OPINION:
Americans who earn well may have to pay as much as 37% of income in taxes each year. But not so the pharmaceutical companies.
For 2022, eight Big Pharma companies, including Merck, Pfizer and Johnson & Johnson, scooped up a combined $110 billion in profits, but they only paid a combined $2 billion in U.S. taxes. That’s about 2%.
Big Pharma gets by with it because a) it’s legal and b) executives for these countries simply shift their profits that are based on U.S. sales to countries with lower taxes. America may be paying the highest for medicines and drugs of all the nations of the world, but we’re not seeing any sort of happy return via tax revenues from these purchases.
Normally, this wouldn’t be a bitter pill to swallow.
Big Pharma, after all, like Big Business, is free to enjoy the free market fruits of a free market economy, including the legal exploitation of tax laws.
But the coronavirus put a big ol’ dent in the free market. And whenever tax dollars are used to foot private industry bills, it opens the door for taxpayers to demand fair shares.
Here’s a glimpse of what transpired during COVID years. Congress appropriated almost $10 billion of taxpayer funds for the development and manufacturing of COVID-19 diagnostics, protective gear and treatments, to include shots.
“Pfizer said it didn’t take any money to develop the vaccine, but its partner, BioNtech, received $446 million from the German government,” The Durango Herald wrote in August 2021.
Pfizer, however, was paid $2 billion from America — from American taxpayers — for purchases of the manufactured COVID shots.
Then there’s Moderna.
Even though Moderna was just an upstart with absolutely no record of producing a drug that was approved for use by U.S. authorities, the company secured about $1 billion in research money for COVID drugs, with a promise for another $1.52 billion to deliver doses in a timely manner.
Then there’s Johnson & Johnson.
“Johnson & Johnson secured more than $1 billion in additional funding for its COVID-19 vaccine research through an expansion of its partnership with the Biomedical Advanced Research and Development Authority (BARDA), a division of the U.S. Department of Health and Human Services,” BioSpace wrote in November 2020.
Cha-ching.
Profits started rolling; money started piling; revenues started reaching record levels for Big Pharma.
In February of this year, Somo, the Center for Research on Multinational Corporations, reported, “Pfizer, BioNTech, Moderna and Sinovac made an extraordinary USD 90 billion in profits on their COVID-19 vaccines and medicines in 2021 and 2022 … largely due to decades of research funded by public investment, billions in grants for development and production and tens of billions in Advanced Purchase Agreements with governments.”
Tax dollars fed Big Pharma to find speedy treatments for COVID.
Tax dollars fed Big Pharma in the purchase of these COVID treatments.
As a matter of fact, tax dollars continually fund Big Pharma, making a major mocking of the concept of capitalism and the free market.
“US Tax Dollars Funded Every New Pharmaceutical in the Last Decade,” the Institute for New Economic Thinking wrote in September 2020. Included in the article — this: “[T]he billions of dollars of public funding demanded by the private sector to pursue these [pharmaceutical] products vividly illustrates the industry’s reliance on public funding for the development of products that address the public’s most pressing needs.”
Yes, Americans typically get a break in the pricing of drugs that make it to market — at least initially.
But after a certain time span, Big Pharma execs can charge whatever they wish. Americans subsidize the rest of the world’s medicinal needs.
Kaiser Family Foundation, for instance, wrote this past March that while “the federal government has spent more than $30 billion on COVID-19 vaccines, including the new bivalent boosters, incentivizing their development, guaranteeing a market and ensuring that these vaccines would be provided free of charge to the U.S. population,” the pathway forward would be that Big Pharma manufacturers would negotiate prices for these treatments directly with insurance companies and other purchasers.
Expect costs to rocket. Rather than charging in the range of $20 per dose of COVID shot — roughly what U.S. taxpayers paid — Pfizer and Moderna will more than likely charge three or four times that amount. And remember: The government via health bureaucratic mouth is still advising Americans to get the shot, get the booster, get a yearly COVID shot, just like a flu shot.
The political-pharmaceutical incestuous relationship continues.
The demise of a free market continues.
And that segues back to the taxes paid by Big Pharma.
“[T]ake a look at the corporate disclosures of America’s largest pharmaceutical companies,” Business Insider just wrote. “Of their $100 billion combined profit, the companies said $90 billion was made abroad while a paltry $10 billion came from their US operations. That comes out to a profit margin of 5% in the US and a margin of over 50% abroad. What’s going on?”
What’s going on is this, Business Insider later wrote: “Most of America’s major pharmaceutical companies have simply perfected the art of legally shifting the profit on their US sales out of the country to low-tax jurisdictions.”
Free market-minded Americans probably wouldn’t care so much about Big Pharma’s profits — except Big Pharma seems to be oh so accepting of using tax dollars and public services when it benefits them and simultaneously, oh so in love with the free market that truly benefits them. You can’t take from the taxpayer and then cry “free market” when it comes time to pay taxes. You can’t have it both ways.
Either it’s free market, or it’s not.
And when it comes to Big Pharma, it definitely is not.
• Cheryl Chumley can be reached at cchumley@washingtontimes.com or on Twitter, @ckchumley. Listen to her podcast “Bold and Blunt” by clicking HERE. And never miss her column; subscribe to her newsletter and podcast by clicking HERE. Her latest book, “Lockdown: The Socialist Plan To Take Away Your Freedom,” is available by clicking HERE or clicking HERE or CLICKING HERE.
For more information, visit The Washington Times COVID-19 resource page.
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