Several years ago, I was talking to a Canadian pharmacist about drug costs. What we found was that Americans pay twice as much for the same medications. I couldn’t believe what I was hearing, especially since the funding for the FDA and the NIH comes from US taxpayers.
You would think that Americans deserve a break since they financed the research and development of these so-called lifesaving drugs. So how is it possible that Big Pharma claims such a low profit of 5% in the US but 50 % overseas?
These are American companies, selling to American people and claiming their revenue elsewhere where the tax burden is the lowest.
Eight big pharma players—AbbVie, Amgen, Bristol Myers Squibb, Eli Lilly, Gilead, Johnson & Johnson, Merck, and Pfizer—paid just above 2% in US taxes on a combined $110B in profits for 2022. $2B in corporate taxes is just a drop in the bucket compared to the NIH’s $47B budget paid by you.
As if that wasn’t enough, here’s the kicker. The intellectual property, the patent, and manufacturing are all of which are held offshore. They operate in countries with the best tax-saving incentives like Singapore, Switzerland, Belgium, and in the case of AbbVie, Puerto Rico.
Imagine that some of these companies even claim losses in US sales. For example, AbbVie, the company that makes Humira charges over $7200 a month to treat arthritis and Crohn’s disease (both preventable conditions with the proper lifestyle) has reported a $5B loss in the US but $18B in profit overseas.
Keytruda is a $175k/year chemotherapy drug that rakes in $37B in US sales for Merck. Yet all these profits were claimed overseas. How much more bleeding do you think our country can handle?
Pharmaceutical and healthcare industries spend more on lobbying than any other industry. This certainly paid off when Congress recently allowed a 40% tax break. In comparison, this is typically half of what most US corporations pay.
To them, corporate profits are more important than your life. Stop trusting them with your most precious asset, your health. Educate before you medicate.
References
Merelli, A. (2023, May 17). Guess how much big pharma paid in US taxes on $110 billion of profit in 2022. Retrieved from Quartz: https://qz.com/guess-how-much-big-pharma-paid-in-us-taxes-on-110-bill-1850441135
Setser, B., & Turner, T. (2023, Aug 3). Big Pharma's big tax dodge. Retrieved from Business Insider: https://www.businessinsider.com/big-pharma-companies-taxes-american-billion-dollar-profits-drugs-healthcare-2023-8
Wyden Hearing Statement on Big Pharma’s Tax Avoidance Schemes. (2023, May 11). Retrieved from United States Senate Committee on Finance: https://www.finance.senate.gov/chairmans-news/wyden-hearing-statement-on-big-pharmas-tax-avoidance-schemes
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