During remarks on the Senate floor Thursday, Senate Democrats spoke about the findings from their investigation into alleged fraud committed by Pfizer which they believe was enabled by Trump's 2017 Tax Cuts.
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NewsTranscript
00:00Senator Morgan is recognized.
00:02Mr. President, four years ago, I kicked off an investigation of Big Pharma's tax practices,
00:08the dodges and tricks these hugely profitable multinational companies use to winnow down
00:15their tax bills.
00:16This was not very long after Trump's first tax breaks for corporations went into effect.
00:22My Democratic colleagues on the Finance Committee and I wanted to know exactly how sweet a deal
00:29Trump gave the biggest drug companies, what changes needed to be made to ensure these
00:35corporations paid a fair share.
00:38So far in the course of my investigation, I've released information on the tax practices
00:43of five major drug companies, AbbVie, Abbott Laboratories, Amgen, Bristol-Myers Squibb,
00:50and Merck.
00:51The questions that I asked these companies were not very complicated.
00:56Essentially, what I asked came down to questions like, how big were your sales?
01:01Where did you make them?
01:03Where did you report your profits?
01:05Where did you stick your intellectual property?
01:08Did you actually pay taxes?
01:10Last year, I expanded my investigation with an inquiry to the company Pfizer.
01:15Pfizer initially resisted, but my staff and I were not going to let up.
01:20Finally, the company provided some answers to our questions.
01:24For example, we're going to get into those issues now, and I ask unanimous consent to
01:30enter into the record a memorandum outlining records of my investigation relating to Pfizer's
01:35tax avoidance schemes, which will also be available immediately on the Finance Committee's
01:41website.
01:42I ask unanimous consent to have the report entered in the record now.
01:45Without objection.
01:46Mr. President, I'm going to take a few minutes to walk through these findings and discuss
01:50why they're so important.
01:52And I'm very pleased to be joined by several of my colleagues who are also outraged about
01:57this tax dodging.
01:59Here's the upshot, Mr. President.
02:02My investigation has found that Pfizer carried out what could be the largest tax dodging
02:09scheme in the history of big pharma.
02:13The U.S. is the largest market for Pfizer's products.
02:17In 2019, the company sold $20 billion worth of drugs to American patients.
02:23Now if you're following along on this discussion, you might be hoping to hear that Pfizer paid
02:28a reasonable rate of tax on those profits.
02:31I've got bad news for you and the American people.
02:35In that same year, Pfizer reported zero, not one red cent in taxable U.S. profits through
02:45various tricks and games, Pfizer was able to shift 100% of its U.S. profits to foreign
02:53tax havens.
02:55This means that Pfizer dodged billions of dollars in federal income tax on its U.S.
03:01drug sales.
03:03There is every reason to believe it continues to do so.
03:07And thanks to the tax law Trump and Republicans passed in 2017, Pfizer doesn't need to keep
03:13the money stashed overseas.
03:16Pfizer can take this cash and pocket it with tax dodging schemes and turn it into stock
03:22buybacks, dividends, executive compensation, the list goes on.
03:29Now there's an additional matter that's so disturbing.
03:32The company appears to be keeping some of its tax schemes hidden from view with what
03:38has been described to me as a confidential arrangement with the governments of Puerto
03:42Rico and Singapore.
03:45It's enough to leave you slack-jawed.
03:48So this is a Senate investigation that will have a direct impact on tax legislation and
03:54Pfizer is hiding relevant tax information behind nondisclosure agreements.
04:01So colleagues, this is the sixth big pharma company where my investigation has found a
04:07staggering level of tax dodging.
04:11And these ripoffs don't happen by osmosis.
04:14They happen because Republicans have allowed them to happen.
04:17With the tax law they passed back in 2017, Republicans delivered to big pharma a tax
04:22break of more than 40 percent.
04:25From 2014 to 2016, the industry paid 19.6 percent on average.
