— John Kamp is Executive Director of the Coalition for Healthcare Communication
Outside-the-beltway folks often tend to understand politics much better than in-the-thick-of-it insiders and the 2016 Presidential race certainly highlights that tendency.
Indeed, you outsiders need to help me and other insiders understand the race for the party nominations. For my part, the best explanation for the success of Bernie Sanders and Donald Trump vs. the traditional party favorites of Hillary Clinton and Jeb Bush is that we are still in the entertainment phase of the election, rather than in the truly political phase.
For example, my political activist friends repeatedly said that Trump has crashed – when he called many Mexicans rapists, when he asserted that McCain was no war hero, and when he faced “real” politicians in debates. No matter those assertions, Trump continues to lead in the polls and seems unbeatable on his way to the Republican nomination.
So you need to tell me what’s going to happen next in the nomination process, and then perhaps I can tell you what may happen on the medical communication front. Elections are important. Make no mistake about it. Whoever heads the ticket will be crucial, not only in determining who could next occupy the White House, but also in parsing out what might happen next in the Senate and the House on major medical policy matters.
Let’s look at the possibility of a change in the tax deductibility of marketing costs as the next Congress considers a major overhaul of the corporate tax system. Wall Street and Washington agree that an overhaul is necessary in order to stem the tide of companies – including high-profile life science companies – from moving overseas.
While tax legislation starts in the House and is advanced in the Senate, the person who ends up in the White House couldn’t be more significant. If a Democrat controls the White House, the tax priorities are ensured to be broader than just corporate tax. Clinton, for example, has called for a change in capital gains rates for individuals rather than a change for corporations. Calls for comprehensive income and corporate tax changes will increase the pressure to find “business loopholes” to expand the tax base.
Often – and wrongly – the deductibility of marketing expenses is seen as one of those loopholes. In fact, the Government Accountability Office already has asserted that a scheme to defer half the deduction and amortize it over 10 years could lead to $169 billion in increased tax revenues. That’s a tax bump on our business that clearly will decrease life sciences companies’ interest in advertising.
Meanwhile, if candidate Trump becomes President Trump with a major Republican sweep in the Congress, the victors certainly will consider that outcome a mandate to overhaul Obamacare. It’s not at all clear what such legislation might look like, but at the very least it could endanger the substantial increase in prescriptions to the newly insured that has helped bolster our businesses.
So, cue me in on what’s really happening in this election and stay tuned to this space to see how it might affect our business. Entertainment notwithstanding, politics do matter.