Coalition Calls on U.S. Congress to Repeal the Cough and Cold Tax

New tax restrictions on OTCs will impact 35 million Americans

Washington, D.C. (November 18, 2010)—Today, a broad coalition that represents 39,000 pharmacies, 27,000 retail food stores, 62,000 pharmacists, and the makers of over-the-counter (OTC) medicines sent a letter calling on the U.S. Congress to repeal the requirement that prevents consumers from using their flexible spending accounts (FSAs) to purchase OTC medicines without a prescription. This provision, enacted into law as part of the Patient Protection and Affordable Care Act, removes OTC medications from the list of eligible medical expenses for FSAs and health savings accounts (HSAs), effective January 1, 2011.  The Consumer Healthcare Products Association (CHPA), the National Association of Chain Drug Stores (NACDS), the National Grocers Association, the Food Marketing Institute, the American Pharmacists Association, and the National Community Pharmacists Association are seeking a repeal or delay of this provision.

“Meaningful healthcare reform is about increasing access and cutting costs. Removing OTCs from FSA eligibility is counter to that philosophy and forces consumers to obtain a prescription to use money from their FSA accounts to purchase the OTC medicines they depend on as a first line of defense for their families’ healthcare needs,” said Scott M. Melville, CHPA’s president and CEO.

FSAs, which are offered by 85 percent of large employers, make everyday medical expenses more affordable. The availability of OTC medicines through an employer-sponsored FSA provides valuable cost-savings to consumers, increases worker productivity and encourages smart healthcare decisions by both employers and employees—all of which are consistent with the goals of healthcare reform.

“This new restriction will eliminate a tool that 35 million Americans have come to depend on to cost-effectively purchase medicines they need, when they need them,” continued Melville.  “As Congress considers extensions of current tax cut policy, they should also be mindful of the middle-class working families who will see their FSA benefits slashed if this provision is not repealed."

“As the face of neighborhood healthcare, pharmacies are in the business of providing remedies in an accessible, consumer-friendly way.  These new rules inject consumer confusion and logistical burdens that disrupt efficient patient care, at the exact time when patients are feeling their worst,” said NACDS President and CEO Steven C. Anderson, IOM, CAE.

Editor’s note: Visit CHPA’s press room for the online release and a copy of the letter.

Contacts: CHPA—Elizabeth Funderburk, 202.429.9260
NACDS—Chrissy Kopple, 703.837.4266


The Consumer Healthcare Products Association (CHPA) is the 129-year-old-trade association representing U.S. manufacturers and distributors of over-the-counter medicines and nutritional supplements.

The National Association of Chain Drug Stores (NACDS) serves members including traditional drug stores, supermarkets, and mass merchants with pharmacies – from regional chains with four stores to national companies – as well as pharmacy and consumer packaged goods suppliers and service providers.