The Treasury Department just grew some cojones and clamped down on companies who want to move their “headquarters” to other countries. This was sparked by a deal that the drug company Pfizer had made to move their company to Ireland to avoid paying taxes here. The outcry from the public was so great that the Obama administration took notice and acted.
The outrage over large corporations moving so much of their business — and tax money — to other countries, while continuing to milk Americans for profits, has finally reached a tipping point. We hope. In this case, it did and that’s a helluva start.
Pfizer, the makers of Viagra (insert your own joke here), announced their plan to move their company’s “address” to Ireland as they raised the prices on their products here at home. The price of some 100 drugs went up by as much as 20 percent. The outcry in response caused the Treasury Department to close a loophole that allowed what is called “corporate inversion.” These “inversions” allowed companies to move their working address to a country with a lower tax rate to avoid paying taxes here.
William Greider, in his article for The Nation magazine, noted that Americans rightly saw such tactics as unpatriotic and a “betrayal of America.”
Having milked staggering wealth from US consumers through its inflated drug prices, Pfizer expected to have it both ways. Like other major multinationals, it planned to continue to enjoy all the benefits of being American—the government subsides and research grants and meek law enforcement—but would establish its HQ in Dublin, where tax rates are pitifully lower.
He also points out that this sort of scheme is subsidizing the healthcare systems of countries like Canada and France by allowing companies like Pfizer to charge outrageous drug prices here in America. We pay more so that Big Pharma can make deals in other countries and we take up the slack. Why? Because those other countries allow their governments to regulate drug prices, something our Congress is too weak (or corrupt) to do.
Meanwhile, Americans go without the medicines they need. Drug costs are so high that some of us take only the drugs we “really, really need.” One patient of a D.C. cardiologist Greider interviewed for his piece said that a patient told him that, even though a heart medication helped, the patient couldn’t afford the extra $350 a month.
Speaking for myself, I have found only one drug that helps my rare vascular and nervous condition. The Lyrica I need to help control flare-ups costs me about the same; $350 a month. Without it, I can’t function. I’m sure there are many reading this who are in the same situation. Having to choose between our drugs and other necessities is just wrong and the American government should act to change it. This is a good start.
Greedy pharmaceutical companies who want only to maximize shareholder profits and avoid paying their taxes are killing Americans and choking our healthcare system. The Obama Treasury Department just threw a wrench into one way they do that. Let’s hope that brings more action to curb obscene profits on the backs of sick and ailing Americans.
Featured Image by Spencer Platt/Getty Images