HELENA — Gov. Brian Schweitzer, accusing pharmaceutical companies of not paying their fair share of taxes in the United States, said Wednesday he will propose a bill to “fairly” tax drug firms in Montana.
“Just because 49 states have failed to do it and just because the federal government and U.S. Congress appear as if they’re laying down on the job doesn’t mean that we will in Montana,” Schweitzer said.
He estimated that Montana could collect millions a year more in pharmaceutical company taxes under his proposal.
Schweitzer called it part of his “continued quest to raise revenue without raising taxes.”
With mixed success at the Legislature, Schweitzer and Bucks since 2005 have been seeking authority so the state can collect taxes from out-of-state companies and individuals they believe are skirting their taxes here.
“There are some companies that are very good at this,” Schweitzer said. “As near as I can tell they’re all pikers compared to the drug cartel. The drug cartel, big Pharma, they have for a decade or longer, curried friendships with members of Congress, created loopholes so that they could position themselves where they’re at today.”
The State Bureau was unable to reach Dennis Iverson, Montana lobbyist for Pharmaceutical Research & Manufacturers of America, for comment.
Schweitzer said pharmaceutical companies make 70 percent of their worldwide profits in the United States, but only pay 6 percent of their taxes in this country.
“They sell drugs in each one of our neighborhoods and then they use some little quirky lawyer in the Caribbean, the Grand Cayman Islands or Bermuda who is able to launder their money,” he said.
The money then is moved to European banks, particularly those in Ireland right now. He said Ireland has passed special laws that allow the companies to hide their money.
He said pharmaceutical companies often declare profits in foreign markets at much higher rates than in their American markets, despite drug prices being typically higher in this country than elsewhere. Drugs manufactured by foreign subsidiaries are sold to U.S. patients at “inflated prices to overstate profits overseas and understate profits here,” he said.
Schweitzer has targeted pharmaceutical companies in the past.
In 2000, Schweitzer made U.S. prescription drug prices a major issue in his unsuccessful race against Republican Sen. Conrad Burns. Schweitzer chartered buses to take seniors to Canada where they could get their prescription filled at far lower prices than in Montana.
HELENA — Gov. Brian Schweitzer says new laws are needed to collect taxes on income that he says big drug companies are hiding overseas.
Schweitzer says he will bring the proposal to the Legislature when it meets in 2011.
The move is the latest by Schweitzer to shed light on the pharmaceutical industry. He is highly critical of the prices drug companies charge in the United States, and the deals Congress has made with the companies.
Schweitzer says the drug industry has hidden from billions in federal and state taxes by shifting income earned in the United States to overseas locations.