America has a drug problem – and Bernie Sanders wants to treat it
December 11th, 2015
Dvora Zomberg
At noon on December 5, 2015, a small group of people showed up outside Pfizer, Inc.’s gleaming world headquarters in Midtown Manhattan. Carrying handwritten signs reading “Congress: Stop corporate tax inversions!” and “Stop Pfizer tax pfunny business [sic],” the several dozen protesters congregated on the sidewalk to express their outrage over the corporation’s latest plans for the largest corporate inversion in American history.
“Pfizer is just a symptom of the disease we have in America,” announced Frank Clemente, Executive Director of Americans for Tax Fairness and one of a handful of speakers at the event. “We are here today in front of Pfizer because this giant drug company has decided to desert America. It is using a giant tax loophole to dodge tens of billions of dollars in taxes that it owes to the American people. The tax system is rigged, and it’s not in your favor!”
Clemente’s indignation, which was supplemented by the small crowd’s encouraging chants (“We pay taxes; Pfizer dodges taxes!” and “Pfizer’s tax dodge makes me sick!” were two oft- repeated favorites), is the result of the pharmaceutical company’s decision to merge with Allergan, a Dublin- based company and manufacturer of cosmetic pharmaceuticals including Botox and Juvederm. With the almost- guaranteed consent of stockholders from each of the two companies, Pfizer will reincorporate overseas, allowing them to pay their tax dues in Ireland – a “tax haven,” as Clemente called the country. The corporate tax rate in America is 35% (although Pfizer currently pays a rate of 25%), which is almost three times that of Ireland’s 12.5% – and with respect to companies as profitable as Pfizer, whose revenue reached $49.6 billion in the fiscal year of 2014, the averted dues can amount to billions of dollars of lost revenue for the American government and her citizens.
Because of the enormous monetary figures involved in the Pfizer- Allergan inversion, a number of American politicians and 2016 presidential candidates from both major political parties have publicly commented on Pfizer’s move toward overseas reincorporation. The response has been overwhelmingly negative, drawing bipartisan opposition almost unanimously – a feat that is almost unheard of amidst today’s partisan rifts. Following the November announcement, Secretary of the Treasury Jack Lew told reporters from The New York Times that the U.S. Treasury had the capacity to merely slow down harmful inversions, but that new legislation was required to close the loopholes that allow for such phenomena to occur. According to Irish Times, Hillary Clinton suggested implementing a heavy tax on corporations that are or plan to become involved in inversions. Even President Barack Obama himself weighed in on the matter, shaming Pfizer for what he believed to be an “unpatriotic” choice. But arguably most infuriated by Pfizer’s tax evasion was Vermont Senator and increasingly-popular Democratic presidential candidate Bernie Sanders, whose campaign endorsed last Friday’s protest against Pfizer. A longtime critic of corporate greed, the senator called upon both the current president and Congress to put an end to Pfizer’s abuse.
“The Obama administration has the authority to stop this merger, and it should exercise that authority,” Sanders wrote in a statement on his Senate website just after Pfizer’s announcement, “Congress must pass real tax reform that demands that profitable corporations pay their fair share of taxes.”
Senator Sanders, or just “Bernie,” as many of his supporters affectionately call him, has a long history of conflict with pharmaceutical companies; his deeply- embedded hatred for Big Pharma is perhaps most singularly representative of his self- described democratic- socialist ideology. Since the beginning of Sanders’s campaign, the senator has become even more outspoken against the controversial conduct of America’s pharmaceutical industry. When CEO Martin Shkreli of Turing Pharmaceuticals donated $2,700 of his own money – the maximum contribution that individual donors are allowed to give – to Bernie Sanders’s presidential campaign, the senator’s campaign managers were quick to decline the donation. (The Turing CEO later told CNN Money that his donation had been made in the hopes that Bernie Sanders would engage with him in a pharmaceutical policy discussion, and when he learned that Sanders’s campaign refused the funds, he took to social media in rage.) Despite Shkreli’s indignation, which remains available on his official Twitter account, Sanders’s campaign still refused to accept funds from whom they called “the poster boy for drug company greed,” an accusation that stemmed from Martin Shkreli’s actions regarding his company’s newest acquisition.
