Gomez, Maloney, DeSaulnier Urges DOJ and Treasury to Examine Tax Benefits Claimed by Opioid Companies for $26 Billion Settlement
Washington, D.C. — Committee on Oversight and Reform Vice Chair Rep. Jimmy Gomez (CA-34), Committee on Oversight and Reform Chairwoman Carolyn B. Maloney (NY-12), and Committee Member Rep. Mark DeSaulnier (CA-11) sent a letter asking Attorney General Merrick Garland of the Department of Justice and Secretary Janet Yellen of the Department of Treasury to examine tax deductions four companies—Cardinal Health, McKesson Corporation, AmerisourceBergen, and Johnson & Johnson—are taking related to their $26 billion settlement for their role in fueling the opioid crisis in the United States. The Committee has also asked the Departments to scrutinize whether Cardinal Health is improperly taking advantage of a Coronavirus Aid, Relief, and Economic Security (CARES) Act tax provision meant to help companies struggling during the coronavirus pandemic.
“We are writing to share findings from our Committee’s examination of efforts by these companies to claim tax benefits for settlement expenses related to the companies’ role in this epidemic. The Committee’s investigation shows that four companies that contributed to an opioid crisis that has killed half a million Americans and continues to claim tens of thousands of lives every year may now be attempting to put taxpayers on the hook for billions of dollars in settlement costs. This would be an outrageous tax benefit to line the pockets of bad corporate actors. We request that you determine whether these tax maneuvers comply with the law, and we urge you to do everything in your power to ensure transparency and accountability for the companies and executives that fueled our country’s deadly opioid crisis,” wrote the Members.
All four companies have previously stated they are claiming tax deductions for their settlement expenses. These tax benefits total at least $4.6 billion, and could be even greater now that the $26 billion settlement has been finalized with thousands of states, localities, and Tribes that filed lawsuits alleging these companies flooded communities with prescription opioids.
In response to prior requests from the Committee, Cardinal Health confirmed that it would claim a $424 million tax benefit by taking advantage of a CARES Act tax provision and using accounting strategies to claim a 2020 loss for a settlement that was not finalized until this year. McKesson Corporation, AmerisourceBergen, and Johnson & Johnson confirmed they had no plans to claim CARES Act emergency tax relief in relation to their opioid settlement costs.
“More than 500,000 people in the United States have died from the opioid epidemic since 1999—and tens of thousands more die every year. Companies like Cardinal Health, McKesson Corporation, AmerisourceBergen, and Johnson & Johnson have exacerbated a public health crisis that has devastated families and communities across the country. They owe their victims real accountability, transparency, and restitution. The Committee remains deeply concerned that these companies will be allowed to claim billions in tax benefits resulting from great harm to the American people,” the Members added.
The Committee requested a briefing from the Departments on their findings related to any deduction these four companies may claim based on their opioid-related settlement expenses and whether Cardinal is improperly taking advantage of the CARES Act loss carryback provision.
Click here to read the letter to Attorney General Garland and Secretary Yellen.