04:31In 2019 and 2020, it paid 11.6 percent.
04:35Now reasonable people watching at home might be thinking about how Republicans always claim
04:41to be worried about deficits and debt.
04:44Surely those Republicans would dial back what they did in 2017 and ask these huge profitable
04:51corporations to pay a little bit more to ease our fiscal challenges.
04:57If you think that's the case, wrong.
05:00So I want to bring my colleagues into this discussion momentarily and I'll close by looking
05:05at the big picture as the Congress moves forward with this debate on taxes, health, child hunger
05:10and more.
05:12Republicans are in control of the Congress and the White House and they have locked Democrats
05:16out of the discussion.
05:18Somewhere here on Capitol Hill, there's a group of Republicans meeting right now behind
05:23closed doors, quietly planning the outline of their gigantic bill.
05:28Nobody in that room is talking about how to protect people who work for a living or how
05:33to get more fairness in the economy.
05:35The discussion they're having comes down to how big the handouts are going to be for billionaires
05:40and multinational corporations.
05:43How many tens of millions of Americans are going to kick off Medicaid to pay for it?
05:47How many millions of kids are going to go hungry?
05:50How many hundreds of thousands of workers are going to lose their jobs?
05:54Republicans are doubling down on a broken system.
05:57And if you want to see that system in action, read our report because you couldn't find
06:02a better example than Big Pharma's tax dodging.
06:06These are huge corporations that rake in enormous profits in U.S. sales because they
06:11charge astronomical prices in America.
06:15And then their stables of lawyers and accountants get to work on a whole bunch of fancy financial
06:20wizardry taking advantage of loopholes and ripoffs planted by Republican lawmakers.
06:26Suddenly the record profits get shipped overseas.
06:29Often the factories get shipped overseas.
06:31The jobs get shipped overseas and the companies aren't paying anything close to a fair share
06:37of taxes.
06:39Typical Americans who pay tax out of every paycheck get ripped off.
06:44Republicans are not going to fix this broken, unfair system.
06:47In fact, they're gearing up to give tax dodging corporations like these and their billionaire
06:52shareholders even bigger handouts.
06:55It's a scam.
06:56It's a ripoff on a national scale.
06:59The American people see it for what it is.
07:01We're going to keep calling it out, Senate Democrats, because this must not stand.
07:07So I'm very appreciative that my colleagues are joining me here on the floor.
07:10We have a very important member of the Senate Finance Committee to start, Senator Whitehouse,
07:15and I want to send this over to him.
07:18Senator Whitehouse.
07:19Thanks, Chairman Wyden.
07:20This is a really important investigation, and it bears very exactly on the Republican
07:27tax scam that is being cooked up right now here in this Congress.
07:34Because one of the keys to the Republican tax scam that is being cooked up right here
07:40in this Congress is giving big corporations the ability to move their profits and even
07:48their jobs offshore, away from America, and get a tax break for doing that.
07:56And the total value of this tax break, the award to big corporations from Republicans
08:05for moving American jobs and profits offshore, is running at about $140 billion that other
08:15taxpayers are going to have to make up.
08:18Big Pharma is the big winner in this offshore tax scam.
08:26If you look at Big Pharma's numbers, most sales are to U.S. patients.
08:34They sell their pharmaceutical products to Americans.
08:39But when you look at their financial reporting, 75% of their profits are declared as coming
08:48from outside of the United States.
08:52So you got some funky math going on here, because we know that Americans are charged
09:02more for Big Pharma's drugs than people are overseas.
09:09They overcharge Americans.
09:12Americans pay the highest prices.
09:17And most of the sales are going to Americans who are paying the highest prices.
09:26So how is it that when most of their sales are going to Americans who are paying the
09:32highest prices, that's not where the profits are reported?
09:38The profits are reported from overseas, where they have fewer patients paying lower prices.
09:44How does that work?
09:45That works, S-C-A-M, scam.
