Following letters to AbbVie and Bristol Myers Squibb, Wyden requests information from Merck, which reports just 14 percent of pretax income in the United States despite U.S. market being home to 46 percent of global sales
Washington, D.C. – Senate Finance Committee Chair Ron Wyden, D-Ore., today continued his investigation into Big Pharma’s tax practices, and how loopholes in the tax code have allowed large multinational corporations headquartered in the U.S. to further abuse tax havens and avoid paying U.S. taxes on prescription drug sales. While U.S. sales account for 46 percent of Merck’s global sales, Merck reported just 14 percent of pretax income in the United States.
In a letter to Merck, Wyden wrote, “As you are aware, in addition to being Merck’s legal domicile and the primary location for Merck’s research and development activities, the United States is the market for nearly half of Merck’s total global sales. Although the United States accounted for $22.4 billion of Merck’s sales in 2021, Merck reported just $1.85 billion in pre-tax income in the United States. In contrast, in the same year Merck reported international pre-tax income of more than $12 billion on approximately $27 billion in sales. This substantial discrepancy between Merck’s domestic and international pre-tax income appears to be the result of Merck’s use of subsidiaries in several well-known low-or-zero tax jurisdictions, which yielded a ‘favorable impact on [Merck’s] effective tax rate compared with the U.S. statutory rate of 21%.’”
Full text of the letter follows:
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