Tuesday, February 26, 2019

The Trump Tax Cut and Big Pharma

CEOs of 7 pharmaceutical multinationals addressed the Senate Finance Committee:
Pharma execs offer Senate ideas to lower drug costs – except actually cutting prices. Executives from seven pharmaceutical companies — AbbVie, AstraZeneca, Bristol-Myers Squibb, Johnson & Johnson, Merck, Pfizer and Sanofi — are testifying before the Senate Finance Committee. The pharma executives have a number of ideas to reduce drug prices for patients, except lowering list prices. High drug prices has become a rare bipartisan issue, with lawmakers on both sides of the aisle demanding change.
One of these questions posed to the CEO of Abbvie was how much of the benefit from the 2017 tax cut did his company pass onto consumers. I guess the Senator was expecting an honest answer being “none”. But the actual answer came out that AbbVie did not get much benefit from this reduction of corporate profit tax rates. How could that be? Well – look at its past 10-K filings and you will see that AbbVie has sourced little to none of its massive profits to the U.S. parent. Why would you benefit from a tax rate cut when one is engaged in massive transfer pricing manipulation?!

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