TV commercial breaks are flooded with direct-to-consumer drug ads these days. They usually have someone jogging or a grandparent hugging their grandchild and then a narrator butts in with a long list of possible side effects.
Drug companies get tax breaks for those commercials and Maryland lawmakers want to end it.
A new bill would require drug companies to calculate how much they spend on drug advertising in Maryland and pay taxes on that if they are writing them off.
“Pharmaceutical manufacturers spent an estimated $14 billion on these ads in 2023 and these costs inevitably get passed down to businesses, governments and of course, consumers who are struggling to pay for their prescriptions,” said Del. Natalie Ziegler, (D-Howard County). “We all pay for these ads in the form of higher drug prices and overall higher health care costs.”
Any revenue Maryland gets from the change in taxes status would go to paying for Medicaid in Maryland and for the Maryland Health Benefit Exchange, the state’s public health insurance marketplace.
The U.S. is only one of two countries in the world that allow direct-to-consumer drug ads, the other is New Zealand.
During a hearing on the bill last week, some lawmakers were concerned that it may be hard for companies to parse out exactly how much they spend on advertising in Maryland. Media markets overlap between states and social media ads come from many different areas.
During the hearing it was noted that other industries already have to take into consideration certain things that are not tax deductible in Maryland, which are deductible in other jurisdictions, meaning it is possible for companies to figure out the numbers.
Opponents of the bill say the ads help people ask their doctors about illnesses they may not know they had.
“I think there's a number of different chronic conditions and many other conditions that people simply aren't aware of. They just know they're hurting. This gives them that opportunity [to bring it up with their provider],” said Kristen Parde, the deputy vice president for state advocacy at the Pharmaceutical Research and Manufacturers of America, a trade group backed by some of the largest drug companies.
If passed the bill would go into effect in July.
