A new report by Americans for Tax Fairness, a coalition of 425 national and state organizations representing tens of millions of people, reveals that the Republican tax cuts will increase pharmaceutical corporation revenues, but they will not drive down drug prices or increase their employee salaries. They will benefit Pharma shareholders and the highest level executives. They are a bust for Americans.
The report shows that five of the ten biggest pharmaceutical corporations are benefiting from the tax cuts to the tune of around $6.3 billion this year alone. As of now, not a single one of these companies say that the money will go to research and development, more jobs, lower drug prices, or higher wages.
Two pharmaceutical companies are sharing less than three percent of their $6 billion savings with their workers, dispensing $169 million in bonuses. As it is, they already avoid paying taxes on their profits, by depositing them in tax havens outside of the US.
Many of the biggest pharmaceutical companies have announced a total of $45 billion in share buybacks since late 2017. Share buybacks are simply a way to raise the stock price and, with that, executive incomes and incomes of shareholders.
Looking back over the five years spanning 2011 to 2015, Americans for Tax Fairness projects that the biggest drug corporations increased the prices on their top-selling drugs by about 71 percent. Inflation was 5 percent during that timeframe. And, AARP reports that between 2013 and 2015, the price of 268 brand drugs increased by 15 percent or more a year. Profits for the top ten pharmaceutical corporations increased by nearly 40 percent between 2011 and 2015.
The recent tax cuts also dramatically reduce the amount the drug corporations owe on their untaxed $500 billion in offshore profits. It cuts those taxes by almost 60 percent, down $76 billion to $58 billion from $134 billion. Pfizer saved a whopping $25 billion dollars in taxes on its offshore profits, which are now down to $15 billion from $40 billion.
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