Sens. Al Franken (MN), Sherrod Brown (OH), Tom Udall (NM) and Sheldon Whitehouse (RI) have introduced S. 1763, a bill to disallow the business expense deduction for all advertising and marketing of pharmaceutical medications as a way to help pay for healthcare reform. The legislation, Protecting Americans from Drug Marketing Act, will have a direct and negative impact on broadcasters’ advertising revenues. The amendment represents a tax on free speech that is protected by the First Amendment, and it would dramatically reduce advertising dollars for radio and television as individual stations are struggling to survive an economic recession. Advertising revenue is critical to stations and this change in law would harm broadcasters’ ability to continue to serve their local communities with vital news and information. Congress must understand that the potential for short-term revenues will be far outweighed by the precedent it would establish and the repercussions for the treatment of all forms of advertising. If Congress is successful in repealing the tax deduction for direct-to-consumer advertising on pharmaceuticals, this would set a dangerous precedent and leave advertising open on a number of fronts as Congress looks for a way to raise revenue in a challenging economy.

NAB is actively monitoring this issue and will keep members engaged and informed.