Blumenthal says Pfizer merger should face scrutiny

Regulators need to see if antitrust laws would prevent deal, he says

Norwich — U.S. Sen. Richard Blumenthal said Tuesday he was disappointed by Pfizer Inc.’s plans to use a so-called inversion loophole to dodge billions of dollars in U.S. taxes and said such corporate tactics need to be examined “closely and completely.”

Blumenthal, in the city visiting a local health center, called Pfizer’s $160 billion merger with Irish drugmaker Allergan “unprecedented in size and scope,” saying U.S. regulators should look into whether antitrust laws could prevent the sale.

Blumenthal joined a chorus of lawmakers decrying the announcement by Pfizer Monday that it would be reconstituting itself as an Irish company to take advantage of lighter taxes overseas. The new company will be known as Pfizer plc, though officially Allergan is buying Pfizer rather than the other way around.

“Pfizer built their business on the back of our research and development tax incentives, our federally supported medical research, our skilled workforce, and our infrastructure — all funded by honest, hardworking Americans who pay their taxes,” U.S. Rep. Rosa DeLauro, D-3rd District, said in a statement. “We cannot continue to allow Pfizer and other corporations to pretend that they are American while reaping the benefits this country has to offer, yet claiming to be another nationality when the tax bill comes.”

DeLauro said Congress needs to pass the No Federal Contracts for Corporate Deserters Act to prevent Pfizer and other companies that use the inversion loophole from winning federal contracts over U.S. companies. She pointed out that Pfizer paid no federal income taxes between 2010 and 2012, using tax credits to its advantage while also reaping $3.4

billion in federal contracts and $2.2 billion in tax refunds.

The American political columnist Robert Reich went so far as to suggest that Pfizer’s move should make the company ineligible for access to federal health research, U.S. intellectual property protections and U.S. political campaigns. He added that the federal government should now be able to demand lower Medicaid and Medicare drug prices from Pfizer, as a foreign entity, that it by law cannot require from U.S. drug companies.

“If Pfizer doesn’t want to pay U.S. taxes, then it shouldn’t get any benefits of U.S. corporate citizenship,” Reich wrote on his Facebook page.