CHPA Gives Two Thumbs Up for Legislation to Make OTCs Tax Deductible Medical Expenses

Bill Would Provide Consumers with Real Savings for Real Medicines

Washington, D.C. (November 24, 2003)—The Consumer Healthcare Products Association (CHPA) celebrated the introduction of legislation by Congressman Jim DeMint (R-S.C.) and Congresswoman Louise Slaughter (D-N.Y.) to amend IRS Internal Revenue Code Section 213 so that over-the-counter (OTC) medicines would be allowed as a deductible medical expense for taxpayers who itemize their deductions.

“Representatives DeMint and Slaughter should be congratulated for undertaking this extremely important initiative,” said CHPA President Linda A. Suydam, D.P.A. “OTC medicines are an integral part of our nation’s overall healthcare system and the millions of consumers who use them each year should be allowed to offset the costs of these products just as they do other medical expenses such as prescription drugs, crutches, and contact lenses.”

The November 21 introduction of H.R. 3596, The OTC Medicine Tax Fairness Act, comes on the heels of an IRS ruling published in September 2003 that allows employees to pay for OTC medicines with pre-tax dollars from their employer-provided flexible spending accounts (FSAs).

In addition to supporting coverage of OTC costs with FSA monies, CHPA has been a longtime advocate for giving OTCs tax deductible status. When used appropriately, OTC medicines are safe and effective for the treatment and prevention of many common ailments and recurring conditions and also help suppress the rising costs of healthcare. Because OTC medicines are so convenient, however, they can be taken for granted and overlooked in the larger healthcare picture.

“If you factor in the costs for prescriptions, doctor visits, lost time from work, insurance costs, and travel, OTCs have always been a cost-effective option for consumers,” said Suydam. “This legislation seeks to help consumers even more, especially lower income families and the elderly, by giving OTCs parity with other deductible medical expenses.”

While the bill will allow OTC medicines as deductible expenses, it does not change the requirement that the deduction may be taken only for those whose expenses exceed 7.5 percent of adjusted gross income. In the immediate future, CHPA plans to educate the rest of Congress on TheOTC Medicine Tax Fairness Act in order to ensure its passage.

“This is really a win-win for the American public,” said Suydam. “We hope that Congress will fully embrace this measure so that consumers will be able to reap additional benefits from the medicines they already know and trust.”

For more information on CHPA’s position on this issue, click here [link 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-the-counter medicines and nutritional supplement products.