March 4, 2004

Legislative Activity

Date:March 4, 2004

To: AAF Members and Staff

From:Jeff Perlman, EVP-government affairs
Clark Rector , SVP-government affairs
Jennifer Akridge , manager-government affairs

Re:DTC Advertising Tax

We believe that some Senators are searching for any bill to be voted on by the Senate shortly, that they could use as a vehicle to place a tax on prescription drug advertising by any company that opposes the importation of prescription drugs from other countries via Canada.

Please contact your Senators and ask that they oppose this tax on advertising.
Points:

  1. An amendment may be offered that is designed to punish with a new tax any company that opposes the reimportation of prescription drugs into the United States.
  2. The amendment is expected to deny to those companies a deduction for the cost of their advertising.
  3. This is a tax on commercial speech, and we believe this tax is in direct violation of the First Amendment.
  4. The Supreme Court has broadened substantially the protection for commercial speech under the First Amendment and this amendment appears to clearly violate the standards set down by the court.
  5. It would punish the companies because of the content of their speech.  It does not propose to tax advertising for food or clothing or motor vehicles.  It proposes to tax only the advertising of prescription drugs.
  6. It is a tax that is designed to discourage speech about prescription drugs and that is not constitutional.

Click here for additional talking points prepared by our outside counsel. Please call us with any questions.

Thank you.