CHPA Applauds IRS’ Move to Allow Americans to Purchase OTC Medicines Through Flexible Spending Accounts

Making OTCs Tax Deductible Is the Next Logical Step for Congress, Says Association

Washington, D.C. (September 3, 2003)—In a recent surprise move, the Internal Revenue Service (IRS) announced that Americans will now be allowed to pay for OTC medicines with pre-tax dollars through healthcare flexible spending accounts.

"This is welcome news," opined CHPA President Linda A. Suydam, D.P.A. "We have been discussing this issue with Congress and the Administration for the past year and are pleased to see some progress being made."

In a September 3 press release, the IRS explained that Revenue Ruling 2003-102 clarifies that employees may be reimbursed from their flexible spending accounts for the cost of OTC medicines. Revenue Ruling 2003-102 will be published in the Internal Revenue Bulletin September 22.

"This is certainly a great day for American consumers and will provide real relief for those fortunate enough to have flexible spending accounts," said Suydam. "Congress should take one additional step and allow for OTCs to be a deductible medical expense," she added.

OTC medicines meet an important healthcare need by providing safe, effective, and convenient options for a variety of common ailments. While the cost savings of using OTCs are well established, there is a growing awareness among consumers and healthcare professionals that these medicines can help prevent serious illnesses, treat chronic conditions, and enhance quality of life.

In addition to supporting the purchase of OTCs with flexible spending account funds, CHPA has also been on public record calling for OTCs to be a tax deductible medical expense.

For more information on CHPA's position on this issue, click here [link is no longer available].

Contacts: Donna Edenhart and Virginia Cox, 202.429.9260


CHPA is the 122-year-old trade association representing U.S. manufacturers and distributors of over-thecounter medicines and nutritional supplement products.