Pharmaceutical Advertising

So the house is currently considering a proposal to disallow the "ordinary and necessary business expense" of advertising for the pharmaceutical industry (it will still be allowed for every other industry). The stated intention is to help pay for health care reform through the elimination of this tax deduction. But unless I'm wrong, I think the upshot will be that since advertising for Rx drugs will be much more expensive, pharma companies with decrease the amount of advertising they do. Although there would be some additional corporate tax revenue for the Federal government that would result, another result would be that there would be a lot less information published on available Rx therapies (after all, almost all patient support and patient education campaigns are considered advertising).

I might also suspect that the likely reduction in requests for branded Rx products, espeically by patients on Medicare/Medicaid, would also result in fewer branded scripts and more (cheaper) generic scripts - which certainly would also be in the best interest of lowering government expenses for health care. But it might do so at the expense of providing the best available treatments to some of these patients.

It will be very interesting to watch how this evolves.