Pfizer: We’re aren’t paying no stinking taxes

You would think the drug company that made the best selling drug in the world—Lipitor—and the blockbuster Viagra would appreciate the country and patients who have been so good to it. You’d be wrong.

Last November, Pfizer announced a proposed merger with Dublin-based Allergan the maker of the $2 billion plus a year drug Botox—a deal valued at $160 billion—to dodge US taxes. The deal, expected to go through because it circumvents the new Treasury proposals to stop such tax dodges, has been condemned from both sides of the aisle—Hillary Clinton and Donald Trump.

It’s only been a year since the Treasury Department drafted new proposals to stop Big Pharma from enacting brazen tax evasion or “tax inversions”—reincorporating in countries like Britain, Ireland or the Netherlands to duck US taxes, often merging with a European entity.

Before the new Treasury Department proposals, Illinois-based AbbVie sought to merge with ADHD drug maker Shire, based on a small island in the English Channel, in a deal that would have made it bigger than Boeing or McDonald’s. Illinois-based Walgreens, the US’s largest pharmacy chain, also sought a tax inversion but changed its mind when customers and lawmakers called the maneuver unpatriotic and unfair to corporations remaining in the US. And Pfizer tried to dodge taxes in 2014 by merging with British drug company AstraZeneca, who declined. Still, scandal-ridden device maker Medtronic has succeeded in such a tax inversion, moving its headquarters to Ireland by acquiring Dublin-based Covidien PLC and reducing the tax it pays on profits earned overseas from 35 to 5 percent. Nice tax rate if you can get it.

Meanwhile, Pfizer has kept $74 billion overseas to dodge taxes, says the New York Times and calls taxes “it never even paid” are too high.

Repeat offender

To say Pfizer has been accused of wrongdoing in the past is like saying BP had an oil spill. Even as Pfizer was under a 5-year Corporate Integrity Agreement (CIA) with HHS for withholding $20 million in Lipitor rebates owed to Medicaid in 2002, it was marketing Neurontin for off-label indications which earned it a second CIA in 2004. And even as it entered into the second CIA, it was marketing Lyrica and other meds for off-label indications which earned it a third CIA! Does anyone notice that CIAs are . . . not a deterrent?

When it comes to corruption and scandals, Pfizer seems to court trouble. It bought Warner-Lambert in 2000 knowing the company’s marketing practices were under criminal investigation and its Rezulin had been withdrawn. Then it bought hormone maker Wyeth knowing it had a thicket of Fen-Phen heart valve suits and Prempro cancer suits. Pfizer admits spying on medical students who were protesting against Big Pharma’s influence on medical education!

During one week in June of 2010, Pfizer:

1) Agreed to pull its 10-year-old leukemia drug Mylotarg from the market because it caused more not less patient deaths;

2) suspended pediatric trials of Geodon two months after the FDA said children were being overdosed in the trials;

3) SUSpended trials of tanezumab, an osteoarthritis pain drug, because patients got worse not better, some needing joint replacements;

4) was investigated by the House for off-label marketing of the kidney transplant drug Rapamune and targeting African-Americans;

5) witnessed its client researcher, Scott S Reuben, MD, who put Bextra, Celebrex and Lyrica on the map, trotted off to prison for research fraud;

6) was sued by Blue Cross Blue Shield to recoup money it overpaid for Bextra and other drugs;

7) received a letter from Sen. Charles Grassley (R-Iowa) requesting its whistleblower policy;

and

had its appeal to end lawsuits by Nigerian families who accused it of illegal trials of the antibiotic Trovan in which 11 children died, rejected by the Supreme Court

Too big to fail

In the sentencing memo related to Pfizer’s third CIA, the Department of Justice wrote that “illegal conduct was pervasive throughout the company and stemmed from messages created at high levels within the national marketing team.” Employees, it wrote “including district managers, explained that they did not question their supervisors about the illegal conduct that they were being instructed to carry out, because to do so would be considered a ‘CLM’ or ‘Career Limiting Move.’“

Yet, when I asked industry analysts why the company is not shut down, blocked from tax supported programs like Medicare that enrich it and/or its officers tried and jailed, Peter Rost, MD, author of The Whistleblower: Confessions of a Healthcare Hitman, told me “So many Medicaid, Medicare and VA drugs come from Pfizer, the government would never convict them. It would stop the drug flow.”

Jim Edwards, former managing editor of Adweek, agreed. “Pfizer is the largest drug company in the world and if you include its generics unit it makes literally hundreds of different drugs. Getting tough would mean no Lipitor, no Viagra, no Bacitracin, no Cipro, no Zithromax, no Sutent, et cetera,” he told me. “The government is not really in a position to be cutting itself off from all that medicine.”

Pfizer is too big to fail or be regulated and so, apparently, is its tax dodge. But the tax evasion is not all bad news. Pfizer CEO Ian C. Read told lawmakers and administration officials recently that Pfizer’s lower tax bill will give it more cash to invest in the US and add jobs!

Martha Rosenberg is a freelance journalist and the author of the highly acclaimed “Born With A Junk Food Deficiency: How Flaks, Quacks and Hacks Pimp The Public Health,” published by Prometheus Books. Check her Facebook page.