Senate Finance Chair Ron Wyden (D-OR) is pressing Pfizer over its tax practices as part of his investigation into how large pharma companies use subsidiaries in other countries to skirt US corporate taxes.
The six-page letter sent to Pfizer CEO Albert Bourla Monday points to IRS filings from the past several years showing that the company has a far lower effective tax rate than the US corporate rate of 21%. In his letter, he pushed the company to provide a long list of details about where and how it makes its profits, and how it uses tax jurisdictions around the world.
“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 U.S. corporations,” Wyden wrote.
In the letter, Wyden underscores that despite Pfizer doing the bulk of its business in the United States between 2018 and 2023, a 2017 tax law that went into effect during the Trump administration allows for subsidiaries of Pfizer based in other countries to be taxed at the Global Intangible Low-Tax Income rate of 10.5%.
A Pfizer spokesperson told Endpoints News that it had received Wyden’s letter but wouldn’t comment before responding directly to the senator.
Drug companies and many other multinational businesses have for many years used creative methods to minimize their US tax burden. Often, those tactics involve domiciling valuable assets overseas in ways that allow them to claim profits are generated outside the US, even when the companies have most of their operations and sales inside the country. As part of his probe, Wyden has dug into tax practices at several other big pharmas in the past year, including Bristol Myers Squibb, AbbVie, Merck, Amgen, Johnson & Johnson, and Abbott.
Wyden gave Pfizer until June 17 to respond to a slate of questions about its tax practices, including a country-by-country breakdown of its pre-tax earnings, profit margins, employee headcount and taxes paid. He also asked for Pfizer’s taxable income between 2018 and 2023, as well as the company’s taxable income each year, excluding income from foreign-controlled corporations.
Wyden further requested a detailed list of all intellectual property rights that Pfizer holds for a host of its products, including its Covid-19 vaccine Comirnaty, and the drugs Paxlovid and Eliquis. He also asked for more details about Pfizer’s tax practices in Puerto Rico, Singapore and Ireland, jurisdictions that he said offer significant tax incentives for the company.