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Divided testimony as Maryland committee weighs taxing pharmaceutical direct-to-consumer advertising
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Summary
Supporters said eliminating the state deduction for direct-to-consumer pharmaceutical ads could raise millions for Medicaid navigators and premium assistance; industry groups warned of constitutional risk, competitiveness harms and unintended effects on local newspapers. The committee heard both sides and took no vote.
A proposal to eliminate a state tax deduction for direct-to-consumer pharmaceutical advertising drew sharply divided testimony in the Senate Budget and Taxation Committee.
Supporters, including consumer advocates, AARP Maryland, health-care providers and individuals who rely on premium assistance, said SB 987 would redirect revenue toward Medicaid eligibility operations and premium subsidies and could help offset federal changes that threaten coverage for some residents. Public Citizen's research director estimated the proposal could generate tens of millions annually for the state; AARP Maryland framed the measure as a targeted way to protect older adults and ease premium pressure.
Opponents from the pharmaceutical industry, the Maryland Tech Council and publishers argued the bill singles out one industry and creates first-amendment and constitutional risks. Josh White of PhRMA warned the legislation would be "punitive" and could impose a content-based tax that courts might strike down; trade groups also said the measure could undermine Maryland's competitiveness when firms consider where to invest.
Senator Hetleman asked about constitutionality; a sponsor reading cited an attorney general letter concluding the state is not required to subsidize advertising and that the statute would likely survive scrutiny under analogous Supreme Court precedent if the state can show a substantial government interest and the regulation directly advances that interest. Witnesses on both sides debated whether the bill was narrowly tailored and whether it would unintentionally affect newspaper periodicals and bundled media buys.
The hearing included personal testimony from residents who said state premium subsidies were essential and that new revenue could fund local navigators and targeted outreach. Pharma representatives cautioned the bill could create enforcement and competitive questions and urged an unfavorable report.
The committee concluded testimony without taking a vote.
