No one can accuse Big Pharma of taxpayer naiveté. Many drugmakers use elaborate strategies to make sure as much of their profits as possible reside in tax-friendly locales. The ensuing problem, of course, is gaining access to that money for use in less tax-friendly locales. For example, the U.S., where repatriating cash comes with a 35 percent tax rate.
But as Bloomberg reports, drugmakers have managed to bring billions of dollars home over the past couple of years, tax-free. For example, Merck brought back more than $9 billion to help pay for its merger with Schering-Plough. In addition, the drug giant is appealing a federal court ruling against Schering-Plough for failing to pay tax on $690 million in repatriated funds. Pfizer brought in $30 billion from overseas for its Wyeth buyout, minimizing the tax hit. And Eli Lilly jumped through various hoops to bring back foreign cash after its ImClone Systems merger.
No one is saying these drugmakers owe more in taxes than they've paid, Bloomberg notes. But some experts think the practice--which isn't exclusive to Big Pharma--should somehow be curtailed. Read the story for details on how the companies moved their money around.
- check out the Bloomberg article
ALSO: Brazilian researchers say they've developed a method of producing a much less expensive version of Pfizer's blockbuster cholesterol-fighting drug Lipitor, known generically as atorvastatin. Report