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Despite billions in Trump-GOP tax cuts, Pfizer still jacks its prices.

WASHINGTON, D.C. – When pharmaceutical giant Pfizer hiked the prices of more than 40 of its prescription drugs last July, the company faced withering criticism, including from President Trump, causing the company to back down and defer the price hike until Trump’s vague promises of curbing drug prices were put into action.

Now, just four months later, Pfizer announced today it will return to business as usual by hiking the prices on 41 of its prescription drugs. If the plan is the same as was announced last July this means prices of Lipitor, Celebrex, Neurontin, Zoloft and other top-selling drugs will be going up come January.

While not unexpected, Pfizer’s move will make medications more unaffordable for millions of patients despite having received an estimated $25.5 billion tax cut on its nearly $200 billion in untaxed profits held offshore and a $1 billion tax cut on 2018 profits from the Trump-GOP tax law.

“The cost of prescription drugs only goes one way – up – despite near universal criticism from lawmakers and hefty tax breaks for the pharmaceutical industry,” said Frank Clemente, executive director of Americans for Tax Fairness. “Pfizer could have used its huge windfall from the Trump-GOP tax cuts to lower prices or increase the pay for its workers. Instead, it’s padding the pockets of its CEO and wealthy shareholders, and continuing to price-gouge its customers.”

Even without today’s announcement, the cost of many of Pfizer’s drugs has soared the last two years. The prices of Pfizer’s top-selling drugs, including Lipitor, Celebrex, Neurontin and Zoloft, have been raised by about 30% on average since before Trump took office, according to data from Pharmacy Benefits Consultants. The latest increases announced Friday are the fourth round of price hikes since the start of 2017, beginning with increases in January and June of last year that raised the prices for many of its drugs by an average of 20% for the year. In January 2018, Pfizer further upped the prices for 116 of its drugs by up to 9.5%.

Source: Pharmacy Benefit Consultants, March 2018

Meanwhile….

• Due to the Trump-GOP tax cut law, Pfizer is projected to get a $25.5 billion tax cut on its $199 billion in accumulated offshore profits on which it has not paid any U.S. taxes, according to an analysis by the Institute on Taxation and Economic Policy and Americans for Tax Fairness. [Table 2] The new tax law requires corporations to pay a one-time tax on their accumulated offshore earnings—whether they bring them home—at a steeply discounted rate of just 15.5% on cash and a mere 8% on non-cash assets. It is estimated Pfizer owed $40.7 billion on those profits at the U.S. corporate tax rate of 35% less foreign taxes paid.
• Pfizer is estimated to be getting more than $1 billion in tax cuts this year as a result of the Trump-GOP tax cut law, according to Senate Finance Committee Democrats. [Table 1]
• Days before the final passage of the Trump Tax Cuts, Pfizer’s board approved a $10 billion increase to its stock buyback program. In the 1^st quarter of this year, Pfizer has already spent $6.1 billion on stock buybacks. Stock buybacks mostly enrich the already wealthy, including CEOs, because rich people own most corporate stock: the wealthiest 10% of American householdsown 84% of all shares, the top 1% own 40%.
• Pfizer’s CEO got a 61% pay increase in 2017, bringing his total compensation to $27.9 million.

While many drug companies have pledged to only raise prices once a year since public attention was drawn to exorbitant drug price increases, Pfizer has continued to hike prices twice a year.

Contact:

Dennis Bailey
Director of Communications
Americans for Tax Fairness
202-733-3444