A report released Thursday by a liberal-leaning group and several House Democrats attacks pharmaceutical giant Pfizer for dodging taxes while raising prescription drug prices.
Pfizer announced in November that it would merge with Ireland-based Allergan in what is viewed as the largest corporate tax inversion to date. The merged company would have an Irish legal residence, which would allow Pfizer to lower its tax burden. But the combined company would continue to be managed in the United States.
{mosads}The report from Americans for Tax Fairness (ATF) found that by merging with Allergan, Pfizer may be able to avoid paying an estimated $35 billion in taxes on profits held offshore. That money could fund the National Cancer Institute for nearly seven years.
Additionally, Pfizer drugs cost as much as 12 times more under Medicare than they do in Ireland, according to the report.
“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,” ATF said.
Reps. Lloyd Doggett (D-Texas), Peter Welch (D-Vt.) and Rosa DeLauro (D-Conn.) were among the members of Congress on hand to release the report.
“It’s time for our government to say ‘enough is enough and stop cheating the American people,’” DeLauro said. “We cannot continue to allow Pfizer and other corporations to protect their American companies. They reap the benefits that this country has to offer, while they claim to be another nationality when their tax bill arrives.”
The lawmakers sent a letter to Treasury Secretary Jack Lew on Thursday, urging the department to take further action to curb the tax benefits of inversions.
Treasury has already issued two rounds of guidance aimed at slowing the pace of inversions, but the transactions have persisted. And it will be difficult for Congress to pass legislation this year, the lawmakers said.
“We simply cannot wait, and your action can put a stop to this trend until a new Congress can act,” the letter said.
A group of Senate Democrats, including Dick Durbin of Illinois and Elizabeth Warren of Massachusetts, sent Lew a similar letter Thursday.
“If a company benefits from the United States and all that it has to offer, it should pay its fair share of taxes here at home,” the Senate Democrats’ letter said.