Time to End Tax Breaks for Direct-to-Consumer Prescription Drug Ads

The U.S. is one of only two countries — the other being New Zealand — that allow direct-toconsumer (DTC) prescription drug advertising. A recent study published in the Journal of the American Medical Association (JAMA) revealed that spending by pharmaceutical companies on such advertising increased from $1.3 billion in 1997 to $6 billion in 2016.[1]

The JAMA study likewise found that the number of television advertisements for prescription drugs skyrocketed from 72,000 in 1997 — when the FDA opened the floodgates by loosening guidelines on the amount of information that must be included in the ads regarding the uses and adverse effects of drugs[2] — to 663,000 in 2016.[3]

Disturbingly, the U.S. government for years has subsidized this onslaught of DTC prescription drug advertising by allowing manufacturers to deduct the costs associated with producing these ads as a business expense on their annual tax returns. However, lawmakers in the U.S. Senate in January introduced a bill — the "End Taxpayer Subsidies for Drug Ads Act" — that would eliminate this unnecessary, harmful corporate tax break.[4]

Public Citizen’s Health Research Group for years has voiced serious concerns about DTC broadcast drug ads, primarily because they often supplant the knowledge and judgment of the physician in determining whether a particular drug is most suitable for a particular patient. Although a physician must actually prescribe an advertised prescription drug product, there is ample support for the idea that patient pressure increases the likelihood that a physician will prescribe a particular drug, even if another medication or even nonpharmacologic treatment would be a better choice.

Furthermore, there is little relationship between true public health needs and the subject of DTC advertising. Predictably, DTC ads for drugs have focused on the newest and most expensive prescription drugs. One never encounters advertisements for generic drugs, which have the best understood safety profiles and often are the most cost effective medications available. As a result, DTC prescription drug advertising drives up the cost of health care, as patients are induced to request newer, more expensive medications instead of equally effective, older, often safer generic alternatives.

Finally, research has shown drug ads often fail to fully adhere to FDA regulations governing such ads.[5] For example, these ads often lack a fair balance in the presentation of risks and benefits and are designed to distract viewers from important risk information.

Although pharmaceutical companies are legally permitted to advertise their products directly to consumers, there is no reason for the government to continue subsidizing such communications that undermine public health.
 

References

[1] Schwartz LM, Woloshin S. Medical Marketing in the United States, 1997-2016. JAMA. 2019;321(1):80-96

[2] Lurie P. DTC Advertising Harms Patients and Should Be Tightly Regulated. J Law Med Ethics. 2009;37(3):444-450.

[3] Schwartz LM, Woloshin S. Medical Marketing in the United States, 1997-2016. JAMA. 2019;321(1):80-96.

[4] Congress.gov. S.73 – End Taxpayers Subsidies for Drug Ads Act. 116th Congress (2019-2020). https://www.congress.gov/bill/116th-congress/senate-bill/73. Accessed April 2, 2019.

[5] Klara K, Kim J, Ross JS. Direct-to-consumer broadcast advertisements for pharmaceuticals: Off-label promotion and adherence to FDA guidelines. J Gen Intern Med. 2018;33(5):651-658.