Sen. Elizabeth Warren is once again calling out major pharmaceutical companies for what she sees as a broken and unfair system.
On Tuesday, Warren and Rep. Jan Schakowsky sent letters to five drugmakers—Pfizer, Merck, Johnson & Johnson, AbbVie, and Amgen, accusing them of avoiding federal taxes while charging Americans the highest prices for prescription drugs globally.
“Big Pharma companies like Johnson & Johnson and Pfizer charge Americans the highest drug prices in the WORLD while often paying ZERO dollars in federal taxes themselves,” Warren wrote in a post on X.
“Why? Because our tax system is rigged. Now, Republicans want to make it worse. I’m fighting back.”
Offshore Profits and Tax Loopholes
The letters say these companies moved their profits to places like Ireland and Bermuda, where taxes are much lower, to avoid paying U.S. taxes.
This move was made possible by a loophole in the 2017 tax law passed during Donald Trump’s presidency.
That loophole, according to Warren and Schakowsky, has let these firms avoid paying their fair share even as they report tens of billions in profits.
“These companies need to be held accountable for prioritizing their profits over people,” Warren said in a statement to CNBC.
“It’d be a slap in the face for Congress to expand tax loopholes for Big Pharma companies that are making billions in profit while overcharging Americans.”
Lobbying and the GOP’s New Tax Bill
The lawmakers also raised concerns that drug companies may have pushed to keep this tax break in place, as the Senate looks at the Republicans’ latest tax bill, called the “One Big Beautiful Bill Act.”
That bill would lock in many of the tax breaks passed back in 2017.
The bill passed the House in May and includes sweeping cuts to programs like Medicaid.
In their letter to Johnson & Johnson, Warren and Schakowsky pointed out the company spent over $150,000 lobbying on international tax issues in the last quarter of 2024, citing OpenSecrets data.
Companies Asked to Explain Their Tax Bills
The letters request that the companies disclose how much they owe in federal taxes and whether they support extending these tax cuts. Each firm has until July 1 to respond.
Johnson & Johnson responded by saying it looks forward to “clarifying” its “significant U.S. tax contributions and cooperatively responding” to the inquiry. The other companies did not immediately comment.
Previous Accusations and Possible Reform
This is not the first time Big Pharma has come under fire.
A March report accused Pfizer of avoiding U.S. taxes on $20 billion in domestic sales by rerouting profits through tax havens.
The company claimed it paid $12.8 billion in U.S. taxes over four years and said those records were filed with the SEC.
A March analysis by the Council on Foreign Relations estimated that closing the offshore tax loophole could raise at least $100 billion over 10 years.
Democrats Face Uphill Battle in the Senate
With Republicans holding a Senate majority, any Democratic effort to eliminate the loophole faces an uphill battle.
Still, Warren and Schakowsky are pushing for public pressure to force a shift.
“Our tax code has been skewed to benefit wealthy pharmaceutical corporations, enabling them to profit off Americans…without paying their fair share of taxes.”
Whether anything will actually change, or if this becomes another round of finger-pointing, remains to be seen.
IMAGE CREDIT: “Elizabeth Warren” by Gage Skidmore, via Flickr. Licensed under CC BY-SA 2.0. Image adjusted for layout.