Drug Industry Deducts Advertising Costs

Bloomberg News reports (http://www.bloomberg.com/apps/news?pid=20601103&sid=aeEJZicjYE60) that Rep. Charles Rangel, chair of the House Ways and Means Committee, is considering a way to raise an extra $37B to support health reform--end a current tax deduction that the drug industry enjoys for its direct-to-consumer ads. (As most of the discussion of the costs of health reform address estimates for a 10-year period, I am assuming that we are talking about that sum of money spread over a decade.)

The article provides no real background on the deduction, or the reasoning behind it, but makes clear that we are not talking about a brand-new tax but the repeal of an existing tax deduction. (I admit that I am not aware myself of most of the backstory here.)

Until such time as I am enlightened by those in the know, I will presume that we have here yet another case of the drug industry talking out of both sides of its mouth when it goes into propaganda mode. The industry takes every possible opportunity to wrap itself in the mantle of the so-called "free market." The industry also takes every tax deduction that it can get friendly legislators to grant it. A good source on the many tax deductions enjoyed by the industry is Marcia Angell's The Truth about the Drug Companies.