Senate Finance Chair Wyden continues fight over low pharma tax rates, this time with BMS – Endpoints News

Senate Finance Chair Wyden continues fight over low pharma tax rates, this time with BMS – Endpoints News

Sen. Ron Wyden (D-OR) isn’t done dig­ging in­to the par­tic­u­lar­ly low tax rates for phar­ma com­pa­nies, and how their for­eign ops can low­er those bills.

In a three-page let­ter sent to Bris­tol My­ers Squibb CEO Gio­van­ni Caforio, Wyden sought more in­for­ma­tion on Bris­tol My­ers’ in­ter­na­tion­al tax prac­tices as the Sen­ate Fi­nance Com­mit­tee in­ves­ti­gates how phar­ma­ceu­ti­cal com­pa­nies who are based in the US can low­er its tax rates via “com­plex cross-bor­der tax avoid­ance strate­gies.”

The in­ves­ti­ga­tion, ac­cord­ing to the let­ter, has al­ready sent BMS ques­tions re­gard­ing its for­ma­tion of a for­eign part­ner­ship in Ire­land and the shift­ing of IP rights of drugs to that part­ner­ship. Wyden and the com­mit­tee are look­ing to un­der­stand whether the trans­ac­tion helped Bris­tol My­ers re­duce its tax li­a­bil­i­ty.

“Based on re­spons­es Bris­tol My­ers has pro­vid­ed the com­mit­tee through out­side coun­sel, it ap­pears this trans­ac­tion helped Bris­tol My­ers avoid pay­ing a sig­nif­i­cant amount of fed­er­al tax­es, which the IRS is seek­ing to col­lect,” the let­ter said.

The com­mit­tee is al­so look­ing for new in­for­ma­tion re­lat­ed to the “sub­stan­tial dis­crep­an­cy” be­tween where BMS gen­er­ates most of its pre­scrip­tion drug sales and where the phar­ma books the prof­its from those sales for tax pur­pos­es. Wyden’s let­ter is al­so look­ing to un­der­stand why the com­pa­ny paid a tax rate of 13% in 2021, far be­low the cor­po­rate tax rate of 21%.

“The Amer­i­can pub­lic de­serves a full un­der­stand­ing of the ex­tent to which U.S. phar­ma­ceu­ti­cal com­pa­nies may have tak­en ad­van­tage of weak­ness­es in in­ter­na­tion­al tax law, in­clud­ing the new pro­vi­sions of the 2017 Re­pub­li­can tax law, to re­duce tax­es on U.S. drug sales through the use of sub­sidiaries in low or ze­ro-tax ju­ris­dic­tions. In ad­vance of po­ten­tial pub­lic hear­ings and propos­ing new leg­isla­tive changes, it is crit­i­cal to un­der­stand how Bris­tol My­ers, a multi­na­tion­al cor­po­ra­tion with an­nu­al sales of $46 bil­lion, paid a low­er tax rate than a postal ser­vice work­er or a preschool teacher,” the let­ter em­pha­sized.

The chair al­so wants more in­for­ma­tion from Bris­tol My­ers, in­clud­ing a de­tailed coun­try-by-coun­try break­down of pre-tax earn­ings, prof­it mar­gins, em­ploy­ee head­count and tax paid for the tax years of 2018 through 2021.

The phar­ma will al­so need to pro­vide a de­tailed list of the en­ti­ties that own patents or trade­marks that have the right to sell a list of its drug prod­ucts, in­clud­ing Op­di­vo, Eliquis and Revlim­id, among many oth­ers, as well as a “de­tailed ex­pla­na­tion” as to how BMS’ ef­fec­tive tax rate de­clined to 13% in 2021. A re­sponse to these and sev­er­al oth­er points is re­quest­ed by Jan. 16.

In an email to End­points News, a BMS spokesper­son con­firmed that it has re­ceived the let­ter and is re­view­ing its con­tents.

“We will con­tin­ue to co­op­er­ate with the com­mit­tee chair­man on his ad­di­tion­al in­quiries and ap­pre­ci­ate the op­por­tu­ni­ty to re­spond to his let­ter,” the BMS spokesper­son replied to End­points.

BMS is not the on­ly phar­ma that Wyden has in his sights.

In De­cem­ber, the sen­a­tor asked CEO Bob Brad­way for more in­for­ma­tion on Am­gen’s fi­nan­cials and to ex­plain how it paid a low­er tax rate than the stan­dard cor­po­rate tax rate.

And in the sum­mer of last year, Wyden sent fol­low-up let­ters to both Mer­ck and Ab­bott af­ter both com­pa­nies failed to an­swer ques­tions and com­ply with his in­ves­ti­ga­tion in­to how a 2017 tax law helped slash tax rates for large, US-based phar­ma com­pa­nies by mov­ing prof­its off­shore.

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