Bloomberg: Pharmaceutical Companies Avoiding Taxes Get Scrutiny From House
- Democrats look at how 2017 tax bill affects drug companies
- Republicans push caps on out-pocket costs for seniors
The leading tax-writing body in the House is investigating pharmaceutical tax write-offs, including charitable donations, the financial benefits of certain drug approval pathways, and how the 2017 tax law affected drug prices.
Pharmaceutical companies are abusing the U.S. tax system by making “taxable income disappear overseas,” Rep. Lloyd Doggett (D-Texas), chairman of the House Ways and Means health subcommittee, said at a hearing Wednesday. Doggett is investigating how companies “avoid taxes” and use patient assistance programs to “steer patients to high cost drugs and make insurers pay the price,” driving up deductibles and premiums, he said.
Congress has debated for years how to lower health-care costs for Americans but to no avail.
President Donald Trump urged lawmakers in Tuesday’s State of the Union to bring him a bill that would ease financial burdens for patients.
Doggett also is looking into how the tax cuts Republicans spearheaded in 2017 are affecting drug prices. The law included a permanent reduction in the corporate tax rate.
One economics specialist told lawmakers Wednesday that stock buy-backs increased dramatically after the bill passed while growth of research and development stayed the same. Brad Setser, the international economics fellow at the Council on Foreign Relations, also disputed Trump’s assertion at Tuesday night’s State of the Union that drug prices have gone down.
Price increases have slowed over the past 12 months, he said, but prices have risen in the past 24 months. Republicans like Rep. Devin Nunes (R-Calif.), the ranking member of the subcommittee, pushed for passing bipartisan drug proposals like capping out-pocket costs for seniors.