Big Pharma Companies Happy To Use The US Government To Push Industry Agenda, Not So Happy To Pay US Taxes

Politics

from the hardly-fair dept

Fri, Jun 13th 2014 3:36am — Glyn Moody

Big pharma companies exert considerable influence on US trade policy. Research by the Sunlight Foundation shows that the pharmaceutical industry has been lobbying for the measures it wants in TPP longer and more consistently than any other sector. For example, one of the most important -- and contentious -- chapters of TPP is about keeping drug prices artificially high. Big pharma has also been vocal in calling for the European Union to be put on the Special 301 Report's "Priority Watch List" for daring to require that basic safety data about drugs be made available. Given this wide-ranging support from the US government, you'd think that pharmaceutical companies would be only happy to pay back in the form of taxes, say, but as Quartz points out, that's far from the case:

Pfizer's bid to purchase AstraZeneca failed, but the company's attempt to move to London in an effort to avoid US corporate taxes has inspired a new round of commentary on America's corporate tax system. Perhaps it should also spur a look at America's commitment to raising drug prices around the world.

The US taxes the global income of its companies, which has lead many of the largest to keep profits overseas indefinitely to avoid paying Uncle Sam, and even shift US profits overseas to avoid public levies. So-called “inversions” -- reverse mergers where a US company buys a foreign one and assumes their jurisdiction, as Pfizer proposed -- have also become more popular. Four US pharmaceutical companies have used the tactic to go overseas in the last year, and four more are considering similar moves.

It's probably too much to hope that the US government will abandon its unquestioning support for the pharmaceutical industry, but if more drug companies do relocate overseas to avoid paying US taxes, the public outcry against it doing so may grow.

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Filed Under: drugs, pharma, pharmaceuticals, taxes, tpp, trade, ttip

17 Comments

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That One Guy (profile), 13 Jun 2014 @ 2:25am

Pharmaceutical companies do everything they can to avoid paying taxes, all the while dictating and directing trade and foreign policy to their benefit...

The 'entertainment industry' contributes very little to the economy compared to numerous other industries, yet likewise have enormous, disproportionate political clout and power...

Why, it's almost as though the government's been bought out by whoever throws the most money at them, but I'm sure that's not it... /s
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- Anonymous Coward, 13 Jun 2014 @ 3:53am
  
  Re:
  It may be whosoever has the Blade of Ambition +20 gets the most laws ruled in their favor. But that's unlikely.
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- Anonymous Coward, 13 Jun 2014 @ 5:23am
  
  Re:
  How do you propose to get all of these Americans off of the Entertainment and Drug cock?
  
  Americans Worship their "Actors" and they love their "Drugs".
  
  A lot of people die from prescription drugs, not just illegal ones.
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Anonymous Coward, 13 Jun 2014 @ 4:36am

Just say no to drugs
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Capt ICE Enforcer, 13 Jun 2014 @ 4:47am

Big Pharma
Big Pharma = Free Blue Pills.
What politician wouldn't sign up.
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- Ruben, 13 Jun 2014 @ 11:03am
  
  Re: Big Pharma
  Congress is still impotent.
  
  It didn't work.
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Jay (profile), 13 Jun 2014 @ 5:00am

Read between the lines
So Hollywood has abandoned the US and Big Pharma is doing the same thing...

They're going where the markets are. The markets aren't in the US anymore and the government is allowing that.

So avoid American taxes, avoid American commerce, and make money for everywhere else.

This is a great system of democracy isn't it...? /s
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- Anonymous Coward, 13 Jun 2014 @ 5:08am
  
  Re: Read between the lines
  Yeah, there is no market in the us ... film at eleven.
  In other news, only lazy people are poor.
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Anonymous Coward, 13 Jun 2014 @ 5:02am

Big pharma has also been vocal in calling for the European Union to be put on the Special 301 Report's "Priority Watch List" for daring to require that basic safety data about drugs be made available.

Anybody would think they want an opportunity to sell drugs that show no immediate problems in them hope that they can recoup most of the development costs before doctors discover what they already know to be a problem with the drug.
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- Anonymous Coward, 13 Jun 2014 @ 5:09am
  
  Re:
  But .. but man boobs are sooo cool.
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Anonymous Coward, 13 Jun 2014 @ 5:38am

Big Pharma = Free Blue Pills.
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Anonymous Coward, 13 Jun 2014 @ 7:35am

The majority of money in politicians' paychecks don't come from tax dollars. It comes from campaign contributions from corporations such as Pfizer.

That's why we're living in a Plutocracy. The Plutocrats will continue to sell this country down river, and everyone in it, as long as their campaign coffers remain full.
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Josh (profile), 13 Jun 2014 @ 7:50am

GE
Other companys do the same thing. Last I heard, GE hasn't paid net taxes in several years. I assume it's the same for Ford, Chevy, Kellogg, Basically anything with a big name attached.
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- John Fenderson (profile), 13 Jun 2014 @ 8:43am
  
  Re: GE
  Yeah, it's pretty common. It's part of one of the most perverse larger aspects of our economic system: the wealthier you are the less expensive everything is.
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Lord Binky, 13 Jun 2014 @ 8:49am

That's fine.
Get rid of the Corporate taxes and just put a variable excise tax on all pharmaceuticals based on the Gross Profit of the item. Simply, Big profit = Big Taxes, payed up front, no tricks.
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Anonymous Coward, 13 Jun 2014 @ 9:39am

is this any different to other industries (like the telecoms, for eg?) and even individuals? of course not. as long as they are fleecing someone and paying no tax, they're happy!
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Koby, 13 Jun 2014 @ 10:11am

taxes
It' s wrong to say that the companies are relocating their headquarters to avoid paying US taxes. They will still have to pay US taxes for profits in the US. The reason for the switch is to avoid double taxation for profits outside of the US on which taxes were already paid and now the US govenment wants them to pay again.
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