US Uncut Lies about Big Pharma “Subsidies”

The original article was posted by US Uncut founder Carl Gibson. In the article and the covered meme, he implies that taxpayers subsidize big pharma as they do Planned Parenthood – but with a much larger bill. A little more investigating into his sources proves that this is an outright lie.

First of all, let’s not downplay corporate welfare. No private entity should receive special treatment by the government – whether for profit or not, whether direct subsidies or regulatory favoritism. I don’t want my tax dollars doing to PP just as I don’t want them going to big pharma, and I don’t want the government picking economic winners.

So how does he reach his claim? Economist Dean Baker from the Center for Economic and Policy Research estimated that government patents raise the price of drugs by $270 billion per year above their free market price.

This is the exact source cited in Gibson’s article. In fact, Baker’s entire argument is that government intervention into industry has destabilized these industries and their price structures; thus conservatives should not support such intervention if they believe in limited government. It has NOTHING to do with direct cash subsidies to big pharma.

Gibson takes this number, divides it by the number of federal tax returns, and concludes that it costs the average taxpaying household “$1,914 each year to subsidize Big Pharma”.

A subsidy is a direct cash payment from the government to a non-government entity. Planned Parenthood receives a cash subsidy. NFL teams receive subsidies.

Government patent protection, which is the antithesis of a free market, does not come without costs, but it is NOT a subsidy. Big Pharma does NOT receive $1,914 from the average taxpaying household every year.

If anything, the cited source makes the case against government intervention in favor of free markets and deregulation. This is nothing more than a manipulation of words to suit a political narrative while ignoring the bigger issue.


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