Washington, DC – On Tax Day, millions of Americans contend with higher health care premiums and skyrocketing costs of prescription drugs, while insurance companies reap the benefits of billion-dollar tax breaks, all thanks to the GOP’s tax bill.
Wealthy health insurers and rich pharmaceutical companies have gotten a massive tax windfall thanks to the Trump tax bill, while those same companies continue to charge higher costs for every day prescription drugs relied on by millions of Americans.
To make matters worse, the Trump administration continues to wage their war on America’s health care, and Trump’s lawsuit in Texas threatens to dismantle the nation’s health care system end protections for pre-existing conditions. Trump’s tax bill alone could strip coverage from 13 million Americans and raise premiums double-digits each year while continuing to fund trillion-dollar tax breaks for the wealthiest individuals and corporations.
Protect Our Care executive director Brad Woodhouse released the following statement on Tax Day:
“As drug companies enjoy billion dollar tax breaks this tax day, millions of Americans are being forced to pay more out of pocket for their prescriptions as the Trump administration continues its war America’s health care. To add insult to injury, the drug companies receiving massive tax breaks are charging more for prescription drugs while Trump’s tax bill puts more than 13 million Americans at risk of losing coverage.”
Thanks to the Republican tax bill, big pharma and insurance companies are raking in huge profits…
Pharmaceutical Companies Have Reaped Huge Benefits From The Trump Tax Bill. The Trump tax scam means billions of dollars in tax breaks for pharmaceutical companies. An Axios study found that 21 health care companies collectively expect to gain $10 billion in tax savings during 2018 alone. Most of the tax break windfall for health care companies is going toward share buybacks, dividends, acquisitions and paying down debt. According to Axios, nine pharmaceutical companies are spending a combined $50 billion on new share buyback programs. All of the buybacks were announced during or after passage of the tax bill. Some drug companies are also increasing dividends for shareholders, with AbbVie increasing its cash dividend by 35 percent while also announcing a new $10 billion share repurchase program.
The GOP Tax Law Let Pharma Keep $7 Billion In Tax Savings. As Axios reports, “Johnson & Johnson, Pfizer, Merck and Abbott Laboratories collectively kept $7 billion in tax savings last year due to lower corporate tax rates and bringing home cash that was parked overseas, according to a new report from anti-poverty charity Oxfam. Why it matters: The Republican tax law made it possible for the largest pharmaceutical companies to retain money that otherwise would have gone to public coffers, Axios’ Bob Herman reports. But as Oxfam notes, there has not been a corresponding increase in drug development or lower drug prices.”
Pharmaceutical Companies Are Pursuing Massive Profits And Price Increases. Pharmaceutical companies raked in more than $30 billion in profits in the third quarter of 2018, with Pfizer alone bringing in $4.1 billion — the highest of any publicly traded health care company. Of the 19 companies that tallied at least $1 billion of third-quarter profit, 14 were drug companies. Meanwhile, pharmaceutical companies continue to increase prices. In January 2019 alone, Pfizer and Novartis announced price increases on dozens of drugs, including increasing the cost of a breast cancer medication to $12,000 for 21 pills. All in all, nearly 30 drugmakers are expected to raise prices in 2019.
…while Americans pay even more for prescription drugs and access to care.
Drug Prices Continue to Soar Under Trump. A report by Senate Democrats finds that the prices of the 20 most-prescribed drugs under Medicare Part D have increased substantially over the past five years, rising 10 times faster than inflation. Another report from the Pharmacy Benefits Consultants finds that over the past 14 months, 20 prescription drugs saw list-price increases of more than 200 percent.
Drug companies are engaging in the dangerous practice of price-gouging — pursuing massive profits to the detriment of people who need their medication to survive. In September 2018, Nostrum chief executive Nirmal Mulye defended his choice to raise the price of an antibiotic from $474.75 to $2,392 a bottle, saying he had “moral requirement…to sell the product for the highest price.” In 2017, Mylan, the company that made the EpiPen, came under fire for charging $609 for a box of two devices even though each only contained about $1 worth of the drug epinephrine. Between 2012 and 2016, the price of insulin, which 7.5 million Americans depend on, nearly doubledfrom $344 to $666.
Not only do health care costs top the list of Americans’ worries, but millions forgo care they need due to costs. According to a West Help and Gallup survey, in the past twelve months, Americans borrowed an estimated $88 billion to pay for health care, 65 million adults had a health issue but did not seek treatment, and 15 million Americans have deferred purchasing prescription drugs due to cost. Fifty-five percent of Americans worry a great deal about the availability and affordability of health care, and 45 percent of Americans are concerned a major health event will leave them bankrupt.