Drug Companies Rip Off the Public
While the pharmaceutical and medical device companies continue to score high profits many also work hard to hide those profits from U.S. taxation. Pfizer’s recent attempt to buy out London’s Astra-Zeneca is a good example of the strategy called tax inversion. By this method if the new entities that are created have at least 20% ownership by foreign stockholders they are allowed to pay their taxes at much lower rates in their adopted countries.(1) The 11 largest global drug companies already made an astonishing $711 billion in profits over the 10 years ending in 2012(2). And while all of this profiteering is going on the pharmaceutical companies are charging U.S. citizens astronomical amounts for cheaply made drugs. And, guess what, they spend 19 times more on marketing than they do on research and development.(3) This is the free market at work. The invisible hand needs to write some new regulations.