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Michelle Hoffman, editorial director of Pharmaceutical Technology.
Is it good policy to pay for bad behavior?
I have no doubt of Congress's good intentions. They want to protect us from predatory lenders, from the overwrought claims of advertisers, from harmful ingredients in our foods and drugs, but also increasingly, from ourselves. I'm thinking specifically of the bill passed by the Senate on June 11, 2009, that mandates cigarette manufacturers to disclose the ingredients in tobacco products and gives the US Food and Drug Adminstration the authority to oversee these products. While I am in no way advocating the use of tobacco, I also wonder what, ultimately, such a bill will accomplish.
I could understand the need for some kind of regulation if cigarette manufacturers were still allowed to make claims that cigarette smoking were healthful—all the while knowing that it was not. But those days are long past. I refuse to believe that anyone over age 18—the age at which one can legally purchase tobacco products—is unaware of the health risks associated with tobacco use. If not, I'd be happy to tell them: The use of tobacco significantly increases your risk for heart and lung disease. And although I think full disclosure is important—tell smokers about all of the ingredients in their cigarettes—I'd be very surprised if such disclosures will dramatically decrease the number of people who smoke. Short of making tobacco use illegal, there is little the government can do to prevent its use. Those who choose to smoke do so in spite of the known risks. There will always be people willing to take those risks.
And that brings me to my next point. At the same time our representatives are protecting us from our own bad behavior, they're protecting us from paying for it, too. In discussions of how to subsidize a national healthcare policy, there appears to be no notion that people who knowingly engage in risky health behaviors—and are therefore more likely to require expensive healthcare—should bear a greater share of the health insurance cost. Instead, we get bizarre proposals, such as the one made by US Rep. Charles Rangel (D-NY), chairman of the House Ways and Means Committee, that would prevent drug companies from claiming a tax deduction on their advertising expenses. Rangel estimates this act would generate some $37 billion in savings, which could be applied to healthcare, according to a July 16 report on Bloomberg.com.
Companies—in all industries—pay no taxes on money spent for advertising. Advertising costs are considered to be business expenses and are subtracted from revenues before taxes are calculated. Only profits are taxed, notes Clark Rector, a spokesperson for the American Advertising Federation in Washington, DC.
The Rangel proposal would in fact tax the money drug manufacturers spend on advertising, but would not impose similar taxes on companies operating in any other industry. That tax may be discriminatory to drugmakers and may violate the First Amendment (a position on which both the conservative DC-based Washington Legal Foundation and the more liberal American Civil Liberties Union agree, notes Rector). But the bill proposal has me wondering why Rangel would single out drug advertising? Is the notion that the revamped healthcare policy would enable more Americans to buy drugs and would boost drugmakers' profits—a circumstance for which drugmakers alone ought to pay?
In any event, the people not paying for healthcare are those who, by their risky behavior, may require more and more expensive use of the healthcare system—people like tobacco users. Put together, I see a policy that coddles risk-takers while requiring the government (not the individual) to restrict risky behavior, and at the same time, creating a moral hazard by protecting risk-takers from the expenses generated by their bad choices.
A good society should alert people of potential dangers. Should that society also absolve risk-takers of any responsibility or requirement to bear the economic consequences of their choice to disregard those dangers?
Michelle Hoffman is editor-in-chief of Pharmaceutical Technology. Send your thoughts and story ideas to email@example.com