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Two Democratic lawmakers on Tuesday pressed 5 of the country’s greatest pharmaceutical corporations about their low tax expenses and whether or not they give a boost to extending large tax cuts for the trade within the GOP reconciliation invoice.
Sen. Elizabeth Warren, D-Mass., and Rep. Jan Schakowsky, D-Ill., accuse Pfizer, Merck, Johnson & Johnson, AbbVie and Amgen of paying little to no federal taxes for benefit earned in 2024 and years prior, in spite of producing tens of billions of greenbacks every year from their medication.
In separate letters to each and every corporate on Tuesday, the lawmakers allege that the pharmaceutical corporations all have shyed away from paying U.S. tax expenses by way of transferring their earnings to offshore subsidiaries in jurisdictions with a lot decrease tax charges, similar to Ireland and Bermuda. That apply was once enabled by way of a provision in President Donald Trump‘s 2017 Tax Cuts and Jobs Act, which aimed to curb company tax avoidance however as a substitute created new incentives for U.S. multinational corporations to transport earnings and operations in another country.
In the letters, Warren and Schakowsky stated the apply illustrates “just one of the ways in which our tax code has been skewed to benefit wealthy pharmaceutical corporations, enabling them to profit off Americans, charging them the highest drug prices in the world, without paying their fair share of taxes.”
They pressed drugmakers about whether or not the 1000’s of greenbacks they’ve spent lobbying Congress went towards efforts to deal with that tax loophole in Trump’s “One Big Beautiful Bill Act,” which the Republican-led House handed in overdue May. J&J, as an example, spent greater than $150,000 lobbying on world tax problems within the fourth quarter of 2024 on my own, in keeping with the letter to the corporate, which cites information compiled by way of OpenSecrets.
If enacted as recently written, the multitrillion-dollar tax and spending package deal would make many provisions in Trump’s 2017 tax act everlasting. The present iteration additionally accommodates historical spending cuts to systems for low-income Americans, together with Medicaid well being protection.
The invoice now sits within the Senate, the place Republicans may just make a selection to drop or revise most of the provisions driven by way of hard-line House Republicans who sought to slash spending in tandem with the tax cuts. But any Democratic push to get rid of the offshore tax loophole could be an uphill fight, as Republicans cling a majority within the higher chamber.
Even so, Democrats have attempted to construct public opposition to portions of the law because the GOP makes an attempt to stability competing birthday party pursuits to go it. Both events have focused pharmaceutical corporations for years.
“It’d be a slap in the face for Congress to expand tax loopholes for Big Pharma companies that are making billions in profit while overcharging Americans,” Warren stated in a observation to CNBC. “These companies need to be held accountable for prioritizing their profits over people.
Sen. Elizabeth Warren, D-Mass., conducts a news conference in the U.S. Capitol to voice opposition to the Senate Republicans’ budget resolution on April 3, 2025.
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The letters to drugmakers cited a March analysis by the Council on Foreign Relations – an independent, nonpartisan think tank – suggesting that reforming the offshore tax loophole would raise at least $100 billion over 10 years.
The letters also include questions about each company’s role in lobbying for an extension of the tax breaks and their estimated federal tax liabilities. The lawmakers asked each drugmaker to respond by July 1.
Spokespeople for Pfizer, Merck, J&J, AbbVie and Amgen did not immediately respond to requests for comment on the letters.
It’s not the first time lawmakers have scrutinized pharmaceutical companies for their tax practices.
A March report accused Pfizer of pulling off what Democratic Sen. Ron Wyden, D-Ore., called “the biggest tax-dodging scheme” in pharmaceutical industry history. The report accused the company of using a tactic called “round-tripping” to avoid paying any U.S. income tax on $20 billion in domestic drug sales in 2019.
An investigation by Democratic staff of the Senate Finance Committee concluded that Pfizer used the tax loophole to funnel profits through offshore subsidiaries in tax havens like Ireland and Puerto Rico, despite selling to U.S. patients. But the company said it paid $12.8 billion in U.S. taxes over four years, and says documents to back that up have been filed with the Securities and Exchange Commission.
The letters on Tuesday come as the Trump administration considers imposing tariffs on pharmaceuticals into the U.S. in a bid to reshore manufacturing. Trump has complained that Ireland has successfully convinced drugmakers to open manufacturing operations there by offering low tax rates.
