RICHMOND, Va. — In case you missed it, Business Insider published a piece by the Council on Foreign Relations’ Brad Setser and Tess Turner detailing how Big Pharma is legally shifting their profits overseas to avoid tax liability in the United States.
Many companies, unsurprisingly, found ways to move profits to no-tax jurisdictions in the Caribbean and Europe. The most common way to do this was by parking their intellectual property — such as the patents that give them a legal monopoly to sell a drug they’ve developed — in no- or low-tax jurisdictions. Add in overseas manufacturing, and almost all profits earned on US sales were shifted to the low-tax jurisdictions.
The Insider piece coincides with staggering revenue reports from America’s biggest pharmaceutical companies. Just last week, Pfizer announced it took in $12.7 billion this quarter and Merck announced it raked in $15 billion.
“This new reporting affirms what we already knew: the system is stacked against hardworking people who are struggling to afford their medicines,” said Freedom Virginia’s executive director Rhena Hicks. “Big pharma is raking in profits while avoiding taxes, while Republicans in the House of Delegates killed bipartisan legislation to create an independent Prescription Drug Affordability Board to cap what consumers would pay for certain medicines, some of which cost four times as much as they do in other countries. Virginians can’t wait any longer. We need the General Assembly to take meaningful action to lower drug prices now.”