I would deduct both the prescription drug costs and the cost of the sperm. IUI definitely "affects a structure or function of the body" (think of the uterus). Since pregnancy cannot occur without sperm, the sperm is a medically necessary expense for the procedure. The only caveat is that you can't deduct drugs from other countries (such as drugs you might buy in Canada), unless the FDA has approved them for import to individuals.
Remember that medical expenses are deductible only to the extent that they exceed the 7.5% of AGI threshold.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
