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Noah Y. Kim
By Noah Y. Kim August 25, 2020

Misleading ad in Montana Senate race casts Steve Daines as soft on drug companies

If Your Time is short

• Daines voted for major tax legislation that lowered taxes on corporations and many individuals. It did not specifically benefit drug makers. 

• As a senator, Daines has voted for bills that seek to reduce prescription drug prices.

Money is pouring into Montana as outside groups seek to influence the U.S. Senate race between Democratic Gov. Steve Bullock and Republican Sen. Steve Daines. One of these groups on the Democratic side skewers Daines in a Facebook ad for being generous to Big Pharma. 

"Daines voted to give billions in tax breaks to big drug companies even as they raised prices," the ad claims.

The ad was made by Duty and Honor, a nonprofit affiliated with the Democratic-backed Senate Majority PAC. To maintain its nonprofit status, Duty and Honor can’t endorse a particular candidate. But in running ads harshly critical of Daines, it’s clearly trying to hurt his re-election chances. 

The ad gives a misleading impression that Daines voted for a tax break tailored to big drug companies. The ad’s fine print gives us a clue about what Daines really voted for: the Republican-backed tax law signed by President Donald Trump.  

The Tax Cuts and Jobs Act of 2017 made the largest single reduction in the corporate tax rate in U.S. history. It lowered taxes on corporations, small businesses, and most Americans. The law also reduced taxes on overseas profits, and it allowed overseas profits from earlier years to be repatriated after a one-time charge. 

Daines joined Republican senators in voting for the final version of the tax plan. No Senate Democrats supported it.

The ad doesn’t mention the benefits of the law for small businesses and the average taxpayer. At the same time, the bill did give "big drug companies" billions of dollars in tax breaks. 

Pharmaceutical companies profited from the drop in the overall corporate tax rate. And since 10 of the top 30 companies with the biggest offshore holdings are biopharma companies, they also benefited disproportionately from the favorable treatment of repatriated overseas profits.

Biopharma Dive, a business journalism outlet, reviewed regulatory filings of the 11 biggest drugmakers and found that the tax law shrunk their payments by nearly $4 billion.

Featured Fact-check

Daines’ votes on prescription drug prices

The ad claims that Daines helped the drugmakers while they were raising prices. 

"In general, companies have continued to raise list prices for brand name drugs faster than inflation," Stacie Dusetzina, associate professor of health policy at Vanderbilt, told PolitiFact. However, this does not necessarily mean that prices have gone up. Drug prices fluctuate based on availability and the types of rebates pharmacy benefits managers negotiate. 

On average, list prices — the cost that wholesalers pay to manufacturers — went up 7% in 2018. Prices after rebates and discounts (net prices) went up 2.1% that year. The numbers indicate that prescription drug prices increased overall the year the tax cuts passed.

The ad also doesn’t mention that Daines supports legislation aiming to reduce the price of prescription drugs. In 2019, Daines voted in committee for the bipartisan Prescription Drug Pricing Reduction Act, which seeks to drive down drug prices through rebates.

In an email interview, Duty and Honor spokesperson Matt Corridoni acknowledged that Daines has voted to lower drug prices, but noted that he "voted against multiple amendments in committee that would have made the legislation stronger in terms of going after the drug companies on pricing."

The Daines campaign didn’t respond to our request for comment. 

Our ruling

The ad claims Daines "voted to give billions in tax breaks to big drug companies even as they raised prices."

Daines voted for the Tax Cuts and Jobs Act, which lowered tax rates and provided billions in tax relief to powerful drug companies. The missing context from the ad is that the law did not single out those companies in particular. Rather, it reduced taxes for the vast majority of Americans, small businesses, and the corporate sector.

We rate this claim Half True.

Our Sources

Facebook video by Duty and Honor, Aug. 7, 2020

Biopharma Dive, "Biopharma happily takes the tax cuts, but the jobs are harder to find," May 9, 2019

Congress.gov, "All Information (Except Text) for S.2543 - Prescription Drug Pricing Reduction Act of 2019," 2019

Credit Suisse, "U.S. biopharma tax analysis," Nov. 29, 2017

IQVIA, "Medicine use and spending in the U.S.," May 9, 2019

IQVIA, "Medicine spending and affordability in the United States," August 2020

Steve Daines, Sen. for Montana, Press Release, "Daines votes for major prescription drug pricing reform to lower costs for Montanans, save taxpayers billions," July 25, 2019

U.S. Senate, "H.R. 1, Vote #323," Dec. 2, 2017

Wall Street Journal, "Drugmakers raise prices on hundreds of medicines," Jan. 1, 2019

Washington Post, "The final GOP tax bill is complete. Here’s what is in it," Dec. 15, 2017

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Misleading ad in Montana Senate race casts Steve Daines as soft on drug companies

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