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Pharmaceutical companies run away from paying taxes

18 September 2018

A new Oxfam report indicates that the world's largest pharmaceutical companies are running away from paying taxes worth 3.8 billion dollars a year.

The report 'Prescription for Poverty,' examined the companies Pfizer, Merck & Co (MSD), Johnson & Johnson and Abbott, which are among the largest pharmaceutical companies in the world. Among other things, the report indicates that:

- The companies avoid paying $112 million a year in taxes in seven developing countries: Thailand, India, Ecuador, Pakistan, Peru and Chile. If the governments of these countries had invested that money in health care, it would have been enough to vaccinate 10 million girls against the virus that causes cervical cancer, one of the deadliest forms of cancer that globally causes the death of a woman every two minutes.
- Corporations are escaping paying $3.7 billion in taxes in nine rich countries, including Australia, Denmark, France, Germany, Italy, New Zealand, Spain, the United Kingdom and the United States. The $2.3 billion the US lost in tax revenue would have been enough to provide health insurance for nearly a million poor children.

"Pharmaceutical companies appear to have cheated governments out of taxes that could be invested in healthcare. They price their drugs so that poor people can't afford them and use their power and influence to shoot down any attempt at scrutiny and lower prices."

Winnie Byanyima, CEO of Oxfam International

Oxfam's review indicates that the four companies are shifting profits from their countries of operation to tax havens and overpricing medicines, making them inaccessible to poor patients and under-resourced public health services. The report also describes how the pharmaceutical industry uses its economic and political influence to influence government policies on tax, trade and health care to benefit its own interests - particularly in the US, where the pharmaceutical industry spends over $200 million annually on lobbyists and political donations.

Tax evasion reinforces the inequality crisis that widens the gap between rich and poor. When pharmaceutical companies avoid paying taxes, the poorest are hit hardest as governments are forced to cut basic social services and raise other taxes, and the UN estimates that corporate tax evasion costs poor countries $100 billion a year.