US Senate Finance Committee Chair Ron Wyden (D-OR), in a release, on 3 October 2024 announced that Pfizer is the sole company unwilling to cooperate with the Finance Committee’s investigation into how major pharmaceutical firms utilise offshore tax havens to evade taxes.
One of six Big Pharma companies whose tax records the committee has sought in the course of the investigation, Pfizer is the only company that has refused to comply.
In a letter Senator Wyden wrote, “Pfizer’s refusal to cooperate with the Committee’s investigation has only heightened my concern that the company may have used profit-shifting techniques to avoid paying billions of dollars in taxes on US prescription drug sales.”
“…Pfizer is the only company that has refused to provide the Committee information concerning how much income is reported by offshore subsidiaries, the structure of its operations in low or zero tax jurisdictions, and where profits and economic rights for blockbuster drugs are located. The Committee’s request for this information is well within its jurisdiction and is critical to help finalise the Committee’s investigation, which is intended to inform the drafting of legislation to reform the international tax system.”
Senator Wyden expanded his pharma tax investigation, which began in 2021, with a letter to Pfizer earlier this year, including questions similar to those posed to five other Big Pharma companies. In its response, Pfizer wrote the following:
“Pfizer understands the Committee’s request for information on the tax relationship between the Company and the governments of Puerto Rico and Singapore; however, the requests implicate confidential arrangements between Pfizer and each jurisdiction. Just as we are concerned about maintaining positive engagement with the Committee, we are also concerned about maintaining positive relationships with the US states and territories in which we operate, including Puerto Rico. Similarly, Pfizer looks to remain a strong US company in a highly competitive global industry, which often requires negotiations with the foreign jurisdictions in which we operate, such as Singapore. To those ends, it is important that the confidential nature of Pfizer’s tax incentive arrangements with the governments of Puerto Rico and Singapore are protected.”
In his new letter, Senator Wyden responded: “While I appreciate Pfizer’s desire to maintain good business relationships, this is not grounds to keep the United States Congress in the dark regarding sweetheart tax benefits in foreign tax jurisdictions. As the committee of jurisdiction for all federal taxation, the Committee has a responsibility to understand how large American companies are using subsidiaries in a US territory to avoid paying corporate income taxes on prescription drug sales made in US states. The Committee’s responsibility to develop and draft effective tax legislation necessitates fully understanding the tax avoidance practices of large multinational corporations. If these corporations are exploiting foreign tax incentives, and/or those laws are designed to capture corporate tax revenue from large American drug companies that should instead be going to the federal treasury, Pfizer is stymying the role of Congress to prevent such abuses by withholding this essential information.”
