The US Senate Finance Committee Chair Ron Wyden announced that he is expanding the ongoing investigation into the tax practices of multinational pharmaceutical companies with a new letter sent to the CEO of Pfizer on Monday, 20 May, 2024.

An analysis by the Finance Committee of Pfizer’s SEC filings found that the company’s effective tax rate fell by 75%  following the passage of the Trump tax law in 2017.

“While the exact methods by which Pfizer is able to pay such low tax rates are unclear, public records indicate that Pfizer books most of its earnings offshore and benefits from changes made by the Republican tax law that lowered tax rates on foreign profits of US corporations. As a result of these arrangements, there is a substantial discrepancy between where Pfizer generates prescription drug sales and where Pfizer books earnings from those drug sales for tax purposes,” Wyden wrote to Pfizer CEO Dr. Albert Bourla.

“In 2014 and 2015 Pfizer paid effective tax rates of 25% and 22% respectively, but paid a paltry rate of just 5.4% in 2019 and 2020. Based on this analysis, the 2017 Republican tax law was likely a major contributor to Pfizer’s effective tax rate being slashed by over 75%. The American public deserves to understand how Pfizer, a multinational pharmaceutical corporation based in the US with annual sales of at least USD 58 billion, paid a lower tax rate than a preschool teacher or a firefighter,” he added.

Wyden began his investigation of Big Pharma’s tax practices in 2021. In 2022, he released an interim report detailing how the pharmaceutical giant AbbVie used offshore subsidiaries to avoid paying billions of dollars in taxes on prescription drug sales.

He released updated findings last year that included a JCT sector-wide analysis and information gathered in further investigations of four additional pharma giants: Abbott Laboratories, Amgen, Bristol Myers Squibb and Merck.