© Reuters. FILE PHOTO: Senator Ron Wyden speaks during a Senate Finance Committee hearing at the Dirksen Senate Office Building on Capitol Hill in Washington, DC, U.S., October 19, 2021. Mandel Ngan/ Pool via REUTERS / File Photo
By Michael Erman
(Reuters) – Drugmaker Merck & Co has avoided billions of dollars in U.S. taxes in recent years on best-selling cancer drug Keytruda by placing all profits from the treatment outside the United States. , according to an ongoing investigation by Democrats in the Senate. Financial Committee.
The committee’s chairman, Senator Ron Wyden of Oregon, sent a letter to Merck CEO Robert Davis on Wednesday criticizing the drugmaker for refusing to release all the information the committee had obtained. request. Wyden’s office provided a copy of the letter to Reuters.
Democrats on the committee are investigating how tax legislation passed by Republicans in 2017 benefited major US drug companies like Merck and AbbVie and whether those companies are taking advantage of foreign subsidiaries to evade taxes or not.
Wyden said in the letter that Merck was able to avoid US taxes on Keytruda – even when sold in the US – by holding patents in the Netherlands and manufacturing the drug in Ireland.
“Prior to today, we received two letters from the Senate Finance Committee requesting answers to questions surrounding our tax rates and in each case we cooperated and responded by information that we believe addressed their concerns appropriately,” Merck said in an email of the statement.
AbbVie did not immediately respond to a request for comment.
Keytruda cancer immunotherapy is one of the world’s best-selling drugs. Merck sold about $17.2 billion of that in 2021, with about $9.8 billion of that in the United States.
Wyden said in his letter, Merck’s effective tax rate last year was 11%, just over half of the current US corporate tax rate of 21%.
Wyden said the $22.4 billion in sales it reported in the U.S. accounted for 46 percent of Merck’s revenue in 2021. However, the company reported just $1.85 billion in U.S. pre-tax earnings. for the year – less than 15% of the company’s total pre-tax earnings. earnings = earnings.
Earlier this month, an interim report from the commission said the transfer of profits abroad by AbbVie Inc (NYSE:) results in “astonishingly low effective taxes.”
In 2018, Reuters showed how AbbVie reports its earnings in lower tax jurisdictions, which is likely due in part to the fact that the company used the majority of patents for the drug. best seller, rheumatoid arthritis treatment Humira, in tax haven Bermuda.
