Pfizer Develops a Cure for Taxes
Viagra, Lipitor, Celebrex, Zoloft and even good old Preparation H are as American as cheeseburgers. So is Pfizer, which makes these ubiquitous remedies. But the New York-based pharmaceutical giant is reportedly brewing plans to skip the country, via a $106 billion bid for London-based drug maker AstraZeneca. AstraZeneca rejected the bid on Friday, but that's probably not the end of this dance.
Even if it is, what's important here is Pfizer's objective: to merge the two concerns into a holding company with a U.K. tax domicile, allowing it to avoid millions of dollars in U.S. taxes. Blame our dysfunctional tax code, which hasn't kept pace with globalization. Why should Pfizer pay higher taxes in America when it can pay lower taxes in Great Britain?
Never mind that Pfizer has been gouging America for decades. Not only do Americans pay more for drugs than anyone else in the world, but much of that exorbitant cost is borne by the same federal government that Pfizer would like to artfully tax-dodge. Pfizer noted its utter dependence on government programs in its latest annual report, filed with regulators. "Any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs…could have an adverse impact on our results of operations," Pfizer said.
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Pfizer has grown fat on Medicare Part D, the most socialist program ever launched by Republicans. President George W. Bush signed this unwieldy piece of corporate welfare 10 years ago to pay for prescription drugs for seniors. It was unfunded and included no cost-containment provision. We are going deep into debt to pay for it. And who gets to profit? Pfizer and its competitors. And you know who else? Walgreens. Walgreen Co. is considering a move to Switzerland after buying a stake in Swiss pharmacy company Alliance Boots GMBH. Yes, your corner drugstore would like to take your copay, bill your Medicare policy and then pay its taxes in Switzerland.
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Keep that Medicare Part D flowing while the Big Pharma tax base keeps going. Michigan's Perrigo, Pennsylvania's Endo Health Solutions and New Jersey's Actavis moved headquarters to Ireland last year following mergers. Connecticut's Alexion Pharmaceuticals moved some of its intellectual property there, too, to cut taxes. It's a sickness that's going around. It is eating away at America. And none of these companies seem very interested in a cure.
http://online.wsj.com/news/articles/SB10001424052702304677904579535741509585988
By Al Louis
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