09:50And that's what the Republicans in Congress are trying to push forward into the future.
09:57Thanks to the terrific work of our chairman, we have some specific examples.
10:03The Republican tax scam went into effect in 2017.
10:08So they had to move pretty quickly.
10:10So we're looking at now 2019.
10:11How quickly did Pharma enjoy the benefit of this tax scam at Americans' expense?
10:19Well, AbbVie is one company.
10:22In 2019, it declared three-quarters of its profits, sorry, three-quarters of its sales
10:33to American customers, and essentially all of its profits offshore.
10:41They charged, as Pharma does, they charged Americans the highest prices.
10:48And they sold 75 percent, nearly, of their drugs to those highly-priced American customers.
10:56And yet they claim that all of their money came from the small fraction of their sales
11:01that they made at lower prices offshore.
11:04Again, S-C-A-M.
11:09Who gets hurt?
11:11Well, who gets hurt is American workers, because very often the jobs go offshore along with
11:17the profits.
11:19So an American worker loses his job so that an American company can move that job offshore
11:28and pay some foreign person for the work that should be here, and gets rewarded by Republicans
11:35in Congress for a tax break for doing that.
11:38Who else gets hurt?
11:40Small businesses get hurt, because if you're running a small business, you can't set up
11:45this elaborate tax scam.
11:47You don't have the accountants.
11:48You don't have the lawyers.
11:49You may not even have the nasty motive to try to cheat your own government this way.
11:56So small businesses take it in the neck against the big businesses who can dodge their taxes
12:02through this complicated scam.
12:05And even some big American domestic companies, like Rhode Island-based CVS, who are an all-American
12:12company who don't fake their profits to be coming from Bermuda or the Cayman Islands
12:18or Singapore or wherever else, they suffer, too, because they're in competition with the
12:24big multinationals that are playing shell and pea games with their profits to hide it
12:32from the IRS.
12:34So here's the racket.
12:35One, you overcharge Americans.
12:37Two, you use the money that you earn from overcharging Americans to come to Congress
12:43and buy massive amounts of influence and get the Republican Party to do exactly what you
12:49want.
12:50And what you want is, stage three, the tax scam that lets you pretend you're making money
12:56offshore when you're really not.
13:00And then you save money by not having to pay taxes.
13:03And then you keep overcharging Americans.
13:05You keep buying Congress.
13:07You keep the tax scam going.
13:11It's rinse and repeat.
13:13And the big losers are Americans.
13:15Where it comes home is where the chairman did his outstanding work for Pfizer.
13:21$20 billion is what Pfizer sold in drugs in America.
13:27$20 billion is what Pfizer sold in drugs overseas.
13:31They charged more to Americans because pharma charges more to Americans.
13:36We know that.
13:37And yet, Pfizer told the IRS that all, all of its profits came from offshore.
13:45All of it.
13:46And as a result, they got a huge, huge tax dodge.
13:52So whether it's AbbVie or whether it's Pfizer or whether it's the industry as a whole, we
13:57need to shut down this tax racket.
13:59It is not serving anyone.
14:01It costs American jobs.
14:02It's unfair to small businesses.
14:04And it cheats the regular taxpayers who pay their taxes honestly and can't pretend that
14:09the revenue they made off American customers is somehow magically appearing out of the
14:15Cayman Islands or some other foreign hideaway.
14:19Thank you very much, Chairman Wyden, for your amazing work.
14:21Well, well said, Senator Whitehouse, and I want to get my colleagues into this next in
14:25order of appearance, Senator Van Hollen.
14:28And once again, I want everybody to understand that the four of us are going to continue
14:33to go after this colossal tax avoidance until it gets fixed, because the American people
14:38are getting ripped off.
14:39Senator Van Hollen.
14:40Well, thank you, and thank you, Mr. President.
