Life sciences giants do not get off easy in the Offshore Shell Games 2014 report released June 5 by the US Public Interest Research Group Education Fund (PIRG) and Citizens for Tax Justice. Pfizer operates 128 subsidiaries in tax havens and officially holds $69 billion in profits offshore for tax purposes, the third highest among the Fortune 500, claims the report. Pfizer recently unsuccessfully attempted to acquire UK-based AstraZeneca with the intent of reincorporating as a foreign company, in an increasingly common practice known as tax inversion. Successful inversions have come via Endo Pharmaceuticals’ purchase of Paladin Labs and re-registration in Ireland, and with this week’s purchase of Covidien Plc by Medtronic, which likewise aims to domicile the newly combined firm in Ireland.
According to charts in the PIRG report, life sciences companies with the most cash parked offshore include Pfizer (fourth overall, with $69 billion), Merck (fifth, with $57.1 billion), and Johnson & Johnson (seventh, with $50.9 billion). A little further down the list of the top 30 companies by cash offshore come Amgen (19th, $25.5 billion), Abbott (21st, $24 billion), Bristol-Myers Squibb (also with $24 billion), Eli Lilly ($23.7 billion) and Medtronic, with nearly $20.5 billion and 37 offshore subsidiaries ... before the purchase of Covidien.