Merck's CFO Defends The Tax-Management Strategies That Let It Pay About HALF The Straight US Corporate Tax Rates.

About ten days ago, in an earlier piece, I mentioned Merck's various complicated machinations -- which reduce the level of taxes it pays, world-wide -- which in turn, per force deeply cut the amount it pays to the US tax authorities, since US is a relatively high-tax rate jurisdiction. [But (as we've long explained) the US is also where most of the highest margin Keytruda^® sales occur -- in US hospital oncology wings.]

[I would also note that Pfizer, Amgen, Abbott, Baxter and Lilly do very much these same things -- it is an industry wide problem, from the perspective of paying one's fair share -- where most of the high margin sales are made.] To be fair though, and offer a little "equal time" -- we will run this link, from FinancialTimes, as it contains the CFO's defense of its global tax strategies:

. . .Litchfield said Merck’s decision to hold the intellectual property for Keytruda in the Netherlands is entirely appropriate, noting that a team of Dutch scientists invented the drug.

“It’s within the ethical boundaries to have intellectual property owned where that intellectual property was discovered. That’s what the situation is with regards to Keytruda. . . .”

Well. . . that is true -- but it doesn't really address the underlying concern: paying ones' fair share on the soil where the highest-priced sales are made. Where the drug is consumed, and reimbursed at huge mark-ups. Which is where we are headed, in supporting the right of the US government payors. . . to negotiate prices, for such medicines directly with big pharma. That is something that has been unlawful for almost 48 years, now. [Via very well-run pharma lobbying efforts, across multiple decades. But it was last close to getting repealed under President Obama in about 2009.] Time to change. . . all that -- to move forward, toward greater equity.

With all due respect, it is not just "where it was invented", Ms. Litchfield, that should decide how it is taxed, or priced.

नमस्ते