Stabenow bill a prescription for trouble

May 20, 2002  •  Post A Comment

A legislative battle is shaping up in Washington that could leave the television business, the pharmaceutical industry and the advertising sector with a bad case of heartburn.
At the center of the high-stakes struggle are those ubiquitous TV commercials for the “purple pill” and other prescription drugs-ads that have proliferated so much in recent years that they have triggered a potentially painful acid “reflex” in some members of Congress.
With Sen. Debbie Stabenow, D-Mich., leading the charge, a number of lawmakers have decided the ads carry too high a price for the public, translating into higher prescription drug prices and perhaps cutting into funding for research into new drugs.
With the support of Senate Majority Leader Tom Daschle, D-S.D., Sen. Stabenow earlier this month introduced legislation targeting the advertising tax deduction of pharmaceutical manufacturers whose ad budgets exceed their research budgets. The television, advertising and pharmaceutical industries responded immediately with sharp, unified opposition.
Industry groups are right to object to the Stabenow measure. It’s a bad idea. And it has implications beyond the industries in its immediate sights. It would set a nasty precedent and have the potential to damage any business that advertises-along with any medium that carries advertising.
The advertising tax deduction, which all businesses enjoy, is a fundamental principle of the free market. Advertising is part of the cost of doing business, and as such it can be written off against profits. It’s as simple as that. Once the government starts interfering with that model, it finds itself in treacherous territory.
For one thing, opponents argue that such regulation would violate the First Amendment-raising the prospect of a costly court battle and the possibility that the Supreme Court would ultimately throw out the rule.
Opponents also make the case that prescription drug commercials promote public health by convincing viewers to consult with their doctors. That effect may be what brought on the negative attention in the first place, as insurance companies, which have to pay for those doctor’s visits, are reportedly behind the pressure on the drug ads. If history is any indication, whatever the insurance companies want is rarely going to benefit the public.
We sympathize with the desire of Sen. Stabenow and other lawmakers to encourage drug research. But the new legislation goes about it the wrong way. By discouraging drug makers from advertising, the measure would impair their ability to market and sell their products. And if they can’t sell new drugs, why spend the money to develop them?
Lawmakers would do well to focus on incentives to encourage research, but they should leave the advertising side of the equation alone.#