Ahead of Trump’s Drug Pricing Announcement, Booker Report Outlines How Pharma Firms’ Windfall Not Being Used to Reduce Costs
WASHINGTON, D.C. – Ahead of President Trump’s announcement on drug prices scheduled for tomorrow, U.S. Senator Cory Booker today highlighted a report from his office showing how drug companies plan to use their tax savings from the GOP tax bill passed last year.
According to the 15-page report released by Booker’s office last month, the largest 10 pharmaceutical companies in the nation have announced no plans to pass on any of their newfound tax savings from the Republican tax bill to consumers in the form of lower drug prices.
Instead, half of the firms plan to use their windfall to repurchase shares of their own stock, a mechanism to boost the individual stock price for shareholders. So-called stock buybacks overwhelmingly benefit wealthy individuals – 84 percent of stocks are controlled by the wealthiest 10 percent of Americans.
“President Trump’s actions are louder than his words,” Senator Booker said. “Despite repeated campaign promises to lower the price of prescription drugs, he has failed to take any meaningful action to help the millions of Americans who are struggling to afford their medicine. Instead, he’s focused his efforts on a giant tax cut for the wealthiest individuals and corporations.”
“As my report shows, drug companies are reaping massive profits from the GOP tax law, but they have seemingly no interest in stemming the tide of skyrocketing prescription drug prices. This is profoundly discouraging. The pharmaceutical industry – and President Trump – need to get their priorities straight.”
Background on the report:
Senator Booker’s staff reviewed transcripts of the fourth quarter earnings calls and other public forecasting statements of the largest 10 U.S.-headquartered pharmaceutical companies – Pfizer, Merck & Co., Johnson & Johnson, Gilead Sciences, AbbVie, Amgen, Bristol-Myers Squibb, Eli Lilly & Co., Celgene, and Mylan.
Their findings revealed no evidence that drug companies were using any of their tax savings to lower the price of prescription drugs. Instead, their analysis revealed that five of the 10 firms have announced $45 billion in new stock buyback programs. That figure represents roughly one-fifth of the more than $200 billion in buyback announcements made during the initial three months during and after final passage of the tax law across all industries.
Booker sent his 15-page report to the CEOs of the 10 drug companies, and urged them to use their tax savings to combat skyrocketing drug prices.
Today’s report is part of Booker’s ongoing effort to lower consumer drug prices for the millions of New Jerseyans and Americans who struggle to afford their medicine. Last year, Senator Booker introduced a bill – the Affordable and Safe Prescription Drug Importation Act – with Senators Bernie Sanders (I-VT) and Bob Casey (D-PA) that would allow Americans to import safe, low-cost medicine from Canada and other advanced countries. Booker is also a sponsor of legislation that would allow Medicare to negotiate lower prescription drug prices, make it easier to get generic drugs to market, and make other key reforms to bring down high drug costs. As Mayor of Newark, Booker pioneered an innovative program to deliver free and reduced prescriptions to low-income uninsured Newarkers.