Committee Report Shows How Brand Name Drug Company Further Juiced Profits on Blockbuster Drug Already Known as a Case Study for Big Pharma’s Greed
In case you missed it, on Thursday the U.S. Senate Committee on Finance released an interim report examining strategies employed by Big Pharma company AbbVie to avoid paying taxes on profits generated in the U.S. on blockbuster rheumatoid arthritis drug Humira.
As the report details, “over 75 percent of AbbVie’s sales were made to American consumers yet only one percent of AbbVie’s income was reported in the United States for tax purposes.” Since 2017, AbbVie has been able to “exploit subsidiaries in offshore tax havens to avoid paying billions of dollars in taxes on U.S. prescription drug sales.” As the Wall Street Journal reports, this enabled the Big Pharma giant to “sometimes post single-digit tax rates,” while the effective tax rate for sales generated by a company like AbbVie in the U.S. would be 21 percent. The effective tax rates paid by AbbVie for these years are in fact “less than half…the marginal tax rate of 22 percent paid by an American family with a combined income of $84,000.”
The report focuses on AbbVie’s blockbuster rheumatoid arthritis drug Humira, a perennial example of some of the pharmaceutical industry’s worst behavior. The report points out that AbbVie has increased the price of Humira 27 times since bringing the drug to market, hiking the drug’s price 470 percent from what it originally cost, and now charging just over $75,000 for a year’s supply. AbbVie’s egregious pricing of Humira has been enabled by the company’s anti-competitive tactics blocking competition in the U.S. AbbVie holds 130 patents on Humira, blocking competition for up to 39 years.
Read the full report from the U.S. Senate Committee on Finance HERE.
Read about how Humira is a case study in Big Pharma greed HERE.
Read about how AbbVie’s CEO bragged about the company’s ability to hike prices in the U.S. HERE.
Read about how Big Pharma used a windfall from the Tax Cuts and Jobs Act of 2017 to line shareholders’ pockets, rather than invest in research and development (R&D) HERE.
Learn more about solutions to hold Big Pharma accountable and lower prescription drug prices HERE.