McCaskill Slams Tax Windfall for Pharmaceutical Companies at the Expense of Rising Drug Prices for Missourians
Citing reports of tax windfalls for pharmaceutical companies as prescription drug prices continue to rise, Senator responds: ‘You talk about a vice grip—pharma has a vise grip on Congress’
WASHINGTON – U.S. Senator Claire McCaskill slammed the influence of pharmaceutical companies in Congress at a Senate Finance Committee hearing, citing the tax windfalls the companies have received while continuing to raise prescription drugs prices for Missourians.
“Price increases for the twenty most-prescribed drugs in Medicare Part D have gone up 12 percent every year for the last five years—approximately 10 times higher than the average rate of inflation,” McCaskill said. “Which is really unbelievable, if you think about it, that those kinds of price increases are going on in the Medicare Part D program where this body has not even had the guts to stand up to the pharmaceutical industry and say we’re going to negotiate for volume discount. I mean, you talk about a vice grip—pharma has a vise grip on Congress.”
Click HERE to watch McCaskill’s questioning at the hearing.
McCaskill has made tackling rising healthcare and prescription drug costs a top priority in the Senate. She recently released a report as part of her role leading the Senate’s top oversight committee that found that the cost of many of the most popular brand-name drugs are increasing at ten times the rate of inflation.
McCaskill continued, “It’s estimated that [pharmaceutical companies] have gotten in terms of a windfall just since this tax bill has gone into place—$45 billion that all went to the owners of their companies. And guess what? There has not been one announcement that the price of any of those highly prescribed drugs—and by the way this bill continues to allow them to deduct the cost of advertising prescription drugs, we’re the only country in the world besides New Zealand that allows the pharmaceutical industry to advertise prescription drugs and deduct the cost of it, we kept that in place for them—but there is absolutely no relief for Missourians in terms of drug prices.”
A recent Senate report found that large pharmaceutical companies are using savings from the recent Republican tax bill for a combined $45 billion on stock-buyback programs, including executive compensation, rather than research and development to develop new life-saving treatments. McCaskill has also introduced legislation to end taxpayer subsidies pharmaceutical companies receive for the billions of dollars they spend on direct-to-consumer prescription drug advertising each year, which currently is fully tax-deductible.
In earnings calls and documents, 20 of the top 37 Fortune 500 health care companies—including pharmaceutical and health insurance companies—have detailed annual shareholder savings of $10 billion a year, adding up to an approximate $100 billion corporate windfall over ten years from last year’s tax bill, according to a recent Senate Finance Committee report backed by McCaskill—all while prescription drug costs for Missourians continue to rise.
McCaskill recently introduced a bipartisan bill to prohibit “pharmacy gag clauses” that lead to consumers needlessly overpaying for prescription drugs, and last year, President Trump signed into law her bipartisan legislation to increase competition for generic drugs and help lower prescription costs.