Call for an end to drugs giants’ tax avoidance
OXFAM has called for a crackdown on pharmaceutical companies that avoid tax but charge high prices for life-saving drugs.
Four of the world’s largest pharmaceutical firms may be dodging taxes to the tune of an estimated $3.8bn (£3bn), suggests a new report from the charity.
The report warns that companies appear to be depriving governments – including the UK and several developing countries – of vital revenue that could be spent on fighting poverty and vital services for the poorest such as public health care.
Harmful Side Effects analyses financial disclosures of Abbott, Johnson & Johnson, Merck and Pfizer between 2013 and 2015 for 16 countries.
The data suggests that the companies may be dodging an estimated $112m (£88m) a year of tax across seven developing countries for which data was available: Chile, Colombia, Ecuador, India, Pakistan, Peru and Thailand.
In these countries, where a total of 143 million people live in extreme poverty, $112m is enough to pay for 10 million girls to be vaccinated against the virus that causes cervical cancer. This kills one woman every two minutes worldwide, the overwhelming majority from poorer countries.
Three of the pharmaceutical companies have a presence in UK-linked tax havens – Bermuda, British Virgin Islands, the Cayman Islands and one or more of the Channel Islands – but due to a lack of transparency in these jurisdictions it is not possible to say what impact these have.
Harmful Side Effects also outlines how the pharmaceutical industry uses its economic and political influence to shape government policy and sets medicine prices extremely high – often making them unaffordable for cash-strapped public health services and patients. For example, a standard 12-week course of Pfizer’s breast cancer drug Paclitaxel can be produced for $1.16 (91p) yet sells for $276 in the US and £716 in the UK.
Oxfam is calling for an overhaul of the current research and development model for new drugs, so that it is dictated primarily by public health needs rather than by profits, with greater transparency over costs, clinical trials and pricing.
Rachel Cable, Head of Oxfam Cymru said: “While we are all working hard and paying our taxes these big companies are dodging their tax bills and getting away scot-free.
“The profit lining their pockets could be spent on our NHS in Wales, and could make a life changing difference to healthcare provision in developing countries such as Ecuador, Peru and Thailand.”
A Welsh Government spokesman said: “We are working to ensure patients in Wales can access cost effective innovative medicines at a price the NHS can afford. Together with the other UK Governments we are working on a new agreement to control NHS expenditure on branded medicines to replace the current Pharmaceutical Price Regulation Scheme which ends this year.”
In a statement on its website, Pfizer said: “In 2016, we spent over £250m supporting research and development carried out in the UK and contributed to 162 collaborations with universities, pharmaceutical companies, industries and others.”