Taxpayers On the Hook for ‘Big Pharma’ Opioid Settlements

In 2008, as the financial sector was melting down, the federal government spent between between $20 and $36 trillion on corporate bailouts.

After the 2008 financial crash, Congress granted “too-big-to-fail” Wall Street banks $700 billion, and the Federal Reserve committed between $16 and $29 trillion.

Lawmakers recently handed $4 trillion in pandemic relief to large corporations.

Yet the Republican party, which has had forty years to hone its rhetoric of blaming our economic woes on social safety nets–specifically Social Security, Medicare, Medicaid, and the Supplemental Nutrition Assistance Program (SNAP)–is once again screaming about debts and deficits.

Republicans have convinced large swaths of supporters and talking heads on Fox so-called News and OAN that by cutting off “welfare” to low-income, mostly minority, Americans, they are not hurting but helping by providing an incentive to work harder and stop relying on their government for “handouts.”

But when massive transnational corporations come to Congress hat in hand for financial assistance, otherwise known as corporate welfare, there isn’t a moment’s hesitation.

As myriad wealthy corporations buy back their stocks and compensate their shareholders, scores of their employees are paid such paltry wages and left no choice but to rely on government assistance to survive. This then qualifies the companies for federal reimbursement.

In other words, American taxpayers are incentivizing some of the nation’s largest and most profitable corporations including Walmart, McDonald’sDollar General, and Amazon–to keep workers poor so CEOs can take billions per year in handouts.

But if a company is responsible for people’s deaths?

Surely taxpayers aren’t on the hook for their legal fees, right?


Pharmaceutical giants Johnson & Johnson, McKesson, AmerisourceBergen, and Cardinal Health are planning on deducting roughly $4.6 billion from federal taxes to recoup $26 billion in lawsuit settlements from opioid-related deaths that take approximately 70,000 lives per year.

As Public Citizen president Robert Weissman explained in a statement on Friday:

 “The drug companies are settling with taxpayers (local government entities) and then demanding that taxpayers pay part of the cost (via a federal tax subsidy).”

Analyzing regulatory findings, The Washington Post reported:

 “As details of the blockbuster settlement were still being worked out, pharmaceutical giant Johnson & Johnson and the ‘big three’ drug distributors—McKesson, AmerisourceBergen, and Cardinal Health—all updated their financial projections to include large tax benefits stemming from the expected deal.”

Weissman added:

“[It is] beyond outrageous for the drug makers and distributors to take a tax deduction for their settlement of city and county claims relating to the drug companies’ alleged role in creating and worsening the opioid addiction epidemic.

“Making this scheme even more infuriating is that the opioid manufacturer and distributor companies are preparing to claim billions in tax subsidies via a Covid-19 relief provision.”

Is this even legal?

The Post explained:

“U.S. tax laws generally restrict companies from deducting the cost of legal settlements from their taxes, with one major exception: Damages paid to victims as restitution for the misdeeds can usually be deducted.”

Even though Congress limited these types of deductions in recent years, and some tax experts argue the Internal Revenue Service (IRS) can challenge companies’ efforts to deduct opioid settlement costs, “Big Pharma” might come out on top again thanks to the CARES Act, which “opened up billions of dollars in tax breaks to companies regardless of pandemic suffering.”

All four drug manufacturers, of course, deny wrongdoing or legal accountability.

Robert Weissman said:

“While tens of millions of Americans are experiencing extreme economic hardship and dealing with intermittent and often inadequate governmental support for unemployment, food, housing, and small business continuity. Johnson & Johnson, McKesson, Cardinal Health, and Amerisource-Bergen are laughing all the way to bank.”

Compare this to factories dumping industrial waste in rivers and streams and expecting taxpayers to pay to clean it up.

A Government Accountability Office (GAO) study Vt. Sen. Bernie Sanders commissioned revealed about 5.7 million Medicaid enrollees’ and 4.7 million SNAP recipients’ wages were so low they qualified for federal benefits despite being employed full-time for 50 weeks or more in 2018.

Approximately 12 million wage-earning Medicaid-recipient adults and 9 million wage-earning adults living in households relying on SNAP benefits were employed in some capacity in 2018.

As Dr. Martin Luther Kind Jr. said in 1968:

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Ted Millar is writer and teacher. His work has been featured in myriad literary journals, including Better Than Starbucks, The Broke Bohemian, Straight Forward Poetry, Caesura, Circle Show, Cactus Heart, Third Wednesday, and The Voices Project. He is also a contributor to The Left Place blog on Substack, and Medium.