Taxes

Rx for Rip-Offs: Pfizer Tax Breaks Benefit No One but Themselves

It’s enough to make you reach for your blood pressure medications. The PhRMA giant Pfizer has been pocketing “yuge” tax breaks, only to raise drug prices, cut back essential research, lay off workers, and raise its CEO’s salary to stratospheric heights.

Tax Windfall, Price Hikes. With an $11 billion windfall from President Trump’s tax cuts, Pfizer reported $12.27 billion fourth quarter profits last year.

  • These eye-popping profits came after Pfizer raised prices on 20 drugs by almost 10 percent, including Pristiq, Lipitor, and Zoloft, which are available as generics.
  • Earlier in the year, Pfizer jacked up prices for another 91 drugs by an average of 20 percent.

Cutting Back Research, Laying Off Workers. Meanwhile, Pfizer is ending its research programs for new medications for Alzheimer’s disease and Parkinson’s disease.

  • The PhRMA giant is laying off 300 employees in Cambridge and Andover, Massachusetts, and Groton, Connecticut.

CEO Gets 61% Pay Raise. But it isn’t all layoffs and long faces at Pfizer. Chairman and CEO Ian Read is getting a 61 percent pay raise to $27.9 million. His pay package includes:

  • A base salary of $1.96 million;
  • A $2.6 million bonus;
  • $13.1 million in equity awards;
  • And an $8 million special equity award.

Can’t Afford to Lose Him. At a time when older workers are being discarded and younger workers suffer from “no-compete” contracts, Read, who is 65, is benefiting from both.

  • Pfizer’s board approved Read’s lavish pay package to offer him a “compelling incentive” not to retire.
  • As part of the deal, he agreed not to work for a competitor for two years after eventually retiring.

Categories: Taxes, Wages