14:42I want to thank Senator Wyden for bringing us together to shine a spotlight on one of
14:49the biggest tax heists in American history, the huge 2017 Trump tax giveaway to the very
14:58rich and the biggest corporations that came at the expense of everybody else in America,
15:05because everybody else in America has to pick up the tab for that giveaway to big corporations
15:12and the very rich.
15:14And that tax heist played out right here on the Senate floor.
15:20So why are we gathered here today to talk about something that happened here eight years
15:26ago?
15:27And the answer is because it's about to happen all over again.
15:32In fact, this time, maybe on steroids.
15:35And the American people need to know what will go down right here on the Senate floor
15:40in a matter of months if we don't stop it.
15:44So let's take a look at what Donald Trump and Republicans in Congress promised eight
15:50years ago when they passed their big tax giveaway for the rich, and then look at what actually
15:54happened.
15:56They promised that tax cuts to the very rich would trickle down and somehow benefit everybody
16:01else in the country.
16:03Didn't happen.
16:05They promised that it would generate so much new economic activity that it would pay for
16:10itself.
16:11But that didn't happen.
16:12It added $1.5 trillion to our national debt, and if you extend that out another 10 years,
16:18that will be another $5.5 trillion on the debt.
16:23They promised that if they gave these benefits to big corporations like Pfizer and others
16:28in the pharmaceutical industry, that they would use their tax savings to provide raises
16:35of $4,000 on average to all of their workers.
16:41Didn't happen.
16:42I'll tell you who did get big bonuses.
16:45It was the CEOs and the executives.
16:48And they promised that they would use their savings, that corporations would use another
16:53part of their savings to reinvest in plant and equipment, and therefore help the whole
17:00economy.
17:01Didn't happen.
17:02What those big corporations did was use a lot of their tax savings for stock buybacks
17:09to jack up the price of their own stock.
17:13This plan that they passed, the Trump tax plan, passed 8 years ago, did something else.
17:21It provided that mechanism to help some of the biggest corporations in America duck their
17:26tax obligations to the American people by shipping their profits overseas and engaging
17:34in all sorts of scams.
17:36And today, we have even more evidence of the fact.
17:40And I want to, again, thank Senator Wyden and his team on the Senate Finance Committee
17:47staff for the report he is presenting today, because it is one of several reports he has
17:54done to expose how big pharma exploits the tax provisions of the 2017 Trump tax giveaway
18:02to magically make their profits from selling drugs here in the United States disappear.
18:10Somehow, all those profits made here disappear when it comes time to pay taxes.
18:17And that's how they miraculously reduce the amount of taxes they have to pay.
18:22And this report that Senator Wyden and his team put together shows how this round-tripping
18:30scheme is how they do it.
18:34Round-tripping meaning you make your revenues here in the United States at least 50 percent
18:38of the revenues in the case of Pfizer sales.
18:41But somehow, when it comes time to pay your taxes, you have taken those profits and filtered
18:47them through all sorts of overseas schemes and entities to reduce that tax liability
18:55dramatically.
18:57And what the report shows is that while 50 percent of Pfizer's revenues are generated
19:03here in the United States when it comes to booking its income for tax purposes, they
19:08show zero profit on their U.S. operations.
19:12And by playing that game, dramatically reduce their overall tax liability.
19:18This was facilitated by the 2017 Trump tax cuts, and it has allowed Pfizer to reduce
19:26its tax obligations by billions of dollars.
19:30Cut its taxes by a whopping 40 percent.
19:34A whopping 40 percent since that Trump tax cam was passed.
19:40And while big corporations win, everybody else loses.
19:46You know, American families, they can't use this round-tripping scheme.
19:53You can't somehow erase the taxes you owe on the earnings you make by running your earnings
20:01through various offshore schemes.
20:03Small businesses in America can't erase their American-based tax profits by using these
20:10round-tripping schemes.
20:12But the Donald Trump tax scam allows big corporations like Pfizer to do exactly that.
