The regulations clearly define what constitutes advertising of a medicinal product. Expenses related to it can be included in the costs of

These are not only flyers, posters, gadgets, but also expenses for organizing events where participants are provided with food
As of January 1, 2007, expenses for representation, in particular those incurred for catering services, the purchase of food and beverages, including alcoholic beverages, cannot be included in deductible expenses under Article 16(1)(28) of the Corporate Income Tax Law. On the other hand, all advertising expenses can be a cost.
Changes in tax laws have affected the qualification of advertising expenses at pharmaceutical companies. As is known, pharmaceutical companies were able to qualify their expenses as deductible costs in a different way than other taxpayers, thanks to the provisions of the Act of 06.09.2001. Pharmaceutical Law (i.e., 2004 Journal of Laws No. 53, item 533, as amended), hereinafter referred to as "Pharmaceutical Law." In accordance with the provision of Article 52(4) of the Pharmaceutical Law, in effect until December 31, 2006, advertising of a medicinal product was treated as public advertising within the meaning of the Corporate Income Tax Act. Such regulation meant that advertising expenses of a non-public nature could be included in tax deductible expenses in full. This provision, due to changes in the tax law, was removed on January 1, 2007. From now on, all expenses related to the advertising of a medicinal product (public and non-public) can be included in deductible expenses in full (with the exception of expenses for advertising prohibited by the Pharmaceutical Law).

Various forms of advertising

At this point, it would be appropriate to indicate what types of expenses are incurred by pharmaceutical companies and what limitations arise when including these expenses as deductible expenses. Advertising expenses of pharmaceutical companies are so specific that the need arose to separately define the concept of advertising of a medicinal product. Thus, according to Article 52 of the Pharmaceutical Law, the advertising of a medicinal product is considered to be an activity of informing or encouraging the use of a medicinal product, aimed at increasing: the number of prescriptions, supply, sale or consumption of medicinal products. Such advertising includes, in particular:

1. advertising of a medicinal product to the public;
2. advertising of a medicinal product directed to persons authorized to issue prescriptions or persons trading in medicinal products;
3. Visiting persons authorized to issue prescriptions or those who trade in medicinal products by sales or medical representatives;
4. Providing samples of medicinal products;
5. Sponsorship of promotional meetings for persons authorized to issue prescriptions or those who trade in medicinal products;
6. Sponsorship of conferences, conventions and scientific congresses for persons authorized to issue prescriptions or those who trade in medicinal products.

Advertising of a medicinal product to the public

Pharmaceutical companies target the public with advertising, among other things:

• Providing printed advertising, educational and informational materials such as leaflets, pads, prescriptions, calendars, etc. to clinics, pharmacies. Usually, advertising leaflets given to pharmacies or clinics are available to a wide range of patients,
• Advertising gadgets under the value of PLN 100 given to patients,
• Posters, stands, woobblers, rollups, posters, shelfliners, which are visible in pharmacies, clinics,
• media,
• mailing,
• promotional campaigns,
• organization of competitions.

In principle, expenses for public advertising will be fully deductible. Doubts as to the possibility of inclusion in tax deductible expenses arise with respect to materials that inform about diseases, the stages of their progression, which do not contain advertising elements, such as, for example, indicating a drug that allows the treatment of disease symptoms or providing the address of a website containing information about the drug. In order for the company to be able to recognize expenses for leaflets or materials of a purely informative nature about diseases, it will have to prove their connection with its business.

Advertising of a medicinal product to doctors, pharmacists, pharmacists and drug wholesalers

Advertising of a medicinal product to doctors, pharmacists, pharmacy owners or wholesalers reaches them through medical representatives, who provide information about medicines and their principles of action during meetings. Medical representatives at such meetings often hand out small gifts, leaflets and advertising gadgets.

Expenses for the purchase of advertising gadgets worth less than PLN 100 that bear the logo of a medicinal product given to doctors, pharmacists, pharmacy owners or wholesalers constitute advertising of the medicinal product and may be included in deductible expenses. Typically, such expenses include pens, calendars, aprons, etc. It is prohibited to give gifts with a value of more than PLN 100. If such gifts are given, such expenses will be excluded from tax deductible expenses. The same applies to gifts or souvenirs that do not contain the logo of a medical product, such as medical books, medical atlases, fountain pens, etc. It does not matter whether the value of these gifts is less or more than PLN 100. Such giving does not constitute advertising of a medicinal product. Placing a medicinal product logo on a gift makes it an advertisement for a medicinal product.

