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BUSINESS A25
Friday 26 February 2016
Tax group blasts Pfizer, urges stop to its tax-cutting deal
LINDA A. JOHNSON This photo shows the Pfizer logo on display at the company’s mention the deal’s impact ly expired or will soon. It’s
AP Business Writer world headquarters in New York. A consumer group is accusing on U.S. jobs. But it discuss- standard procedure for
A consumer group is ac- drugmaker Pfizer of seeking to avoid $35 billion in U.S. taxes with es Pfizer’s impact on U.S. Pfizer and most other drug-
cusing Pfizer of seeking to its plan to buy fellow drugmaker Allergan in a deal structured to patients and taxpayers in makers to jack up the price
avoid $35 billion in U.S. tax- nominally move Pfizer’s address to lower-tax Ireland, Allergan’s depth. of their drugs at that point,
es with its plan to buy fel- home. It says that in recent years, to make as much money
low drugmaker Allergan in Pfizer has repeatedly raised as possible before cheaper
a deal structured to nomi- (AP Photo/Mark Lennihan) prices of its top-selling drugs, generic versions flood the
nally move Pfizer’s address including erectile dysfunc- market and grab most of
to lower-tax Ireland, Aller- er’s U.S. tax rate, on aver- “The proposed combina- tion pill Viagra, pain treat- the sales. The report notes
gan’s home. age, to 6.4 percent. That’s tion of Pfizer and Allergan ments Lyrica and Celebrex Pfizer benefits from an edu-
In a report released Thurs- well below the 24 percent will create a global, R&D- and antibiotic Zyvox. Pfizer cated U.S. workforce and
day, Americans for Taxpay- Pfizer has claimed. focused company with the raised prices on those and infrastructure here, and
er Fairness says that would At a news conference in ability to lead in the quest three other drugs by an av- makes about 5 percent of
also slash future U.S. taxes Washington, the group to find cures and treat- erage of 39.2 percent from its U.S. sales to the federal
paid by Pfizer Inc., which and several members of ments for patients with the 2013 through 2015 — 23 government, about $1.01
will keep its operational Congress said the fed- most feared diseases and times overall inflation dur- billion a year on average
headquarters at its New eral government can and conditions of our time, such ing that period — and this from 2011 through 2014.
York City base. Pfizer would should block Pfizer’s $160 as Alzheimer’s disease, Par- year raised prices on about The report also states that
still have to pay U.S. taxes billion acquisition of Al- kinson’s disease, cancer 60 drugs by more than 10 Pfizer gets tax credits av-
on income earned in the lergan. Pfizer, the world’s and rare genetic disorders. percent on average, ac- eraging $118.1 million a
country, but not overseas. second-biggest drugmaker “This transaction is not cording to the report. year by writing off part of its
The group has been urging by revenue, says the deal structured to move jobs out The tax group states that costs for research and for
federal regulation changes is set to be completed by of the United States, where patients in Ireland pay manufacturing done within
to block not just the Pfizer December. we conduct the majority of about one-twelfth what the U.S. It also claims Pfizer
deal, but a surge of other In a statement to The As- our research,” Pfizer wrote. Americans do for Pfizer’s got tax breaks averag-
companies in various in- sociated Press, Pfizer said, The 28-page report doesn’t seven top drugs. That’s be- ing $7 million a year from
dustries doing inversions cause Ireland and virtually 2011 through 2014 due to
to slash their U.S. tax bills. every country except the a loophole that allows it to
That lost revenue ultimately U.S. sets limits on drug pric- deduct excess compensa-
comes out of the pockets es, which are unregulated tion given to top executives
of consumers and other here. The group suggests in the form of stock options
taxpayers. Pfizer should cut its drug tied to their performance.
Americans for Taxpayer prices in the U.S. to what it The report is the second
Fairness also accuses Pfizer charges in Ireland, which one Americans for Tax-
of gouging Americans with isn’t likely to happen. payer Fairness has issued
frequent and excessive Most of those seven drugs since November criticizing
price hikes on its medicines have patents that recent- Pfizer’s planned inversion.
while benefiting from mul-
tiple loopholes and tax de-
ductions that reduce Pfiz-
Japan’s Sharp accepts takeover, Foxconn balks
YURI KAGEYAMA iPhones. country losing technology
AP Business Writer Sharp chose Foxconn as its to foreign interests.
TOKYO (AP) — Sharp Corp. preferred partner in a two- Media reports in Japan
announced Thursday it will day board meeting end- that a deal might be immi-
accept a 489 billion yen ing Thursday, and said Fox- nent had sent Sharp share
($4.4 billion) takeover by conn would gain a 66 per- prices initially higher on the
Taiwan’s Hon Hai Precision cent stake in the company Tokyo Stock Exchange, but
Industry Co., also known as under the deal. they finished 14 percent
Foxconn, but Foxconn said Sharp spokeswoman Nali Li lower after details of the
it was not ready to sign the said the company had no deal leaked. Sharp made
deal. official comment on the the announcement after
“We will have to postpone statement from Foxconn. trading ended.
any signing of a definitive It was unclear whether Osaka-based Sharp has
agreement until we have Foxconn was question- long been a prized brand
arrived at a satisfactory un- ing the content of Sharp’s in Japan, beginning with its
derstanding and resolution announcement, or just re- sale of mechanical pencils,
of the situation,” Foxconn questing more time to look still known as “sharp pen-
Technology Group said in a at details. cils” here. It also pioneered
statement. Sharp had been consider- hand-held electronic de-
It did not elaborate. If the ing both Foxconn’s bid and vices.
deal goes through, Sharp an offer from a Japanese Sharp had its beginnings as
would become the first ma- government-backed con- a Tokyo-based metalwork-
jor Japanese electronics sortium of Japanese inves- ing shop in 1912. It later
maker to be acquired by a tors. made its fame with Aquos
foreign company. Despite Japan’s rapid glo- flat-panel TVs and nifty
Foxconn is a major con- balization, some have ex- Internet-connecting cell-
tractor to Apple Inc., as- pressed fears a Foxconn phones, long before the ar-
sembling products such as takeover will result in the rival of iPhones in Japan.
