Lower Drug Prices Now and Oxfam join with Merck Investors Oregon State Treasurer to Confront Merck’s Reliance on High-Risk Schemes
Tuesday, May 26, 2020
WASHINGTON – Today, ahead of Merck & Co’s shareholder meeting, Lower Drug Prices Now joined with Merck shareholders, including Oxfam and the Oregon State Treasurer, to issue statements challenging the drug corporation’s record of price gouging and tax avoidance. Merck’s reliance on short-term schemes, such as using monopoly power to hike drug prices is particularly troubling since Merck is now developing a COVID vaccine with direct support from US taxpayers.
While charging Americans $13,500 per month for its life-saving cancer drug Keytruda, the drug corporation is projecting revenue north of $22 billion by 2025, with a 32% pay raise for Merck’s CEO Ken Frazier last year. Relentless profiteering and price-gouging patients has made prescription drug corporations “the most poorly regarded industry” in the country, according to Gallup.
Instead of increasing accountability and protecting patients, President Trump has rewarded Merck by giving the corporation a $1.2 billion dollar tax break. Rather than investing those dollars back into research & development on promising drugs for Americans that year, Merck stuck to pharma’s business-as-usual model, spending $9 billion on stock buybacks, putting $14.26 billion back in the pockets of their shareholders (including dividends), and gutting R&D by $450 million. Under the same tax laws, Merck is expected to get another $7 billion in tax breaks through 2025.
In addition, Merck has a history of monopoly price-gouging their most popular and highest selling drugs, while lowering the price of their poorest selling drugs as a public relations stunt:
“Merck priced it’s blockbuster cancer drug, Keytruda, at over $4,000 per vial,” said Margarida Jorge, national campaign director for Lower Drug Prices Now. “That kind of greed neither helps patients nor serves the interests of long-term investors. By jacking up prices and avoiding taxes to boost short-term profits, they have triggered an avalanche of public outrage that will come home to roost. Forcing sick people to choose bankruptcy or forgoing life-saving medicines isn’t just bad business, it violates the corporation’s own mission to operate with integrity and save lives. Merck’s short-term profiteering schemes are another reason for the growing bipartisan demand for bold government action to lower drug prices.”
“Merck uses every trick in the book to avoid paying their fair share of taxes, including a long record of shifting its profits into offshore tax havens – all the while raising prices on essential medicines,” said Niko Lusiani, Senior Advisor at Oxfam America. “Merck received $1 billion under the 2017 Trump tax cuts, but instead of using that money in the public interest, the company has since cut R&D by $1 billion, and last year spent over 100% of its profits to enrich wealthy shareholders. It’s time for change.”
“Pharmaceutical corporations should be looking for ways to deliver long-term growth for their shareholders, rather than focusing on short term practices that create reputational, legal, and regulatory risk,” said Tobias Read, Oregon State Treasurer. “This is even more true for companies that have received public subsidies.”
Lower Drug Prices Now is a national coalition of nearly 60 social, racial and economic justice organizations with members in all fifty states. We are committed to transformative, systemic and bold reforms to ensure everyone has access to affordable medicines — no matter where they live, what they look like or how much money they have. Learn more at www.lowerdrugpricesnow.org and follow us on Twitter @peopleb4pharma.