Drug Companies Might Use Tax Benefits In Opioid Settlement

Drug Companies Might Use Tax Benefits In Opioid Settlement

Introduction

The four U.S. drug companies involved in the $26 billion national opioid settlement might use certain tax benefits for their settlement expenses.

Cardinal Health, McKesson Corporation, AmerisourceBergen, and Johnson & Johnson are the companies that have promised to pay $26 billion to compensate for their alleged role in the opioid crisis across the U.S.

The House Oversight and Reform Committee has informed about the proceedings as last March the Oversight leaders questioned the companies on their plans to use tax provision in the Coronavirus Aid, Relief and Economic Security (CARES) Act. The committee is mainly concerned that the companies will get billions as tax benefits after harming the American people.

It has even asked the Departments of Justice and Treasury to keep a close look if Cardinal Health is taking illicit advantage of the CARES Act’s loss carryback provision. As per the provision, the company can carry back net losses from 2017 to 2021 to any of the five taxable years foregoing the taxable year in which it faced loss.

The committee showed the concern citing Cardinal Health's last year's response when it mentioned the usage of the provision. On the other hand, J&J and McKesson showed no intentions to use the provision to deal with the opioid litigations.

Since 1999 more than 500,000 people have died from the opioid epidemic. Last year alone the country recorded 100,000 deaths due to drug overdose.