20:19And by doing that, they've reduced their overall effective tax in the pharmaceutical
20:25industry to about 11 percent, far less than the rates paid by most middle-class families
20:33in America.
20:35And when big pharma and big corporations shortchange America on the taxes they pay, they shortchange
20:41every citizen of this country.
20:44Because they're contributing less to modernize our infrastructure.
20:48Less for public schools.
20:50Less for our common defense.
20:53They become free riders on everybody else.
20:57So that's why we're here on the floor, to blow the whistle.
21:01And I will just close with this, Mr. President, I've said this before, but I'm going to say
21:07it again because we're heading toward our big debate here on this issue.
21:13And that's when on Inauguration Day, just down the hall here, President Trump was sworn
21:22in.
21:23He talked about a new golden age for America.
21:28Come to find out that when he's talking about a golden age, he's talking about a golden
21:33age for the people who were sitting right behind him on that platform when he was sworn
21:37in.
21:38Elon Musk and the billionaires.
21:41More billionaires in the Trump cabinet than any time in American history, by far.
21:48And so on the campaign trail, Donald Trump says he wants to go after the elites.
21:53On the campaign trail, he says, I'm going to look out for the forgotten Americans.
21:58Well, I'll tell you what, he has forgotten Americans unless they happen to be a big corporation
22:04or the head of a big corporation.
22:07And this is the big portrayal in action.
22:10And we are going to witness this big portrayal in action even more in the coming months here
22:17on the Senate floor if we don't stop it.
22:19And I want to thank Senator Wyden and his team for exposing exactly what will happen
22:25if we don't stop it.
22:27And I yield the floor.
22:28I thank my colleague, and once again, you can hear his expertise from the Ways and Means
22:33Committee and the other body on these issues, and I thank him for his leadership.
22:37And our new member of the Finance Committee, Senator Welch, is here and he'll have some
22:42remarks and then I'll wrap up.
22:44But Senator Welch, thank you for all your leadership.
22:46Senator from Delaware is recognized.
22:48Thank you, Mr. President.
22:49Thank you, Senator Wyden.
22:53Mr. President, when I talk to Vermonters, as I'm sure when you talk to Tennesseans,
23:01everyday hard-working people at the end of the month are struggling to pay their bills.
23:07It's expensive.
23:10And people are working really hard, but the cost of things is going up, taxes are eating
23:17into their paychecks, and they don't understand how it is they can work so hard.
23:23In many families, it's two people working, and they still can't pay their bills.
23:30And there's a suspicion among a lot of folks I talk to that there's something wrong and
23:37it's kind of a rigged situation.
23:41And what we're talking about today proves that the suspicion that Vermonters have about
23:49things being rigged, they're right.
23:54The second point I want to make at the outset is this issue, this specific example, provides
24:07such clarity that some of the worst things that cause the most suffering and the most
24:13economic insecurity are totally legal.
24:18Totally wrong, by the way, but legal.
24:25What did we find out with the Wyden Report?
24:29We found that a major United States pharmaceutical company was able to make sales of $20 billion
24:39of its product in 2019 and report zero in income, zero in profits here in this country.
24:56What that ultimately means is that what Pfizer paid on its taxes, for taxes, despite this
25:04extraordinary profit, they paid less than the mailroom clerk pays in Social Security.
25:14They paid less than the pharmacist at the drugstore who dispenses the prescriptions.
25:21They paid less than the delivery drivers who may have brought these prescriptions to a
25:26person's home.
25:28They paid less than the employees of Pfizer, whether it was a lab technician or a clerk
25:38or anyone at that company.
25:44Vermonters asked me, wait a minute, how is this, $20 billion in sales, extraordinarily
25:49profitable company, yet under the legal use of the tax code, they're able to report zero.
25:58Well, Mr. President, this is where, as much as I condemn Pfizer for manipulating and taking
26:08advantage of these legal loopholes, I say the United States Senate and the United States
26:14Congress bears enormous responsibility for allowing this legal loophole to be used.