In September, Turing Pharmaceuticals purchased the rights to Daraprim (pyrimethamine), a medication used for treatment of toxoplasmosis in patients with compromised immune systems, such as pregnant women and people infected with HIV. Although the patent for Daraprim had expired decades prior to Shkreli’s acquisition, Turing remained the sole manufacturer of pyrimethamine – which infuriated the nation when Shkreli raised the price of Daraprim from $13.50 to $750 per pill, a 5000% increase in the cost of the life- saving but now entirely- unaffordable medication. For Bernie Sanders, whose political mission is dedicated to preserving and supporting the American middle class, the implications of Shkreli’s price hike were more than ample reason to redirect the CEO’s donation.
“The Senator did not solicit and did not want Martin Shkreli’s money, and because of what [price gouging for Daraprim] meant for the gay community, we decided to donate the funds to Whitman-Walker Health Clinic, which specializes in HIV research,” confirmed Bernie Sanders’s spokesman, Michael Briggs, when revisiting the campaign’s position on Shkreli’s donation. When asked about the candidate’s biggest concern regarding the pharmaceutical industry, Briggs referred to the industry’s ability to take advantage of its patients, many of whom already cannot afford treatment under the current American healthcare system.
“It isn’t fair to the countless Americans who cannot get the help they need when they need it,” Briggs said, “and when these people do go to the doctor, they are prescribed medications that they cannot afford because of the way pharmaceutical companies have controlled Congress for all these years.”
Sanders’s stances on Big Pharma are closely tied to his opinions on super PACs, entities toward which the senator holds strong oppositional views. Since the Citizens United Supreme Court decision of 2010, which paved the way for the virtually- unrestrained development of super PACs and group- led funding, Bernie Sanders has spoken out in resistance to what he believes is an oligarchic practice of “legalized bribery.” Making reference to Abraham Lincoln’s famed Gettysburg Address, Sanders stood before the Senate in August 2015 to discuss the impact that super PACs have on selection of elected officials.
“In the year 2015, with a political campaign finance system that is corrupt and increasingly controlled by billionaires and special interests, I fear very much that government of the people, by the people, and for the people is in fact perishing in the United States of America.” His Brooklyn accent thick with solemnity, Senator Sanders later paused to ask his audience the following question: “How many of billions and billions of dollars will be used to elect candidates who represent the rich and the super- rich?”
Sanders’s hatred of both super PACs and Big Pharma stem from his fear of a common phenomenon: The overrepresentation of the wealthiest Americans and neglect of the middle and lower classes that is so prevalent in the country today. According to Senator Sanders, both the pharmaceutical industry and super PACs have the money to dominate the political playing field, and both of these entities are funded and run by members of the wealthiest class in America – leaving little opportunity for the voices of regular Americans to be heard or for their needs to be met. And though Bernie Sanders himself can refuse donations to his campaign from both super PACs and certain Big Pharma heads, like the other enraged politicians who have spoken out against Pfizer’s imminent relocation to Ireland, he is powerless against the corporation’s plans to funnel its money abroad and, by extension, out of the pockets of the American people.
Once the Pfizer- Allergan deal is finalized, the two companies anticipate the merge to be effected as early as next year if legislation is not passed to block it. Though the protesters at the anti- inversion event last Friday were politically well- connected – one of the speakers, Liz Krueger, is a member of New York’s state senate – it seemed unlikely that the group’s request for New York Senator Chuck Schumer to lead the fight against corporate inversions will be met in time to block the motion. But that didn’t mean demonstrators weren’t going to try.
Toward the conclusion of the December 5th protest, New York City Public Advocate Leticia James gestured passionately with her hands as she denounced Pfizer’s impending inversion. Waving toward the upper floors of Pfizer’s headquarters, where Pfizer CEO Ian Read presumably sat, James joined her fellow protesters in chanting “Pay your taxes!” toward the vicinity of the corporation’s offices. And in just a few words, Ms. James proceeded to deliver the most potent line of the event:
“Some people call it tax evasion. Others call it — theft!”
Turing Pharmaceuticals and Pfizer could not immediately be reached for comment.