Provision of samples of medicinal products

Expenses related to the supply of samples of medicinal products will be allowed to be included in deductible expenses in full, provided that the supply of samples complies with the provisions of Article 54 of the Pharmaceutical Law.

Promotional meetings

Medical product advertising involving sponsorship of promotional meetings can take many forms. Typically, such meetings are held for doctors and pharmacists and consist of presentations of the company's products. During such meetings, it is not uncommon for scientific lectures to take place between product presentations, where, for example, the principles of patient treatment are discussed. Such meetings usually take place in restaurants, hotels or conference centers. In principle, all expenses related to the organization of a promotional meeting, such as room rental and invitations, for example, will be deductible. The question arises whether, in light of the newly applicable tax regulations, catering and lodging expenses will be able to be included in deductible expenses in full. According to the position of the Tax Chamber in Warsaw, dated 23.07.2007. No. 1401/BP-II/4210-43/07/JM, expenditures for lodging, meals and travel to a promotional meeting do not have the character of expenses for representation and, as costs incurred to advertise the company's products, may be included in tax deductible expenses. In addition, in accordance with Article 86 of Directive 2001/83/EC of 06/11/2001, sponsorship for doctors of travel, lodging expenses is also considered advertising of a medicinal product.

Important main purpose of the meeting

Restrictions on the inclusion of expenses as tax deductible costs arise only from the provisions of the Pharmaceutical Law and, first and foremost, from Article 58, according to which it is forbidden to advertise a medicinal product to persons authorized to issue prescriptions and persons trading in medicinal products by organizing and financing promotional meetings of medicinal products, during which expressions of hospitality go beyond the main purpose of the meeting. The tax regulations do not define the term "manifestations of hospitality," but as the above Directive implies, hospitality should be of reasonable size and importance secondary to the main purpose of the meeting.

Sponsorship of conferences, conventions and scientific congresses

Pharmaceutical companies usually sponsor congresses, conventions and scientific conferences by paying a certain amount of money to the organizer of such a meeting. Such payments usually cover the costs of accommodation, refreshments, and lecturers' salaries. Any expenses associated with sponsoring congresses will be deductible in full with the sponsor. In practice, there are doubts as to whether organizing congresses, conferences or workshops for doctors and pharmacists is advertising a medicinal product since the provisions of the Pharmaceutical Law speak of "sponsoring" and not "organizing" such meetings.

Booth rental

Another form of presence of pharmaceutical companies at conferences, conventions and scientific congresses aimed at doctors or pharmacists is the rental of space or a stand where products are presented. Undoubtedly, expenses related to the organization of such a booth (equipment, flyers, advertising gadgets, furnishings, etc.) will be included in deductible expenses in full.

Funding the course

It often happens that pharmaceutical companies cover doctors or pharmacists for convention fees at congresses or conferences. The value of the covered convention fees exceeds PLN 100. Covering convention fees or offering free participation in a congress can be considered a prohibited act under the Pharmaceutical Law as giving material benefits. This is because the company covering the convention fees does not receive any benefit, only the doctor or pharmacist improves their qualifications. In order to include convention fees as an expense, the company must demonstrate a connection with the revenue it receives. Until December 31, 2006, convention fees paid to named physicians or pharmacists were treated as non-public advertising expenses. As of January 1, 2007, due to a change in tax regulations on advertising expenses, it is irrelevant whether convention fees are paid for the participation of named individuals or whether invitations to attend are addressed to medical facilities that name individuals attending such conventions.

Another type of expense incurred by pharmaceutical companies is the payment of salaries for giving a lecture. In this case, it is not possible to speak of a prohibited act according to the Pharmaceutical Law of giving material benefits, since usually such remuneration is paid on the basis of civil law contracts. The problem with the inclusion of remuneration in the costs of the company may arise when the lecture does not in any way contain elements advertising the medicinal product. In order for such expenses to be recognized as costs, the company will have to demonstrate a connection with the company's income.

The basic types of marketing expenses incurred by pharmaceutical companies and the problems that arise when including such expenses as deductible expenses have been outlined above. However, due to the ingenuity of companies in advertising their products, the catalog of expenses is not exhaustive.