Nearly 4 Million Floridians Are in Medicare Program; Pfizer Has Hiked Prices to Medicare on Seven Top Selling Drugs by 39% Over Two Years
WASHINGTON, D.C. –Pfizer—maker of Celebrex, Lipitor, Lyrica, and Viagra—is attempting to permanently dodge an estimated $35 billion of U.S. taxes it currently owes by merging with Allergan, a drug firm based in the tax haven of Ireland, according to a new Americans for Tax Fairness report released today. Pfizer will accomplish this by renouncing its American identity and largely changing its address to Ireland, as the combined company will still be primarily owned by Pfizer’s current shareholders and will continue to be directed and managed from New York.
In addition to dodging its fair share of taxes, Pfizer has also been aggressively raising prescription drug prices, thereby straining patients and our health care system and in some cases putting needed medications out of reach. Pfizer has routinely hiked the prices of dozens of prescription drugs at 10 times or more the rate of inflation each year since 2012. Moreover, seven of Pfizer’s top selling drugs had their prices hiked an average of 39% over two years—from 2013 to 2015—under the Medicare program, four times the prescription drug inflation rate.
The potential universe of people in Florida who are affected by Pfizer’s price gouging is substantial. In the Medicare program alone 3.8 million Floridians participate, including 2.7 million seniors with Medicare Part D prescription drug coverage. But as one of the world’s largest pharmaceutical companies and more profitable corporations, Pfizer sells its drugs to countless other Floridians not getting Medicare.
The report, “Pfizer: Price Gouger, Tax Dodger” is available here.
“By dodging taxes while boosting prescription drug prices, Pfizer squeezes American families and communities from two sides at once,” said Americans for Tax Fairness Executive Director Frank Clemente. “In the company’s biggest insult to America yet, Pfizer’s merger would allow it to go on enjoying all the benefits of being based here—everything from a publicly-educated workforce, to an excellent communications infrastructure, to a reliable patent system—without adequately paying to support them.”
The Obama Administration has the authority to take executive action and immediately close the loophole Pfizer intends to exploit by combining with an Irish tax-haven-based drug firm. Action by the President would remove the main tax benefit Pfizer hopes to gain by becoming an Irish company. Pfizer’s merger is not expected to be completed until the middle of 2016.
“Time and time again, Pfizer’s actions show it is only concerned with enriching its executives and stockholders, showing no regard for American consumers or taxpayers. The Obama Administration has an obligation to stop this bad actor from walking away from paying tens of billions of dollars in U.S. taxes as it heads out the door,” said Clemente.
Clemente added: “If Pfizer wants to be an Irish company to cut its taxes but still be based in America, then it should charge American patients the same much lower drug prices it charges Irish consumers. Pfizer charges 12 times as much on this side of the Atlantic under the Medicare program for the same seven top-selling drugs as it charges in Ireland.”
Some of the report’s other key findings:
Pfizer’s maneuver would be the culmination of many years of overseas tax avoidance that has reduced the company’s tax bill to a fraction of what it should be paying. Many of those tactics were detailed in ATF’s November 2015 report, Pfizer’s Tax Dodging Rx: Stash Profits Offshore.
Americans for Tax Fairness is a diverse coalition of 425 national and state endorsing organizations that collectively represent tens of millions of members. The organization was formed on the belief that the country needs comprehensive, progressive tax reform that results in greater revenue to meet our growing needs. ATF is playing a central role in Washington and in the states on federal tax-reform issues.