26:22Pfizer, in every profitable company, should pay their fair share of taxes.
26:27That's all we're talking about.
26:29So when Vermonters, at the end of the month, are trying to look at how are they going to
26:33pay the bills that their checkbook balance won't cover and they think the system is rigged,
26:39they're right.
26:40And one of the ways for us to unrig it is to attack this legal use of the tax code that
26:49was passed by this Congress.
26:52Now, this is worse than just the tax code because other provisions have made Pfizer
27:02so profitable, courtesy of the taxpayer.
27:06One of their major drugs, Elquis, $791 million of taxpayer money was used in the research
27:14and development of it.
27:17Pfizer has that.
27:18It's been immensely profitable.
27:19And by the way, it's a good drug.
27:23It helps with strokes.
27:24But it's a wicked price.
27:26So here in the United States, if you're buying that drug, that costs $7,100.
27:36In Canada, it's $900.
27:38Japan, it's $940.
27:41In the United Kingdom, $760.
27:44In France, $650.
27:47So Vermonters asked me, wait a minute.
27:49Our taxpayer dollars went into helping Pfizer develop that drug, $791 million.
27:56And we have to pay six, seven, eight times here in the United States than Pfizer sells
28:02it in other countries that are our peers?
28:06They think that's wrong, and so do I.
28:10Then you think about the protection that this Congress gives to intellectual property, and
28:18rightly so, where that pricing power that goes along with getting a patent is so abused
28:25in this country that it inflicts enormous economic hardship on individuals who have
28:33to buy it directly, on taxpayers who fund it through Medicare and Medicaid, and on our
28:39employers who really care about their employees, and they want to provide employer-sponsored
28:45health care.
28:46So premiums keep going up and up and up because of the pharma prices, and it means the raises
28:52are flat.
28:54That's not right.
28:58And then you have the fact that for pharma, we've created, as we should, publicly financed
29:04health care, Medicare, Medicaid, and employer-sponsored.
29:08So you have a situation for the pharmaceutical industry, and we're talking specifically now
29:16about Pfizer, where they get a guaranteed market, Medicare, Medicaid, employer-sponsored.
29:22They get a patent and then abuse the pricing power that goes along with it and sticks it
29:26to Americans, despite the fact that it's American taxpayers who funded so much of the basic
29:33research that went into developing this product that they put on the market.
29:38And then they end up with a tax code, courtesy of the United States Congress, that allows
29:46them to do what no corner drugstore could ever do, basically say that the sales they
29:52made weren't really made at the corner in Burlington, Vermont.
29:59They were made at the corner in Singapore.
30:01Oh, and by the way, Pfizer worked out a deal with Singapore to get preferential tax treatment.
30:10And when they were asked what was that agreement, they had a nondisclosure agreement with Singapore
30:19to conceal from legitimate investigation about their tax liability what that deal was.
30:29So this is really shocking, but if any of us wonder why everyday folks who are showing
30:38up to do their job in all of the places of employment in your state and mine, and then
30:45at the end of the month, despite all their hard work, are having trouble paying their
30:49utility bill, and they just wonder, is this system rigged?
30:55They're right.
30:57And Exhibit A is what has been exposed in this report by the Senate Finance Committee
31:02and Senator Wyden.
31:03I yield back.
31:04Senator Welch, thank you for your leadership, and it's great to have you on the committee.
31:09To wrap up, Mr. President, our investigation has found that Pfizer has carried out what
31:15could be the largest tax-dodging scheme in the history of Big Pharma.
31:23This Big Pharma ripoff is exactly what Republican senators should be rooting out in their tax
31:31bill, which is coming up.
31:33Instead, it looks like Senate Republicans may lock this outrage in permanently.
31:41All Americans who believe in tax fairness should join us in fighting any extension of
31:49this tax boondoggle.
31:50Mr. President, I yield the floor, and I thank my colleagues.