% compared to 2022, for a total of $722.5 billion.
U.S. Government Accountability Office found that nearly all DTC spending was on brand-name drugs, with about two-thirds concentrated on 39 drugs. The industry spent approximately $6 billion per year on U.S. DTC advertising.
The Congressional Budget Office estimates that a 10% increase in DTC advertising is associated with a 1 to 2.3% increase in drug spending.
The Campaign for Sustainable Rx Pricing estimates that prohibiting pharmaceutical advertising could increase federal tax revenues by $1.5 to $1.7 billion annually from 10 of the largest pharmaceutical companies operating in the U.S.