More than a Matter of Appearances
Summary
In the absence of tax reform, we undertook a proposed merger with Allergan PLC in good faith and after intense study and review of current laws.In his blog Matt Herper, a thoughtful observer of the industry, headlined the PfizerGan transaction as “Pharma’s Tax Dodge” and quoted the president saying for American corporations “to continue to benefit from that entire architecture [of the American economy] that helps you thrive, but move your technical address simply to avoid paying taxes, is neither fair, nor is it something that’s going to be good for the country over the long term.” Bad enough that we are ruthless profiteers denying life-saving drugs to desperate patients.Since the companies are allowed to accumulate dollars overseas if they plan to deploy the money there, they legally pay no U.S taxes until they bring it home.More likely—and more insidious—the government would make small changes, creating regulations and market controls that slowly erode incentives and sap the industry’s vitality.In a recent blog post Bernard Munos drew a distinction between pharma CEOs as transformers and builders and observed that the industry needed the bold vision of the former but had an oversupply of the latter.