If you’ve ever wondered how multi-billion dollar pharmaceutical companies play dirty, aside from creating drugs which cause adverse side effects for millions and skirting FDA and regulatory testing with acumen, then look no further than the inversion deal – the re-incorporation of a company abroad to avoid paying taxes where money was made right here in America.
Due to new U.S. Treasury rules, companies like AstraZeneca (maker of Nexium as well as other nefarious drugs) and Shire won’t be able to avoid taxes on profits earned at home. They are also experiencing a sharp fall in stock prices due to the new Treasury ruling.
This may seem like small potatoes for those with a mind for international business, but the pharmaceutical world makes wheelbarrows of cash off the U.S. public; we are the largest consumer of pharmaceutical meds in the world.
Navid Malik, head of life sciences research at Cenkos Securities, said:
“Inversion deals now are clearly going to be very difficult to pull off.”
The Treasury move threatens pending mergers, too. A deal was possibly averted for AbbVie to buy Shire for $55 billion and deters Pfizer from making another attempt to acquire AstraZeneca after a $118 billion takeover attempt failed in May.
Both companies have experienced an $8 billion dollar loss in combined market value due to these changes – but don’t feel sad for two of the larger pharmaceutical empires on the planet.
In Katharine Greider’s book, The Big Fix, How the Pharmaceutical Industry Rips off American Consumers, she says:
‘The amount we spend on prescription rugs each year is rising, and it is rising dramatically – by some 15% a year for the past several years. That’s about twice the rate of overall health spending and five times the rate of inflation.’
Disgusting: Even Huge $11 Billion Fins Don’t Stop Big Pharma
And in a telling quote from a lecture series out of the Edmond J. Safra Foundation Center for Ethics at Harvard, experts have this to say about institutional corruption at the highest levels in the pharmaceutical industry:
“Institutional corruption is a normative concept of growing importance that embodies the systemic dependencies and informal practices that distort an institution’s societal mission.
An extensive range of studies and lawsuits already documents strategies by which pharmaceutical companies hide, ignore, or misrepresent evidence about new drugs; distort the medical literature; and misrepresent products to prescribing physicians.
We focus on the consequences for patients: millions of adverse reactions. After defining institutional corruption, we focus on evidence that it lies behind the epidemic of harms and the paucity of benefits…
If “corruption” is defined as an impairment of integrity or moral principle, then institutional corruption is an institution’s deviation from a baseline of integrity.”
I have no sympathy for Big Pharma companies who try to shirk tax responsibilities while fleecing a nation. Do you?