Rep. Scholten Introduces Bipartisan Bill to End Tax Breaks for Drug Ads, Focus on Affordability and Innovation

WASHINGTON, DC – U.S. Congresswoman Hillary Scholten (MI03), alongside Reps. Greg Murphy, M.D., Angie Craig, and Nick Begich, introduced the bipartisan No Handouts for Drug Advertisements Act, which would no longer allow for-profit drug companies to receive special tax breaks for the advertising of their products.

“I’m committed to rooting out waste and abuse in our budget at every turn, and this is a big one,” said Rep. Scholten. “This bill alone would cut our federal deficit by billions annually. Families in West Michigan and across the country are feeling the pinch of rising health care and prescription drug costs, and every dollar spent on TV ads is a dollar not going to lowering drug prices or funding life-saving research. The No Handouts for Drug Advertisements Act is a smart, bipartisan step to lower health care costs and rein in waste in our budget.” 

By removing the tax deduction for ads, the No Handouts for Drug Advertisements Act would help curb wasteful spending and increase federal tax revenue—an estimated $1.5 to $1.7 billion annually from just ten of the largest pharmaceutical companies. These are the kinds of bipartisan solutions that should be considered by Congress, rather than the proposed drastic cuts to Medicaid. For nearly one in four Americans, affording medication is a struggle. While drug companies rake in tens of billions, millions of Americans are forced to decide whether to skip doses or stop taking their medications altogether, simply because they cannot afford the prescriptions they need.

The United States is one of only two countries in the world that even allows direct-to-consumer pharmaceutical advertising at all. These marketing campaigns drive up consumer demand for costly, brand-name medications—often when cheaper or more appropriate alternatives are available—without improving health outcomes. In 2023 alone, pharmaceutical spending in the U.S. rose 13.6% compared to the previous year, reaching a staggering $722.5 billion. Drug companies currently spend around $6 billion per year on advertising.

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